Facing Trump tariff threat, EU-Mexico upgrade trade ties

BRUSSELS (AFP) — The EU announced an agreement Friday with Mexico to strengthen their trade relations, three days before the inauguration of Donald Trump, who has threatened both U.S. partners with tariffs.

The upgrade, more than eight years in the making, reinforces a 2000 agreement between the European Union and Mexico. It also comes after the EU struck a deal with South America’s Mercosur bloc in December.

“This landmark deal proves that open, rules-based trade can deliver for our prosperity and economic security, as well as climate action and sustainable development,” European Commission President Ursula von der Leyen said.

Trump, who returns to the White House Monday, has made sweeping threats of tariffs against U.S. trading partners including the EU, Canada, Mexico and China.

“EU exporters will gain new commercial opportunities, including our farmers and agri-food companies,” von der Leyen said.

Friday’s deal removes tariffs as high as 100% on major EU export products such as cheese, poultry, pork, pasta, apples, jams and marmalades, as well as chocolate and wine.

And it bans the sale of imitations of distinctive food and wines from EU regions such as Champagne, Parma and Rioja.

“EU exporters will gain new commercial opportunities, including our farmers and agri-food companies,” von der Leyen said.

The agreement also “sets legally binding commitments on labor rights, environmental protection, climate change and responsible business conduct,” while strengthening supply chains for critical raw materials, the EU said.

And it will give EU businesses access to Mexican government contracts “on an equal footing” with Mexican companies.

The bloc’s top agriculture official Christophe Hansen said Europe’s farmers and food and drink producers already export more than 2 billion euros ($2.06 billion) worth of products to Mexico.

Total trade in goods between the EU and Mexico was worth 82 billion euros ($84 billion) in 2023.

EU ‘strengthens’ global role

EU lawmakers welcomed the deal as a positive response to rising protectionism, led by Trump who has long pushed an America-First economic and trade policy.

“Despite tariff threats, EU, Mexico reinforce commitment to open, fair, and rules-based trade,” said Bernd Lange, who leads the EU parliament’s trade committee.

“Thanks to this new agreement, the EU strengthens its role in the world as a guarantor of free trade at a time of rising protectionism,” said Spanish EU lawmaker and standing parliament rapporteur for Mexico, Borja Gimenez Larraz.

They said the deal could see EU exports to Mexico grow by 75%.

The deal — which also boosts cooperation in other areas including organized crime, drugs and migration — will become official once it is ratified by the EU and Mexico.

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By Agence France-Presse