EU and Mexico agree free trade deal in principle

By Joseph James Whitworth contact

- Last updated on GMT

Picture: iStock
Picture: iStock
The European Union has agreed a modernised free trade agreement in principle with Mexico.

Most goods will be traded duty-free in the agricultural sector.

Agricultural exports from the EU set to benefit are poultry, cheese, chocolate, pasta and pork.

Since the previous EU-Mexico agreement came into force in 2000, trade between the two parties has risen around 8% per year.

FoodDrinkEurope said key exports include spirits, wine, dairy products, olive oil, chocolate, biscuits and confectionery and imports are beer, fruits and vegetables, spirits, fish products and juices.

Mexico is the EU food and drink industry’s second largest export market in Latin America. EU-Mexico bilateral trade in the sector exceeded €1.9bn in 2017 (Exports: €1.18bn; imports: €773m), added the association.

Export opportunities and jobs

Commissioner for agriculture, Phil Hogan, said ​the agreement will deliver benefits for citizens at home through cooperation with partners abroad.

”This deal is very positive for our agri-food sector, creating new export opportunities for our high-quality food and drink products, which in turn will create support more jobs and growth, particularly in rural areas."

The agreement will provide preferential access for cheeses such as Gorgonzola and Roquefort and gain new access for others within annual quotas as well as securing volume for milk powder exports, starting with 30,000 tonnes from entry into force, rising to 50,000 tonnes after five years.

It will also allow the EU to increase pork exports, with duty-free trade for most products and eliminate tariffs for chocolate (currently up to 30%) and pasta (up to 20%).

eu mexico trade
Figures on EU and Mexico trade. Source: EU Trade

Traditional delicacies not struggling against copies

More than 300 European food and drink products with 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 will be protected from imitation in Mexico.

Under the existing agreement, Mexico protects 80 spirits with geographical indications.

The full legal text is expected to be finalised by the end of 2018 before being submitted for approval by the European Parliament and Council of the European Union.

Jean-Claude Juncker,​ European Commission president, said trade can and should be a win-win ​process.

“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,” ​he said.

With this agreement, Mexico joins Canada, Japan and Singapore in the growing list of partners willing to work with the EU in defending open, fair and rules-based trade."

Commissioner for Trade Cecilia Malmström added negotiations started in May 2016.

“[The] agreement also sends a strong message to other partners that it is possible to modernise existing trade relations when both partners share a clear belief in the merits of openness, and of free and fair trade."

CELCAA and ALDE reaction

CELCAA, the European umbrella organisation representing trade in agri-food and commodities, called the modernised trade deal ‘promising’ based on available information.

It welcomed increased market access of EU agri-food products to Mexico; protection of Geographical Indications; transparent import approval procedures with clear timelines and Mexico recognizing the EU as a single entity.

Members include CEEV, CIBC, COCERAL, EUCOLAIT, EUWEP, FETRATAB, FRESHFEL, GAFTA, SACAR and UECBV and cover cereals, grains, oils and fats, sugar, fruit and vegetables, olive oil, animal feed, wine, meat products, dairy products, egg products, poultry and game, spices and cut flowers and plants.

Paul Rooke, president of CELCAA, said: “We look forward to see the details of the agreement so that we can analyse it further but information already available are positive in the sense of increased market access for EU products to Mexico and more rules-based mechanism in the field of sanitary and phytosanitary aspects – all elements that our membership have been calling for during these negotiations.”

Liberals and Democrats in the European Parliament also welcomed the agreement.

Dita Charanzová, ALDE shadow on EU trade relations with Mexico, said the two parties have sent a clear signal – ‘while others isolate, we cooperate’.

“This successful modernization demonstrates that the Union's trade strategy should not be limited to the quantity of trade agreements in place, but to also ensure better quality of these. The decision to update agreements in place with Mexico, followed by Chile, is positive, and should become the norm for all of our trade deals."

Copa and Cogeca welcomed the trade agreement saying it shows good balanced trade deals can be reached.

Secretary-General Pekka Pesonen said it can deliver for both sides provided import quotas are managed properly.

"We welcome in particular the increased access to the Mexican market for our quality cheeses, skimmed milk powder, pork, olive oil and wine under this agreement. It is vital to ensure small and medium sized enterprises (SMEs) gain market access, especially cooperatives. Red tape in Mexico must be minimized to lower the threshold for SMEs to enter the Mexican market."

But he regretted that increased access for Mexican beef to the EU market has been negotiated, adding: “An import quota of 10,000 tonnes of beef is 10,000 too much​."

FoodDrinkEurope said information available on additional market access for EU food and drinks to Mexico and new trade facilitating measures is positive.

But it is keen to learn more about the full details of the agreement and hopes it will match expectations of all European food and drink manufacturers.

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