The European Union and Mexico have reached an agreement in principle on a new free trade pact, a step forward for both sides in the face of growing US protectionism under President Donald Trump.
Since its plans for a trade deal with the United States were put on hold following Trump's election victory, the EU has instead focused on trying to seal pacts with other free-market countries.
The preliminary agreement with Mexico, which seeks to reduce its dependence on the United States, follows another pact the EU reached last year with Japan. The EU will also hold talks next week with Mercosur, the bloc comprising Argentina, Brazil, Paraguay and Uruguay.
The EU and Mexico have been negotiating an update to a 21-year-old trade deal that mostly covers industrial goods. The sides wanted to add agricultural products, more services, investment and government purchases, and include provisions on labor standards and environmental protection.
A joint statement issued by European Commissioners Cecilia Malmstrom and Phil Hogan and Mexican Economy Minister Idelfonso Guajardo gave no details on the main points of the agreement.
"After several months of intense negotiations, this afternoon we reached an agreement in principle on trade and investment between Mexico and the European Union, as part of the modernization of the bilateral legal framework," the statement said.
"This agreement will help to adapt our trade relationship to meet the opportunities and challenges of the 21st century. Mexico and the European Union agree on the importance of open trade, fair and based on rules," he added.
The statement also indicated that negotiators from both sides will continue working to resolve outstanding technical issues and finalize the legal text.
The main challenges have been how to open the respective markets to food and drink products, such as tequila, chicken and asparagus from Mexico and dairy products from Europe, and the EU's demand to recognise geographical indications..
These guidelines protect agricultural production, for example by determining that the term "champagne" can only be used for sparkling wine from northern France or, more problematically for Mexico, that the word "manchego" can only be used for cheese made from sheep's milk from central Spain.
Mexico is more accustomed to protecting its products with brands and has its own "manchego" made from cow's milk.
Source: Reuters
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