FTA Upgrade: EU-Mexican Trade Talks Fail to Reach Political Agreement

Written by | Friday, December 22nd, 2017

The EU and Mexico failed to agree on a revamp of their mutual trade deal despite three-day talks in Brussels. Both sides were not able to get over the contentious outstanding issues such investment protection and geographical indications for some agricultural products. The modernization of the deal started last year and has advanced significantly with many of the chapters progressing nicely. Energy is one of those areas and Mexican economy minister Ildefonso Guajardo, the head of negotiations on the Mexican side, confirmed that “energy is not one of the remaining issues”.

European leaders had been generally more positive about the prospects for a deal with Mexico than with the South American bloc Mercosur but the talks got stuck in December. Despite the lack of success, European Commission hopes to announce a “political deal” with Mexico by the end of this year. The issues that required some additional work included market access in agriculture, geographical indications on cheeses and the EU’s investment court system. EU trade chief Cecilia Malmström commented on the current state of negotiations that “we are confident we can solve all the remaining political issues. But we need a little bit more time.”

Mexico was the first Latin American country to sign an Economic Partnership, Political Coordination and Cooperation Agreement with the EU. In 2016, the bloc was Mexico’s second biggest export market after the US and the EU’s key imports from Mexico are fuels and mining products as well as transport machinery and telecommunication equipment. The EU was also an important source for Mexican imports and in 2016, the third biggest after the US and China.

Trade relations are currently governed by the 2000 Free Trade Agreement, which has helped liberalize trade in all industrial goods and improved market access conditions for Mexican and European exporters. The deal has also helped Mexico boost its exports and competitiveness thanks to the diversification in the trade of goods but also in the liberalization of trade in services.

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