Just before the potential imposition of tariffs by U.S. President Donald Trump, negotiations that had been stalled for years gained new momentum.
The European Union and Mexico have resumed negotiations on a free trade agreement, reviving talks that had been stalled since 2020. The move comes just before U.S. President Donald Trump’s inauguration, during which he had threatened tariffs on both regions. Previously, the EU and Mexico were bound by a 2000 trade agreement covering only industrial goods. The renewed discussions aim to expand the agreement and address broader trade issues.
The new agreement aims to facilitate EU investments in Mexico, eliminate trade barriers like tariffs, and boost European agricultural products and food exports. The EU also seeks improved access to materials crucial for the green and digital transformation. Mexico is the world’s largest producer of silver and a key supplier of gold, copper, and zinc, as well as critical minerals like manganese (PDF). The country is also believed to hold significant, untapped reserves of rare earth elements.
The bloc is heavily dependent on raw material imports.
As part of the 2024 Critical Raw Materials Act, the bloc aims to diversify its supply sources by 2030. Currently, the EU relies heavily on China for imports of essential resources like rare earth elements and gallium. A recent trade agreement with Mercosur marked progress toward diversification (we reported). However, the new deal with Mexico must still be ratified before taking effect. The next steps involve presenting it to the EU member states for approval.
Photo: cdominiquephoto. via Canva
