Two years after Brexit, the governments of Mexico and the UK seek to strengthen their commercial relationship through the negotiation of a new Free Trade Agreement (FTA) that will assure the exchange of goods and services free of tariffs. Official negotiation rounds will begin in June. The countries expect to have the new bilateral deal ready by the end of 2022.
Mexico’s Minister of Economy Tatiana Clouthier, traveled to London past Thursday, May 19, to meet with the UK’s Secretary of State for International Trade, Anne-Marie Trevelyan and start the negotiation process. The first round of negotiations will begin on July 11 in Mexico City.
The new trade agreement seeks to include modern issues including digital trade and services, environmental care, innovation, the circular economy, the economic integration of small and medium enterprises (SMEs) and the economic empowerment of women, all issues identified as priorities for both Mexico and the UK.
Free trade between Mexico and the UK had already been established through the Free Trade Agreement between Mexico and the European Union (the EU-Mexico FTA), which came into force in 2000. The EU-Mexico FTA began its renegotiation process in 2016, just as the carried out its Brexit vote. The renegotiation of the EU-Mexico FTA finished in April 2020, just months after Brexit was turned into a political reality.
In order not to interrupt trade between both countries, Mexico and the UK signed a Trade Continuity Agreement in December 2020, while a one-year period was granted to begin negotiations on the new trade deal.
"With this launch, we are fulfilling our commitment under the Mexico-UK Trade Continuity Agreement to begin negotiations within one year of the agreement’s ratification,” said Clouthier. “Mexico and the UK are united by friendship and an important strategic economic relationship that supports businesses and jobs in both countries," she added.
The UK is Mexico's 16th-largest trading partner as well as the eighth largest source of foreign investment, with more than 2,000 British companies present in the country. In 2021, trade between both nations increased to US$5.1 billion. Meanwhile, Mexico is a major market for UK exporters. Its expanding population means demand for imports is set to grow by 35 percent by 2035. Mexico also has a strategic location in the world, serving as a gateway to the Americas as well as to the dynamic Trans-Pacific region.
The trade agreement with Mexico is part of the UK’s strategy to expand its trade relations with different countries after Brexit. Among its target countries are the US, Canada and Colombia. The British strategy also includes joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Mexico is a member.