Four years after negotiations started on a new trading relationship between the two sides, the European Union (EU) and Mexico have now concluded negotiations for a new free trade agreement.

On a phone call yesterday, EU trade commissioner Phil Hogan and Mexican economy minister Graciela Márquez Colín came to an agreement on the outstanding elements of the pact, including the exact scope of the reciprocal opening of public procurement markets. With this now completed, the two sides can advance to the signature and ratification stage.

Once ratified, the trade deal will replace the existing EU-Mexico Global Agreement, which entered into force in 2000 and focused mainly on industrial goods.

“While most of our efforts have been focused lately on tackling the coronavirus crisis, we have also been working to advance our open and fair trade agenda, which continues to be very important,” says Hogan. “Openness, partnerships and co-operation will be even more essential as we rebuild our economies after this pandemic. I am very pleased, therefore, that together with our Mexican partners, we share similar views and that our continued work could now come to fruition. Today’s agreement is clear evidence of our shared commitment to advance our agenda of partnership and co-operation. This agreement – once in force – will help both the EU and Mexico to support our respective economies and boost employment.”

Under the new agreement, practically all trade in goods between the EU and Mexico will be duty-free. According to the EU, European agricultural exports will benefit the most. The deal will provide preferential access for many cheeses which currently have tariffs of up to 20%, and significant new access for many others within annual quotas. Tariffs for chocolate (currently up to 30%) and pasta (to 20%) will also be lowered.

Mexico’s banana farmers, who exported almost 65,000 tonnes of the fruit to the EU last year, will benefit from a reduction in quota tariffs which will enable them to out-compete Ecuador, Colombia, Costa Rica, Honduras and Guatemala. The agreement also now includes progressive rules on sustainable development, such as a commitment to effectively implementing the Paris climate agreement.

“It is very encouraging to see a trade deal sealed during the Covid-19 crisis,” says Anahita Thoms, trade partner at law firm Baker McKenzie. “It is particularly noteworthy that the deal covers various sectors, including finance and agriculture, and that it is the first between the EU and a country from Latin America that protects investment. This is a clear signal for free trade and against protectionism.”

This is the latest in a series of free trade deals for the EU. In November last year, the bloc agreed a pact with Singapore, which European Commission president Jean-Claude Juncker described as “crowning the efforts of this commission to build a network of partners committed to open, fair and rules-based trade.” This followed the signing in July of the EU-Vietnam Free Trade Agreement (EVFTA), which will eventually eliminate 99% of tariffs between the two sides.

On hold for now are the bloc’s talks with the US, while talks are planned later this year with Australia, New Zealand and Chile.