The UK and Mexico have now opened negotiations towards a new FTA (free trade agreement). This will replace the existing post-Brexit 'rollover' trade agreement that we inherited from our time as members of the EU.
Existing Agreements
While 97% of UK exports are already eligible for tariff-free entry into Mexico under the existing agreement, the vast majority of UK food products continue to face prohibitive tariffs. In spite of this, UK food and drink exports to Mexico were worth an average of over £136m from 2019 to 2021.
While the UK prepared for Brexit, the EU and Mexico were busy upgrading the terms of their trade agreement, with the EU securing better access in principle into the Mexican market for European food and drinks in 2018. However, the agreement hasn’t been implemented yet due to political issues. There is therefore a high degree of expectation on UK negotiators that we too can build on the current terms of trade and secure enhanced access to the Mexican agri-food market.
Opportunities for British Producers
The negotiation of enhanced tariff-free access for UK agri-products can offer opportunities to increase exports of high-quality British food and drink to Mexico. Notably, NFU feel that negotiators can do more to secure enhanced access to the Mexican market for dairy products and pork.
Negotiations should also incorporate agreements on animal and plant health certification. Such restrictions currently inhibit the potentially lucrative export of British beef and lamb, along with certain cuts of pork.
Sensitive Sectors
Mexico is a huge agricultural exporter. Significant investment in Mexican agricultural infrastructure has meant that it has exported more food than it has imported since 2015.
Any agreement must maintain safeguards for sensitive sectors with the potential to be disrupted or undermined by Mexican imports. These include beef, sugar, eggs and horticulture products during their respective British seasons.
NFU President Minette Batters said:“While our existing agri-food trade with Mexico is modest, there are significant opportunities for British farmers to export more quality produce. For example, we know that there is demand for British dairy and meat, notably pork. However, the government must remain aware that Mexico is a significant agricultural exporter which will want to increase its access to the prized UK market. Safeguards are needed for sensitive sectors, such as horticulture, beef, eggs, and sugar in this case.”
CPTPP Membership
Mexico is a member of the 11-country trading bloc, the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). The UK is simultaneously seeking to join the CPTPP.
It is unclear whether a bilateral trade deal will be struck first between the UK and Mexico, or whether the UK will accede to the CPTPP before these bilateral negotiations conclude. In either case, we believe it’s crucial to ensure that the UK doesn’t have to pay twice in terms of granting preferential market access through both negotiations. The same applies to the UK's negotiations with Canada.
Evidence to DIT
The NFU submitted evidence to the DIT (Department for International Trade) on trade relations with Mexico in June 2021 ahead of the talks beginning.
Existing trade agreements between the EU and Canada and Mexico were initially ‘rolled over’ to ensure trade could continue post-Brexit. The consultation looked at these existing FTAs, as well as opportunities to improve trade in future negotiations.
In their response, NFU highlighted the lack of sufficient EHCs (Export Health Certificates) for pig meat, including fifth-quarter cuts, and called for greater access for these products into this market. Since then DIT announced the opening of the Mexican market for pork exports.
The NFU also called for greater market access opportunities for British dairy, fruit and vegetables, poultry meat and organic goods into Mexico. There is concern, however, about the potential for greater market access being given to Mexican exports of beef, eggs, sugar and horticultural goods into the UK.