New EU-Mexico trade agreement to benefit agricultural exports

Mexico's Economy Minister Guajardo speaks during an entrepreneurship event in Mexico City

The EU said yesterday that it had reached an agreement that in principle would result in almost all trade between EU countries and Mexico being duty-free, including the agriculture sector.

Mexico and the European Union have reached a trade deal that virtually eliminates tariffs.

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The deal comes as Trump's America-first policies have thrown U.S. -Mexico trade into uncertainty and stalled efforts for a U.S. -EU trade deal.

In terms of tariff-free trade, agricultural exports from the European Union are likely to receive the most benefit.

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In turn, Mexican exporters will benefit from the removal of tariffs on products such as orange juice, tuna, honey and agave syrup. Mexico City and Brussels have also committed to implementing their obligations under the Paris Agreement. It updates and expands a two-decade-old agreement to include financial services and online commerce, among other sectors. Between 2000 and 2015 the trade turnover between Mexico and the European Union grew more than two times.

The updated agreement replaces the pact that came into force in 2000 and will take effect once it has been approved by lawmakers both in Mexico and the EU.

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The parties in favor of "open and fair trade, which is based on the rules", said European Commissioner for trade Cecilia malmström and Minister of economy of Mexico Ildefonso, Guajardo. "Our negotiators will now continue their work to resolve the remaining technical issues and finalize the full legal text so that our citizens and enterprises can start reaping its benefits as soon as possible". It is being interpreted as, in part, an attempt to rile U.S. President Donald Trump, who has expressed reservations about unrestricted trade with Mexico and suggested he will impose tariffs on Mexican imports if corporations outsource American jobs to bring labour costs down.

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