From agave syrup to raw materials: EU, Mexico agree trade expansion / Photo: © AFP/File
From agave syrup to raw materials: EU, Mexico agree trade expansion
The EU and Mexico agreed to expand their trade ties Friday against the backdrop of a more protectionist United States under President Donald Trump.
Trade between Mexico and the EU is worth some 100 billion euros ($116 billion), but Brussels says the updated trade agreement will boost this further.
The EU is Mexico's third largest trading partner, while Mexico is the bloc's second biggest trading partner in Latin America after Brazil.
Brussels said the update to the pact would make it easier for the "likeminded partners" to export and invest in each other's markets.
- Food and drink -
The EU said European farmers would benefit since Mexico is a net food importer, and there are limits on how much Mexico can export sensitive goods.
For example, the EU will limit imports of Mexican beef, with a quota of 5,000 tonnes of the meat allowed in with a preferential tariff rate of 7.5 percent.
Brussels wants to avoid upsetting farmers after a fierce fight over the trade agreement between the EU and the South American Mercosur bloc.
Mexico also agreed to recognise hundreds of food and drink products from specific regions of the EU, such as Parma ham and Roquefort cheese.
And it will lower tariffs on more products, and give duty-free access to pasta, chocolate, potatoes, canned peaches, eggs and certain poultry products.
In exchange, the EU will give access to Mexico to the bloc's market for products like coffee, fruits, chocolates and agave syrup.
- Critical raw materials -
For Brussels, the update means European companies will have greater access to the Mexican market and can bid for more public contracts.
The agreement also means EU firms will find it easier to export machinery, pharmaceuticals and transport equipment, Brussels said.
The EU hopes the deal will mean better supply of critical raw materials from Mexico, already a top supplier to the bloc. The deal bans EU importers from paying a different price to Mexican buyers for critical raw materials.
The EU has been scrambling to diversify its supply of critical raw materials, as it seeks to cut its dependence on the elements from China.
And the agreement will facilitate European firms to ship auto parts to Mexico through the recognition of European certifications and international standards.
But Brussels insisted it would not allow Chinese manufacturers to use Mexico to export vehicles produced in China to Europe.
(L.Svenson--DTZ)
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