While the current USA administration focuses their efforts on protectionist trade policies and a hostile foreign relations stance, the European Union continues its fundamental movement for openness and international collaboration. In what may be perceived as a sarcastic inference to the US-Mexico border, EU Trade Commissioner Cecilia Malmström (from Sweden) stated that the European Union is all about “building bridges, not walls” and underlined the fact that the agreement “also sends a strong message to other partners that it is possible to modernize existing trade relations when both partners share a clear belief in the merits of openness, and of free and fair trade.”
As part of a wider Global Agreement, the new trade deal not only ensures a smoother exchange of goods and services between the partners but also marks a milestone in underpinning the economic collaboration with the promotion of a sound investment climate – through corporate and governmental responsibility. The wider agreement sets out goals and requirements for sustainable development in areas such as anti-corruption and good governance in the public sector, labour and general human rights, money laundering, public procurement practices, intellectual property rights, the introduction of Investment Courts and a continued commitment to mitigating climate change in line with the Paris Accords.
Most of us are of course keen to learn which exact measures have been negotiated to benefit us as consumers or producers. Most briefly, the changes can be summarized as near-abolishment of tariffs on EU goods, “cleaning-up” of Mexican import regulations and customs practices, and non-discrimination policies regarding economic inclusion of foreign enterprises.
See below for some further brief details and a colourful infographic that helps to illustrate key changes.
“Mexico and the EU worked together and reached a mutually beneficial outcome. We did it as partners who are willing to discuss, to defend their interests while at the same time being willing to compromise to meet each other's expectations.” European Commission President Jean-Claude Junker
What will the agreement mean for trade in goods?
The EU wants Mexico to:
- abolish its remaining import tariffs on European goods
- remove obstacles to EU exports, such as those resulting from unclear rules and regulations.
Making it easier to export to Mexico is expected to benefit all EU firms, but especially those making and selling:
- agri-food products
- mineral fuels and related products
- transport equipment
What will the agreement mean for trade in services?
The agreement will make it easier for EU firms to sell their services in Mexico.
Firms in the following areas, in particular, are expected to benefit:
- business services
- financial services
As a general rule, the agreement will prevent the EU or Mexico from discriminating against each other's service providers.
The agreement will:
- ensure the EU or Mexico can regulate their services markets in a non-discriminatory manner
- not affect public services like healthcare or education
Sources: European Commission, Swedish Television SvT1 (interview 23-4-2018)