Amid trade tensions with the US, Mexico draws closer to Europe

Amid trade tensions with the US, Mexico draws closer to Europe

Mexico Economy & Policy Corporate & Sovereign Strategy

Mexico is moving to deepen its trade ties with the European Union (EU) as the future of the North American Free Trade Agreement (NAFTA) looks uncertain.

Mexico and the EU announced plans on Wednesday to hold meetings in April and June in what officials called "an accelerated negotiation schedule" for a new trade agreement.

"We will take our relations fully into the 21st Century," Mexico’s Economy Minister Ildefonso Guajardo and EU Trade Commissioner Cecilia Malmstrom said in a joint statement. "Together, we are witnessing the worrying rise of protectionism around the world. Side by side, as like-minded partners, we must now stand up for the idea of global, open cooperation."

The statement comes as tensions over trade between Mexico and the US have intensified under President Donald Trump, who has said he plans to renegotiate NAFTA, which also includes Canada.

On Friday, Mexican President Enrique Peña Nieto and Trump spoke by telephone after a week that saw Trump claim Mexico "has taken advantage of the US for long enough" a day after Mexican and US officials held talks focused on trade and other issues. The Mexican president cancelled a planned meeting with Trump in response to the US leader’s claims that Mexico will pay to build a wall along the US-Mexico border.

The EU and Mexico first signed a free trade agreement in 2000. But Guajardo and Malmstrom said "global trade patterns have changed" and there is a need for a "broader and more far-reaching" agreement.

The EU is Mexico’s third-largest trading partner after the US and China. Trade between the EU and Mexico more than doubled between 2005 and 2015 to €53bn from €26bn.

Last month, in a speech laying out Mexico’s foreign policies as it prepares for negotiations with the Trump administration, Peña Nieto said Mexico plans to broaden its export markets and increase investment from Asia, Latin America and Europe.