EU and Mexico seal updated trade deal
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Euractiv | 17 January 2025
EU and Mexico seal updated trade deal
by Sofia Sanchez Manzanaro
The EU has concluded negotiations with Mexico on an updated trade agreement, the European Commission announced in a press release on Friday.
Mexico is the EU’s second largest trading partner in Latin America after Brazil.
Negotiations for a new modernised agreement started in May 2016 and an agreement in principle on trade aspects was reached in 2018, but was never ratified. Currently, trade and cooperation relations between the EU and the Latin American country are governed by a 2000 Global Agreement.
"The EU and Mexico are already trusted partners," said Commission President Ursula von der Leyen. “Now, we want to deepen our cooperation even further, strongly benefiting our people and economies,” she added, noting that farmers and agri-food companies will also gain new export markets.
The announcement comes just over a month after the EU signed a similar deal with the Mercosur bloc (Argentina, Brazil, Paraguay and Uruguay), which has been strongly contested by the farming sector.
The Commission said the trade elements of the agreement will boost “an already-thriving” relationship. EU-Mexico trade in goods reached €82 billion in 2023, while two-way trade in services reached €22 billion in 2022.
The agreement will also allow the removal of high tariffs on EU exports of food and agricultural products, including cheese, poultry, pork, pasta, apples, jams, chocolate and wine, as well as protecting traditional European products.
The deal includes a chapter on trade and sustainability that sets out binding commitments on labour rights, environmental protection, climate change and responsible business products, the Commission said. It also includes a dispute settlement mechanism to ensure the enforcement of these provisions.
Among the most contentious issues in the negotiations were investment protection and the recognition of traditional EU food and drink products – geographical indications – in Mexico.
Agriculture secures win
A senior Commission official said that the finalisation of the deal had been stalled by Mexico’s plans to change its constitution to favour its state-owned electricity company, which meant that key elements of the agreement had to be renegotiated.
In return for the EU’s loss of access to the Mexican electricity market, Brussels limited quotas on Mexican exports of certain "sensitive" agricultural products, the official added.
For beef, the originally negotiated quota was 10,000 tonnes at a 7.5% tariff, while the 2024 agreement halves this to 5,000 tonnes, the same as for beef offal (organs). The poultry quota has been reduced from 10,000 tonnes to 6,667 tonnes. Exports of duty-free ethanol for "other uses" – not spirits – have been cut from 18,000 tonnes to 5,500 tonnes.
Mexico will also eliminate its high tariffs on several EU agri-food exports – such as up to 45% on cheese, 50% on milk and 45% on pork loin. The number of traditional EU products protected in the latest version of the deal has almost doubled to 232 spirits and 336 wines, beers and food products.