EU, Mexico sign updated trade deal to strengthen economic ties

The European Union and Mexico have signed a modernised trade agreement aimed at deepening economic cooperation and reducing reliance on the United States and China, as geopolitical tensions continue to reshape global trade relations.

European Commission President Ursula von der Leyen and European Council President António Costa signed the updated deal on May 22 during an EU–Mexico summit in Mexico City, alongside Mexican President Claudia Sheinbaum, Euronews reports. 

The agreement comes two decades after the original pact and forms part of the EU’s broader strategy to expand its influence in Latin America, shortly after the Mercosur trade agreement entered into force.

“The EU and Mexico are committed to a close strategic partnership,” von der Leyen said, adding: “Today’s modernised Agreements set out our shared vision of the future and will deliver many benefits for both sides.”

The agreement seeks to strengthen economic resilience for both parties as they navigate increasing trade pressure from Washington and Beijing. Mexico remains heavily dependent on the US market, while also serving as a growing hub for Chinese-linked manufacturing, particularly in the electric vehicle sector.

The EU–Mexico deal will expand market access for European goods including agri-food products, pharmaceuticals, and machinery, while also opening EU markets to Mexican exports such as coffee, fruit, chocolate, and agave syrup.

EU trade Commissioner Maroš Šefčovič, who also attended the summit, said: “At a time of growing global uncertainty, the EU and Mexico are choosing openness, partnership and ambition,” adding that “more than 43,000 European companies export to Mexico, while over 11,000 EU companies operate in the country.”

The agreement also provides protection for 568 European and 26 Mexican geographical indications and opens public procurement markets on both sides.

Trade between the EU and Mexico reached €86.8 billion in goods in 2025, along with €29.7 billion in services in 2024, according to EU figures. However, this remains significantly smaller than Mexico’s trade with the United States, which exceeded $900 billion in 2024.

The deal is part of a wider EU push to strengthen its presence in Latin America as China continues to expand its regional influence.

“97% of the GDP of Latin America and the Caribbean will be covered by sophisticated preferential agreements with the European Union,” a senior EU official said, adding: “There is no other region in the world that has such a dense and connected network of agreements.”

The agreement follows the EU’s broader trade expansion in the region, including the Mercosur pact with Argentina, Brazil, Paraguay and Uruguay, which entered into force earlier this month.

However, that deal has faced criticism from European farmers over concerns about competition, while legal challenges have also delayed full ratification. EU officials say the Mexico agreement includes safeguards such as tariff quotas on sensitive agricultural imports to avoid similar backlash.

By Sabina Mammadli