• Mexico and the European Union announced a revamped trade agreement.
• The agreement aims to reduce tariffs on agricultural imports from Europe.
• This move comes just days before Trump's inauguration amid tariff threats.
• Trade between Mexico and the EU constitutes a minor fraction of Mexico's overall trade.
• The deal seeks to strengthen strategic cooperation on geopolitical issues.

MEXICO CITY — The Mexican government and the European Union revealed a significant update to their trade pact on Friday, focused on significantly boosting trade and investment just days before the inauguration of President-elect Donald Trump, who has issued threats of imposing steep tariffs on Mexico and its trading partners. The newly restructured Global Trade Agreement aims to reduce tariffs on agri-food imports from Europe, eliminate various barriers to facilitate investment, and enhance Mexican exports of resources like fluorspar (used in electronics), antimony, copper, zinc, and lead.

According to the European Union, the updated deal, which had first come into effect 25 years ago, is designed to foster strategic cooperation on vital geopolitical matters. "We have entered a new era in our strategic partnership with Mexico today. Our upgraded agreement shows the E.U. and Mexico united for freer trade and an open global economy," stated Kaja Kallas, Vice President of the European Commission, in a formal announcement.

The timing of this agreement is critical, as it arrives just before Trump's return to the White House, during which he has threatened to levy tariffs as high as 25% on all Mexican goods. Such measures could severely impact both economies. While the new agreement with the E.U. may help lessen some potential damages from fluctuating U.S.-Mexico trade, it is important to note that trade between Mexico and the E.U. still represents only a small fraction of Mexico’s overall trade, which exceeded $800 billion with the U.S. in 2023, compared to only $84 billion with the E.U. that same year, according to the EU statistics.

Gabriela Siller, an expert on economics from Banco Base, emphasized the potential of the new agreement as a means to diminish the intense influence the U.S. wields over Mexico’s export dynamics. “This is very positive for Mexico, because it needs to diversify its exports,” she noted, highlighting the fact that around 80% of Mexico’s exports have historically gone to the United States. Such reliance gives the U.S. significant leverage in negotiations and potential tariff implementations.

So far, Mexico’s Economy Ministry has not released an official statement regarding the revamped agreement with the E.U. In related developments, Economy Secretary Marcelo Ebrard was reported to be engaged in meetings with Detroit's automotive sector representatives to enhance bilateral relations.

For extensive coverage on Latin American affairs, visit LA Times and AP News.