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UK, Mexico Sign Continuity Trade Deal

by Jason Gorringe, Tax-News.com, London

22 December 2020


On December 15, 2020, the UK and Mexico signed a trade continuity agreement that will apply when the Brexit transition period ends.

The TCA will maintain preferential access for trade between Mexico and the UK following the end of the UK's transition period with the EU on December 31, 2020. Both sides aim to bring the TCA into force on January 1, 2021, subject to parliamentary procedures and legislative approvals.

According to a joint statement issued by the UK and Mexico, the TCA "will deliver vital coverage for the automotive, pharmaceutical, textiles, agriculture, food and drink, and other manufacturing industries." The statement explained that this "will prevent the additional duty burden that would be levied under World Trade Organization most favored nation terms." Tariffs on UK car exports and UK beverage exports will remain at zero percent, compared to 20 percent under WTO terms.

The TCA is intended to be transitional in nature. The UK and Mexico have agreed to begin negotiations on a new free trade agreement in 2021. The joint statement explained that "a future deal should be at least as liberalizing as the recently agreed EU-Mexico Modernized Agreement, but with an ambition to go further in areas of mutual interest."

The UK and Mexico hope to conclude the new agreement within three years. The UK also intends to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The UK and Mexico have agreed that their future bilateral negotiations should run parallel to the CPTPP process.

TAGS: free trade agreement (FTA) | export duty | interest | tariffs | World Trade Organisation (WTO) | trade treaty | Mexico | United Kingdom | food | manufacturing | import duty | trade | European Union (EU) | Europe

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