A report from World Trade Organization (WTO) details the advantages of the Trade Continuity Agreement between Mexico and great Britain (Agreement).

This Agreement supersedes the Agreement on Economic Association, Political Coordination and Cooperation between Mexico and the European Union (Global Agreement).

Thus, the global average of tariffs MFN applied in 2021 by the UK is 3.8% (2.5% for industrial products and 8.9% for agricultural products).

Under the MFN, 47% of UK tariffs are duty-free; 57.1% of industrial products and 18.8% of agricultural products are duty free.

Under the Agreement, in 2021, Mexican exporters benefit from an absolute preference margin of 3.3% with respect to current MFN rates; margin of 2.48% for industrial products and 6.8% for agricultural products.

Also, under the Agreement, the proportion of duty-free passage for imports from Mexico is 90.8% by 2021 (66.1% for agricultural products and 99.7% for industrial products).

Business Continuity Agreement

In contrast, in 2021, Mexico’s global average of MFN tariffs will be 6.7% (5.5% for industrial products and 14.2% for agricultural products).

Under the MFN regime, 47.4% of Mexico’s tariffs are duty-free; 52.8% of industrial products and 14.6% of agricultural products are duty free.

Under the Agreement, in 2021, UK exporters benefit from an absolute preference margin of 6.1% with respect to current MFN rates; margin of 5.5% for industrial products and 10% for agricultural products.

Also under the Treaty, by 2021, the proportion of duty-free passage for imports from the UK is 96.2% (76.7% for agricultural products and 99.4% for industrial products).

two-sided trade

Previously, trade relations between the UK and Mexico were governed by the Global Agreement, as amended, which has been in force since 1 July 2000 (with respect to trade in goods), and since 1 October of the same year (with respect to trade in services). The Global Agreement ceases to be effective in the UK on 1 January 2021.

Lastly, the Agreement is one of 38 Regional Trade Agreements (RTA) from the UK and one in 23 from Mexico.

Signed on 15 December 2020 and entered into force on 1 June 2021; between 1 January 2021 and the effective date of the Agreement, preference is granted provisionally, through an exchange of Notes between the Parties.