Mexico and the European Union have announced an updated Global Trade Agreement aimed at enhancing trade and investment between the two entities. This announcement comes strategically before the inauguration of U.S. President-elect Donald Trump, who has indicated potential tariffs on Mexico among other trade partners. The revised agreement is set to lower tariffs on European agri-food imports into Mexico and eliminate various barriers, enabling easier investment by European entities within Mexico. Additionally, it is expected to increase Mexican exports of essential raw materials such as fluorspar, antimony, copper, zinc, and lead, crucial for the electronics industry.
The deal, rejuvenating a partnership established 25 years ago, also aims at fostering strategic cooperation on significant geopolitical issues. "We have entered a new era in our strategic partnership with Mexico today. Our upgraded agreement shows the E.U. and Mexico united for freer trade and an open global economy," stated Kaja Kallas, Vice President of the European Commission. Despite the potential challenges posed by U.S. trade policies under the Trump administration, this updated agreement with the E.U. could serve as a buffer for Mexico against possible economic impacts from tariffs and trade disruptions with the United States.
Trade figures highlight the disparity in trade volumes, with U.S.-Mexico trade exceeding $800 billion in 2023, in stark contrast to the $84 billion trade volume between Mexico and the European Union. Nonetheless, experts like Gabriela Siller, Director of Economic Analysis at Banco Base, view the updated E.U. agreement as a pivotal move for Mexico to diversify its export markets and reduce dependency on the U.S. market. On a related note, Mexico's Economy Secretary Marcelo Ebrard has been engaging with key players in the U.S. automotive sector, signaling efforts to bolster bilateral trade relations amidst evolving global trade dynamics.
Source: AP News