New EU-Mexico Trade Agreement Expands on Past Deal

The European Union and Mexico will further reduce tariffs on each other's goods as part of a new trade agreement, the EU said in a news release. "After several months of intense negotiations, this afternoon we reached an agreement in principle on trade and investment between the European Union and Mexico, as part of the modernisation of our bilateral legal framework," EU and Mexican officials said an April 21 joint statement. "Simpler customs procedures will further benefit the EU's industry, including in sectors like pharmaceuticals, machinery and transport equipment," the EU said.

Mexico said in its news release that the agreement will especially benefit Mexico's agrifood sector. "Tariffs will be eliminated on Mexican products such as orange juice, tuna, honey, agave syrup, ovoalbumin and fruits and vegetables, among others," the country said. "Sensitive products, such as apples, peaches and dairy products were also protected. This will benefit consumers while diversifying our exports." The deal will also "bring in new rules to simplify and speed up paperwork and physical checks at Mexican customs," the EU said. The EU also released a more detailed summary of the agreement.

Once the deal takes effect, 98 percent of goods traded will face no duties right away, the EU said. "For the remaining items, customs duties will be eliminated over time or for a limited amount defined as a quota," including dairy and meat exports from both the EU and Mexico. The EU highlighted the end of Mexican tariffs on "pasta (currently subject to tariffs of up to 20%), chocolate and confectionary (with tariffs exceeding 20%), blue cheeses (up to 20%), apples and canned peaches (up to 20%), virtually all pork products (up to 45%) and economically relevant poultry products (up to 100%)." Some technical details are still needed and negotiators hope to have a final text by the end of the year.

This agreement is a continuation of a previous agreement between the two that "did not contain many of the provisions on trade in goods that have since become standard in trade agreements," according to an EU fact sheet on the deal. "Trade in medical devices will be easier thanks to simplified trade in remanufactured machinery," it said. The agreement also will add some intellectual property protections. "For pharmaceutical and plant protection patents, the agreement allows for compensation for unreasonable delays in the marketing authorisation process," the EU said.

The trade facilitation section of the deal will update customs procedures, "setting common principles and providing for better cooperation and exchange of information between EU and Mexican customs authorities," the EU said. There are also "substantial provisions on transparency to ensure that traders and the public have access to information on customs legislation, decisions or administrative policies." Both sides also will issue binding rulings, the EU said. "Furthermore, EU and Mexico agreed on enhanced provisions regarding other areas such as penalties, transit, single window, customs brokers and pre-shipment inspection."