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The Trade Continuity Agreement between Mexico and the United Kingdom

The Trade Continuity Agreement between Mexico and the United Kingdom (The Agreement) operates as both countries achieved slight growth in their bilateral trade in goods from January to July 2022.

In those seven months, merchandise trade flows between the two countries was US$3.092 billion, a year-on-year increase of 3.4%, according to data from the Bank of Mexico (Banxico).

At year-on-year rates, Mexico’s corresponding exports were 1.745 billion dollars (-4.3%), while UK sales totaled 1.347 billion (+15.4%).

Previously, trade relations between the United Kingdom and Mexico were governed by the Global Agreement, as amended, which had been in place since July 1, 2000 (with respect to trade in goods), and since October 1 of the same year (with respect to trade in services).

The Global Agreement ceased to apply to the United Kingdom on January 1, 2021.

On the other hand, the Agreement is one of the 38 Regional Trade Agreements (RTAs) of the United Kingdom and one of the 23 of Mexico.

Signed on December 15, 2020 and effective as of June 1, 2021, the Agreement contains 12 Articles and one Annex.

However, according to information from the World Trade Organization (WTO), Article 3 incorporates by reference most of the provisions of the Global Agreement, as well as related Decisions of the EU-Mexico Joint Council and Joint Committees.

Trade Continuity Agreement

The Annex to the Agreement contains the modifications to the content of the Incorporated Global Agreement.

The Agreement is also supplemented by an exchange of notes on the provisional entry into force of the Agreement on January 1, 2021; and by a joint political declaration accompanying the signing of the Agreement.

In the preamble to the Agreement, the Parties reaffirm their desire to continue to apply between them the rights and obligations set out in the Global Agreement, and that the main objective of the Agreement is to preserve the preferential conditions relating to trade between them (Article 1).

In Article 9, the Parties agree to initiate negotiations for an “ambitious, modern and comprehensive free trade agreement” as soon as the opportunity arises and within one year from the date of entry into force of the Agreement.

The two countries will seek to conclude the negotiations within three years from the date of entry into force of the Agreement.

The Parties began negotiations on May 20, 2022.

 

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