Mexico City (AFP) – The European Union and Mexico will on Friday sign a deal reducing tariffs on each other’s goods as both seek to lessen their dependence on trade with the United States. The expansion of an accord dating to 2000 comes as Mexico fights hard to preserve a three-way free trade agreement with the United States and Canada, which is crucial to all three economies. The EU is Mexico’s third-largest trading partner, lagging far behind the United States and China.
Mexican President Claudia Sheinbaum has stressed the importance of “opening other horizons” at a time when both Mexico and the European Union are grappling with US President Donald Trump’s tariff offensive. The updated agreement to be signed by Sheinbaum and European Commission President Ursula von der Leyen during the eighth EU-Mexico Summit removes most remaining barriers to trade and investment. It facilitates trade in auto parts, a sector particularly affected by Trump’s tariffs.
“Mexico wants to reduce its dependence on its northern neighbor, but also on Asian, or rather, Chinese, supply chains, and in Europe we are pursuing the same objectives,” an EU official told AFP on condition of anonymity. On a visit Thursday to Mexico City, the EU’s foreign policy chief Kaja Kallas said the deal would create new opportunities for “both economies to compete globally” and build on the momentum of the past decade, which has seen a 75-percent leap in EU-Mexican trade.
Earlier this week, the European Union moved to end a trade standoff with Trump by agreeing to implement a deal signed last year with the United States, which sets tariffs on most European goods at 15 percent. Average US tariffs on Mexican goods are a quarter of that—with many avoiding levies altogether under the USMCA (United States, Mexico, Canada) agreement.
The lower tariffs enjoyed by Mexico will benefit the European Union, according to Sergio Contreras, president of the Mexican Business Council for Foreign Trade. Mexico will be “the point of convergence, the platform for the European Union and North America to come together,” he said.
© 2024 AFP
