Latin America moves closer as EU Council endorses agreement with Mexico

Brussels – After Mercosur, Mexico. At a time when the major powers no longer represent, for various reasons, reliable trading partners, the European Union continues its search for alternative allies. Today (11 May), the Council of the EU announced the adoption of two decisions authorising the signing of two new agreements with Mexico: the Strategic Political, Economic, and Cooperation Partnership Agreement (Modernised Global Agreement, MGA) and the EU-Mexico Interim Trade Agreement (Interim Trade Agreement, iTA). A result achieved ten years after negotiations began in 2016 and just a few weeks after the (hard-fought) entry into force of the agreement signed by Brussels with the Mercosur countries.

According to the official statement from the European Commission, the two agreements aim to “strengthen political dialogue” and “boost sustainable trade investment” with the EU’s second-largest economic partner in Latin America. Over 45,000 EU companies export to Mexico and, since 2013, bilateral trade in goods has increased by 88 per cent (reaching €82 billion in 2024), while trade in services has grown by 158 per cent (€26 billion in 2023).

Of the two agreements, the MGA is the more general and far-reaching. In addition to the purely commercial aspect, the agreement, which represents an evolution of the 2000 Global Agreement, aims to deepen cooperation with the Central American country in other strategic areas, including sustainable development, climate change, digital transformation, security, justice, and human rights. On these last two issues in particular, the agreement also provides for the launch of regular dialogues between Brussels and Mexico City, reaffirming the commitment to the “shared values such as democracy, the rule of law, multilateralism and the protection of fundamental rights.”

The adoption of the iTA, on the other hand, stems from the need to avoid excessive delays in the entry into force of the most urgent provisions contained in the comprehensive agreement, namely the trade provisions. Precisely because of the numerous subject areas covered, the MGA can only become officially operational after a rather lengthy process: in addition to the green light from the EU institutions, formal ratification by all EU Member States and the Mexican government itself will also be required. The iTA, on the other hand, concerns only the Union’s exclusive competence in trade matters, so the procedure involved is much simpler. Following the official signing by the Council, expected at the Eighth EU-Mexico Summit on 22 May, only the European Parliament’s approval and the European Commission’s final conclusion will be required. This way, therefore, the trade provisions contained in the MGA will apply – on a provisional basis – even before the comprehensive agreement enters into force.

The structure of the iTA closely mirrors that of a traditional free trade agreement between the EU and third countries. The fundamental objective, therefore, is to “significantly improve access to each other’s markets” by further liberalising trade flows and investment between the EU and Mexico and eliminating most of the customs duties still in place on certain European exports. The main beneficiaries of this agreement are expected to be companies operating in the agri-food, engineering, pharmaceutical, and automotive sectors. Regarding food products from the Old Continent, the protection of hundreds of European geographical indications will also be guaranteed, safeguarding the presence of distinctive regional products on the Mexican market.

Among the other objectives set out by the iTA, again with a view to greater liberalisation and cooperation between Brussels and Mexico City, are the simplification of procedures for mutual access to public procurement, the provision of more ambitious commitments on workers’ rights and sustainable trade and greater cooperation on critical raw materials.

The Cypriot Presidency of the Council of the EU welcomed the two decisions announced today. The Minister for Energy, Trade and Industry in Nicosia, Michael Damianos, emphasised that the agreements “will create new opportunities for European businesses and economic operators, helping them access a dynamic market whilst safeguarding our high standards and protecting the Union’s key interests.”