On April 21, 2018, the Ministries of Foreign Affairs and Economy announced the successful conclusion of negotiations for a new global agreement with the European Union that includes political, economic and cooperation aspects to strengthen the political dialogue, boost trade and investment and increase technical and scientific cooperation for the benefit of both societies. The remaining part of the announcement (translation) says:
Again, as in 1997, when the Economic Partnership, Political Coordination and Cooperation Agreement (Global Agreement, in force since 2000) was concluded, Mexico and the European Union have written a new page in their history by negotiating the most advanced agreement of its type. In addition to including a strong section that adds new areas in which to promote trade and investment, thus strengthening our commercial and economic ties, it also includes political and cooperation aspects that will highlight both Mexico and the European Union as global actors for the benefit of their societies.
Mexico and the European Union share values such as democracy, human rights, and respect for the rule of law, free trade and multilateralism.
The new treaty’s trade pillar increases the benefits of trade between Mexico and the European Union, particularly in the agrifood sector. Tariffs will be eliminated on Mexican products such as orange juice, tuna, honey, agave syrup, ovoalbumin and fruits and vegetables, among others. Sensitive products, such as apples, peaches and dairy products were also protected. This will benefit consumers while diversifying our exports.
In addition, our trade now covers more services by including telecommunications and the temporary entry of people and services involved with the digital economy. Furthermore, protections for investments are stronger, and include a modern dispute resolution mechanism.
Since 1999, one year before entry into force of the Mexico-European Union Free Trade Agreement, trade has quadrupled. The European block has contributed 38% of FDI in Mexico, or USD 184.636 billion, between 1999 and 2017.
Conclusion of this new agreement between Mexico and the European Union sends a strong message to the world about the importance of keeping markets open, working together multilaterally to face our global challenges and cooperating to benefit humanity’s causes.
On 21 April 2018, the European Commission announced that The European Union and Mexico reached a new agreement on trade, part of a broader, modernised EU-Mexico Global Agreement. Practically all trade in goods between the EU and Mexico will now be duty-free, including in the agricultural sector. Excerpts from the announcement follow:
Simpler customs procedures will further benefit the EU’s industry, including in sectors like pharmaceuticals, machinery and transport equipment. The agreement also lays down progressive rules on sustainable development. Among other things, the EU and Mexico have committed to effectively implementing their obligations under the Paris Agreement on climate change. It will also be the first EU trade agreement to tackle corruption in the private and public sectors.
*** [Quotes omitted.]
Today’s agreement – once finalised and approved – will benefit both companies and consumers across Europe and advance the EU’s values-based trade policy agenda. The agreement in principle struck today brings the EU’s trade relationship with Mexico into the modern era, tearing down most of the remaining barriers to trade.
Since the previous EU-Mexico trade agreement came into force in 2000, trade between the EU and Mexico has risen at a rate of around 8% per year, resulting in an overall increase of 148% in trade in goods over the period. Despite these positive results, there was still a wide margin for improving the trade relationship that the new agreement is addressing, by making virtually all trade in goods duty-free.
The main elements of the agreement
1) Agricultural exports from the EU are set to benefit the most, such as poultry, cheese, chocolate, pasta, and pork.
The agreement will, in particular:
- provide preferential access for many cheeses such as Gorgonzola and Roquefort, which currently are up to 20%, and gain significant new access for many others within annual quotas;
- secure a considerable volume for milk powder exports in one of the largest markets, starting with 30,000 tonnes from entry into force, rising to 50,000 tonnes after 5 years;
- allow the EU to substantially increase its pork exports to Mexico, with duty-free trade for virtually all pork products;
- eliminate tariffs for products like chocolate (currently up to 30%) and pasta (currently up to 20%);
- ensure the protection from imitation for 340 distinctive European foods and drink products in Mexico, so-called geographical indications, such as Comté cheese from France, Queijo São Jorge cheese from Portugal, Szegedi szalámi from Hungary, and Magiun de prune Topoloveni plums from Romania. This means that EU producers of traditional delicacies are not struggling against copies, and when consumers buy these products they can do so knowing they are buying the real thing.
When it comes to customs procedures, the new agreement will bring in new rules to simplify and speed up paperwork and physical checks at Mexican customs.
2) The agreement includes a comprehensive trade and sustainable development chapter, which sets the highest standards of labour, safety, environmental and consumer protection; introduces a new dialogue with civil society in all areas of the agreement, strengthens the EU and Mexico’s actions on sustainable development and climate change, notably the obligations both sides undertook under the Paris Agreement on climate change; and maintains and fully safeguards Member States’ right to organise public services the way they choose.
The agreement also includes an explicit reference to the precautionary principle that, already enshrined in the EU treaties, allows the EU to keep products out of its market as long as there is no scientific certainty that they are safe.
It will also be the very first EU trade agreement to include provisions to fight corruption, with measures to act against bribery and money laundering. The broader Global Agreement, of which the trade agreement is an integral part, also covers the protection of human rights, as well as chapters on political and development cooperation.
3) The agreement is a big step forward in giving companies mutual access to government contracts in both the EU and Mexico public procurement markets.EU and Mexican companies will be placed on an equal footing, irrespective of whether they present a bid in Mexico or in the EU. Mexico has also committed itself to enter into negotiations with the Mexican States to allow EU firms to tender for contracts at State level by the time the agreement is signed.
4) This opening goes hand in hand with setting a level playing-field: we agreed a high level of protection of intellectual property rights. This protects EU research and development and guarantees fair pay for EU artists, as well as the 340 traditional EU delicacies mentioned above.
5) The new agreement opens up trade in services, such as financial services, transport, e-commerce, and telecommunications. The agreement will also help develop an favourable environment for a knowledge-based economy, with a new chapter on digital trade. This will remove unnecessary barriers to online trade, like charging customs duties when downloading an app, and will put in place clear rules to protect consumers online.
6) On investment protection, the agreement improves investment conditions and includes the EU’s new Investment Court System, ensuring transparency and the right of governments to regulate in the public interest, and will also ensure that Mexico and the EU work towards the setting up of a Multilateral Investment Court.
Overall, this agreement will strengthen Europe’s leadership in shaping globalisation by putting in place trade rules that are in line with the EU’s core values and safeguard the EU’s interests and sensitivities. In doing so, it contributes to addressing challenges identified in the reflection paper on Harnessing Globalisation presented by the Commission as part of the White Paper process.
Although the agreement in principle includes the most important elements of the agreement, in some chapters, technical details still need to be tied up. Negotiators from both sides will continue their work to resolve the remaining technical issues and finalise the full legal text by the end of the year. Then, the Commission will proceed with the legal verification and translation of the agreement into all official EU languages, and will subsequently submit it for approval by the European Parliament and Council of the European Union.