The European Union and Mexico are pushing forward with a free-trade agenda, whether or not other major nations want to join them.
The nations over the weekend came to a new bilateral trade agreement making “virtually all” products and provisions duty-free, which includes provisions for further promoting environmental sustainability by calling for shifts to low-carbon methods and infrastructure, as well as the protection of workers’ rights. The deal also reduces red-tape for the trade of industrial goods, like car parts and medical devices, and opens up for the first time Mexico’s public procurement market to countries in the EU.
This new level of openness between the nations seems to be a direct result of protectionist rhetoric by President Trump and the Brexit referendum in the U.K., which will see the country pulled out of the EU sometime next year.
EU trade commissioner Cecilia Malmström said the agreement with Mexico “sends a strong message to other partners that it is possible to modernize existing trade relations when both partners share a clear belief in the merits of openness, and of free and fair trade.” She noted that the negotiations took less than two years and that the outcome is “mutually beneficial.”
When the Trump administration in early March said it would be adding tariffs to steel and aluminum imports, to which the EU is not immune, the European Commission responded by saying it would impose its own tariffs on goods, including denim and T-shirts. Malmström said then that “protectionism cannot be the answer, it never is.”
Jean-Claude Juncker, president of the European Commission, echoed that sentiment, saying in a statement: “Trade can and should be a win-win process and today’s agreement shows just that.”
“[Mexico and the EU] did it as partners who are willing to discuss, to defend their interests while at the same time being willing to compromise to meet each other’s expectations,” Juncker added.
The EU now has updated trade agreements with Canada, Japan and Singapore, as well as Mexico, and the negotiations come at a time when the trade position of the U.S. is relatively uncertain.
After starting off his presidency by pulling the U.S. out of the Obama-era Trans-Pacific Partnership trade deal — a decision he earlier this month was reported to be reconsidering — Trump last month hit China with a 25 percent additional tariff on things like machinery and consumer electronics, among scores of other goods and products. He said it was in response to trade violations by China, including theft of technology and trade secrets estimated to cost U.S. industry tens of billions of dollars every year.
While the tariffs only peripherally touch the apparel industry by making the import of sewing and textile machines and related parts more expensive, Trump threatened to add even more goods after China hit back with its own tariffs.
The Trump administration is also still in negotiations with Mexico and Canada over the North American Free Trade Agreement, a trilateral trade deal that Trump railed against on the campaign trail. While the administration entered into the talks with an eye on updating the deal, something apparel and retail trade groups strongly support, the U.S. or another country pulling out of the deal altogether is still looming.
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