On Friday 17 January, the European Commission announced the conclusion of negotiations on the modernisation of the EU-Mexico Global Agreement, which dates back to 2000. The discussions, which began in 2016, came to an end after Mexico completed its constitutional reform, which has repercussions on access for foreign companies and therefore on the trade part of the agreement with the EU.
The President of the European Commission, Ursula von der Leyen, welcomed this announcement long awaited by many European players. Unlike the agreement with Mercosur, the one with Mexico is receiving generally good press. “EU exporters will gain new commercial opportunities, including our farmers and agri-food companies”, highlighted Ms von der Leyen.
Trade. In 2023, trade in goods between the two regions reached €82 billion, and trade in services reached €22 billion in 2022. Once ratified and applied, the agreement will eliminate most customs duties on trade in agri-food products between the EU and Mexico on entry into force, or within 10 years. Three hundred and thirty six additional geographical indications will also be protected in Mexico. For other products, prices are also reduced, albeit on a smaller scale.
The agreement will guarantee non-discriminatory access to critical Mexican raw materials, but the chapter on energy has been removed from the text because of new rules in Mexico that give preference to local companies. Although it had previously negotiated preferential access, the EU had to abandon this after the Mexican constitutional reform. European companies will therefore ultimately have the same access as all other global firms to produce electricity in Mexico.
To counterbalance this setback, the EU demanded and obtained a review of the volumes of certain tariff quotas on imports from Mexico concerning sensitive products: the volumes have been reduced for beef, poultry and ethanol compared to what the Commission had already negotiated a few years ago.
“The EU’s Global Agreement with Mexico will tear down trade barriers and drive investment, supporting job creation and prosperity on both sides”, welcomed Commissioner for Trade, Maroš Šefčovič.
Sustainable development. The modernised EU-Mexico agreement follows the logic of the agreement with Chile: it includes a binding chapter on trade and sustainable development (TSD). However, the latter is not exempt from the possibility of withdrawing tariff preferences in the event of non-compliance by either party. “As soon as it comes into force, we will begin a review with a view to discussing the possibility of introducing an even more binding system”, explained a European official.
The TSD chapters include compliance with the Paris Agreement, the fundamental conventions of the International Labour Organization (ILO) and generally all international conventions signed by both parties.
Cooperation. In addition to trade, the agreement commits the two parties to cooperating on human rights, multilateralism and peace and security. The Commission also hopes to work with Mexico to reduce the risks associated with supply chains, particularly where critical raw materials are concerned.
Beyond the strict content of the treaty, many welcome its symbolic value, at a time when the EU is seeking to diversify its partners and strengthen its influence on the international stage.
“Thanks to this new agreement, the EU is strengthening its role in the world as a guarantor of free trade at a time of rising protectionism”, said Borja Giménez Larraz (EPP, Spanish), permanent rapporteur for Mexico at the European Parliament.
Continuation of the procedure. The texts of the agreement will be published in the next few days, according to the European Commission. They will then undergo a legal review, followed by translation. Before sending the agreement to the Council for ratification, the Commission will have to decide on its legal architecture, i.e. whether to separate the trade part from the rest of the agreement, in order to have the trade part ratified more quickly.
According to a European source, the stage of legal review of the texts should be quicker than for the EU-Mercosur agreement, the negotiations for which were also concluded a few weeks ago (see EUROPE 13540/1). (Original version in French by Léa Marchal)