On Friday 20 May 2022, the Department for International Trade launched negotiations for an enhanced and upgraded Free Trade Agreement with Mexico, with the first round of negotiations to be held in Mexico City in July.
The Department is publishing a comprehensive set of documents setting out the UK’s strategic approach for negotiations between the UK and Mexico. In line with our commitments to scrutiny and transparency, these documents have been published and placed in the House libraries. The UK’s negotiating objectives for the upgraded agreement, published today, were informed by our Call for Input, which requested views from consumers, businesses, and other interested stakeholders across the UK on their priorities for enhancing our existing trading relationship with Mexico.
These negotiations follow our signing of the UK-Mexico Trade Continuity Agreement on 15 December 2020, which committed both parties to commence negotiations on a new, comprehensive and bespoke agreement by 1 June 2022.
An enhanced and comprehensive agreement with Mexico is a key part of the UK’s strategy to secure advanced modern agreements with new international partners, and upgrade existing continuity agreements in order to better suit the UK economy. Through these enhanced trade partnerships we can deliver economic growth to all the nations and regions of the UK and create new opportunities for UK business.
Mexico is an important trading partner for the UK, with trade worth £4.2 billion in 2021 despite the disruptions of the coronavirus pandemic to global trade. Mexico is one of the world’s largest democracies and the 16th biggest global economy. Its population is almost double the size of the UK’s and is projected to reach 146 million people by 2035. Its demand for global imports is forecast to grow by 35% in real terms between 2019 and 2035 as its economy expands. The current agreement ensured reduced duties on UK exports in key industries such transportation, chemicals, and machinery manufacturing. These already popular products could face further demand in a growing Mexican market.
Our existing agreement removes tariffs on the majority of goods we trade. However, the agreement is outdated and not designed for a digital age, containing limited provisions on services, which employs 82% of the UK workforce. In these negotiations we will be advancing an upgraded trade partnership with cutting-edge services and digital provisions tailored to our unique strengths as the world’s second-largest services exporter and a leader on digital trade. An upgraded trade agreement with enhanced provisions can support UK trade across sectors of UK strength, including financial, creative, digital and technology services.
Forging stronger trade links with Mexico will also support the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a free trade area with a collective GDP of £9 trillion in 2021, of which Mexico is an influential member.
The Government is determined that any agreement must work for consumers, producers, investors, and businesses alike. We remain committed to upholding our high environmental, labour, public health, food safety and animal welfare standards, alongside protecting the National Health Service.
The Government will continue to update and engage with key stakeholders, including Parliament and the Devolved Administrations, throughout our negotiations with Mexico.