MEXICO CITY — On Friday, Mexico and the European Union unveiled a newly updated trade agreement aimed at significantly enhancing trade and investment between them, occurring just days before the inauguration of U.S. President-elect Donald Trump, who has proposed imposing extensive tariffs on Mexico and other trade partners.
The new Global Trade Agreement between Mexico and the 27-nation European Union aims to lessen tariffs on agricultural and food imports from Europe and eliminate various obstacles that would facilitate investment from European companies into Mexico. Additionally, it seeks to expand Mexico’s exports of essential raw materials, including fluorspar (which is utilized in electronics), antimony, copper, zinc, and lead.
This modernized agreement reflects developments since its initial enactment 25 years ago and is designed to enhance “strategic cooperation on key geopolitical matters,” as stated by the European Union.
Kaja Kallas, vice president of the European Commission, remarked, “Today marks the beginning of a new chapter in our strategic partnership with Mexico. This upgraded agreement demonstrates the European Union and Mexico’s commitment to freer trade and an open global economy.”
The timing of this announcement is significant, given Trump’s anticipated return to the White House, where he has proposed imposing tariffs that could reach as high as 25% on all imports from Mexico, posing a risk of serious economic consequences for both nations.
While this strengthened agreement with the EU could help lessen some of the potential impacts from any disturbances in U.S.-Mexico trade, it’s worth noting that transactions between Mexico and the European Union still account for only a minor fraction of Mexico’s total trade volume with the United States. In 2023, trade between the U.S. and Mexico exceeded $800 billion, while the exchanges between Mexico and the European Union amounted to $84 billion, according to data from the EU.
Gabriela Siller, who heads the economic analysis division at the local financial institution Banco Base, praised the updated agreement with the EU, highlighting it as a progressive measure to lessen the considerable “hegemonic power” the U.S. has over Mexican exports due to their deep trade relationship.
“This is a highly beneficial development for Mexico, as it is necessary to diversify its export markets,” Siller noted, emphasizing that 80% of Mexico’s exports go to the U.S. “Such dependence gives the United States significant leverage to impose demands and tariffs.”
The Ministry of Economy in Mexico has yet to release any statements regarding the newly updated agreement. In a related note, Mexico’s Economy Secretary Marcelo Ebrard shared on the social media platform X that he was currently in Detroit, engaging with representatives from the automotive sector in a bid to strengthen cross-border relations.
