It took a decade, but it arrived. This Friday, the Mexican president, Claudia Sheinbaumreceived at the National Palace a delegation from the European Union (EU)headed by Ursula von der Leyen y Antonio Costato sign a new trade agreement, whose negotiations began in 2016. The Modernized Global Agreement with two parts, one commercial and the other political, aims to replace one signed at the beginning of the century and modernize the bridges between the bloc and the Latin American country.
The president of the European Commission appeared at the signing of the agreement with a rebozo (traditional Mexican garment similar to a shawl) that she received as a gift from a group of indigenous women. “It is an honor for me to use it on this historic occasion,” he said. “The relationship between Mexico and the European Union can be an example of a form of economic strengthening with respect to sovereignty“added Sheinbaum after thanking Von der Leyen for her gesture. The leaders clarified the specific investment commitments and trade agreements. However, the event could not escape the shadow of Donald Trump. To questions from the press, the Mexican president clarified that the new agreement does not influence the negotiations of the free trade agreement with the United States. The president of the Commission added that the commitment of both partners has decades of history, and the agreements between the bloc and Mexico simply strengthen the relations of both parties with the United States.
Negotiations began the year of the first election of Trump and it was the Republican’s second victory that ended up accelerating the agreement, injecting a sense of urgency on both sides of the Atlantic. The discussions were closed last November, resulting in an agreement that contemplates deepening the cooperation on topics like security, migrationo climate change. With the treaty, the EU amplifies its intention to become the pillar of protection of international order.
The president of the European Council, António Costa, highlighted this in a speech before the Mexican Senate. “Europe and Mexico can be important allies in the defense of a United Nations reform“he said, insisting on the importance of preserving the fundamental principles of the international order and on Mexico’s strategic role for this purpose. Thus, the EU stands up to pressure from the US Government.
Tension with Washington
The political alliance can also be vital for Mexico. The agreement comes amid moments of deep tension between the country and the United States, its main trading partner, with accusations against senior state officials of the ruling party of having ties to the drug trafficking. Sheinbaum met, the same day Costa and Von der Leyen landed, with the head of internal security of the Trump Administration to mitigate the problem, but there seems to be little to satisfy the Republican, who is running out of more distant objectives such as Iran o Cuba.
Los economic benefits They are not disposable. The agreement establishes new mechanisms, eliminates duty and creates investment opportunities for companies on both sides. The Mexican Business Council for Foreign Trade, Investment and Technology estimates that trade, currently valued at nearly 86 billion euros, could grow by up to 35%.
The Modernized Global Agreement also establishes a fast track for trade exchange. The most valuable, the installation of a permanent dispute resolution courts between European companies and the Mexican State. For Valeria Moy, general director of the Mexican Institute for Competitiveness (IMCO), this is the most relevant result of the decade of negotiations.
Right now, disputes between companies and the Government depend on an individualized arbitration process. The permanent court could speed up the process and provide greater security for investorsin a capital-hungry economy. These types of modifications reveal the spirit behind the agreement, which also includes a specific section for digital commerce, small and medium-sized businesses and creates a clear framework for political exchange.
The signing of the agreement has also been symbolic due to the negotiation mechanisms, explains Moy. For the expert, beyond the figures, it is a very positive agreement due to the creation mechanism: clear negotiations, institutionalization of the talks, and a straight and clear path to conceive a positive treaty for both parties. This is something that has not been seen in the negotiations with the United States, which no longer have a defined direction. Henio Hoyo, internationalist at the Center for Economic Research and Teaching (CIDE), believes that this is precisely what the European Union hoped to demonstrate in the talks.
Diplomatic capacity
“For Europe, signing a new agreement with Mexico just after reaching several agreements with Canadademonstrates the capacity of the european diplomacy“he explains by phone. Furthermore, the new treaty allows the country not to be left behind while the bloc revitalizes its trade relations with other Latin American countries and achieves diversification of its trading partners.
Esa diversification has become increasingly relevant in the face of tariff pressures from the Donald Trump Government and the complex task of balancing the relationship with China. The EU, Mexico’s third trading partner, is presented as an attractive alternative, explains Hoyo, especially to attract investments in strategic sectors that are no longer attractive to Americans due to Republican pressure to maintain investments within the country.
The sector of automobile is a perfect example, explains Valeria Moy. The expert believes that, in the current context, there is no possibility of a free trade agreement in its entirety, but the willingness of the EU and Mexico to open trade more is evident in the modernized agreement. The agricultural agreements are the greatest example of this openness and demonstrate a willingness to make changes in protectionist rules and a unique opportunity for the Latin American country, which has not overcome the impasse with the United States in this sector.
Both experts agree that the agreement does not represent a miracle solution to the problems caused by sudden changes in US international trade policy. However, it represents a step forward and a demonstration that the multilateralism It still has a place in Trump’s world.
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