In 2019 the conference for the signing of the UK-Mexico Trade Continuity Agreement was held, which established the UK as the Agreement’s 16th trading partner and allowed the UK to retain the tariff advantages they had when they were part of the European Union. The UK registered trades of 5.212 million dollars, 12.5% more than in 2018. Earlier this week the UK government signed a trade deal with Mexico; “locking in tariff-free trade and other benefits for British businesses and consumers”¹.
British trade registered a rise of 668,000 million pounds in 2019, before its post-Brexit separation, and the United Kingdom has coordinated strategies to lay the foundations of an independent trade policy based on continuity agreements with trade partners around the world. So far the UK has registered deals with 58 countries for 198 billion pounds of annual trade.
The agreement between the United Kingdom and Mexico will focus on companies that commercialize goods and services that make up the strong bilateral trade relationship that until now has traded more than 5 billion dollars a year. This, in turn, will provide coverage for industries such as the automotive, pharmaceutical, textile, agricultural, food and beverage industries as well as other manufacturing industries with the intention of avoiding the tariff burden imposed by the MFN conditions of the World Trade Organization (WTO).
The agreement tries to avoid some of the stricter terms that the WTO applies. It is an important part of the United Kingdom’s exit from the Brexit treaties, as without this agreement, tariffs of around 59 million pounds would have been applied on UK exports for cars, beer and tea to name a few.
On the other hand, Mexico is a member of the Comprehensive Progressive Trans-Pacific Partnership Agreement (CPTPP), which for the United Kingdom could be a very important “springboard”., The CPTPP is a trade pact between 11 countries, with an aggregate gross domestic product that represents 13% of the world economy. It entered into force on December 30, 2018 with Australia, Canada, Japan, Mexico, New Zealand and Singapore before Vietnam joined a year later followed by Brunei, Chile, Malaysia and Peru after their respective ratification processes were completed.
¹https://www.gov.uk/government/news/uk-and-mexico-sign-trade-deal
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Aldo Weidner Z.
Market Analyst – Hf LATAM
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