Trade agreement between the EU and Mexico reduces tariffs

The European Union and Mexico are intensifying their economic cooperation. The Federal Government has cleared the way for the next step by agreeing to the signing and provisional application of the EU's modernised Global Agreement with Mexico - both on behalf of the EU and for Germany itself. It is intended to replace the previous agreement.

Among other things, the agreement reduces tariffs and removes trade barriers. It also contributes to more diverse European supply chains and therefore less dependence on individual countries. In this way, the Federal Government is implementing its goal from the coalition agreement: to support the agreement with Mexico and accelerate the ratification of the agreement.

New opportunity for companies

With this decision, the Federal Government is committing itself to a milestone in European foreign trade and partnership policy. The modernised Global Agreement will deepen the multifaceted relations between the EU and Mexico as a major Latin American country. Negotiations on this began as early as 2016.

A central component is the extensive trading section. It will initially come into force through an upstream interim trade agreement. For European companies - especially export-orientated SMEs - the agreement means improved access to a market of over 130 million people. Access to public contracts will also be made easier, and targeted support measures for small and medium-sized enterprises will promote the economy.

Protecting agriculture, promoting sustainability

Agricultural products, such as cane sugar, remain largely protected by agreed quotas. Quotas for beef, poultry and ethanol agreed in 2018 were even lowered as part of the more recent negotiations. The sustainability chapter in the trade section includes agreements on the implementation of key international labour, environmental and climate conventions.

New framework replaces old agreements

With its entry into force, the modernised Global Agreement replaces a number of existing agreements and treaties. These include the predecessor agreement of 1 October 2000, the 1998 Treaty on the Promotion and Reciprocal Protection of Investments between Germany and Mexico, and 13 other bilateral investment protection treaties between other EU Member States and Mexico.

The modernised Global Agreement is a mixed agreement and must therefore be ratified by the EU and all Member States in accordance with their respective constitutional requirements once it has been signed.