EU and Mexico renew trade and investment partnership

The European Parliament approved the renewal of its trade partnership with Mexico. Following the signing of a trade agreement in 2000, the two economies had become increasingly intertwined. Now this agreement has been modernized, aiming to further deepen that integration. The EU-Mexico Modernized Global Agreement (MGA) was signed in May 2026. It has two parts: a political and cooperation pillar as well as a trade and investment pillar.

Key changes in the Modernized Global Agreement (MGA)

• Both parties commit to opening their public procurement markets and to ensuring equal treatment of suppliers and service providers. EU companies will be able to participate in procurement processes at regional and local levels in Mexico.
• Trade in services will be made easier in the field of finance, telecommunications, transport and environmental services. Qualifications e.g. for lawyers or architects will be recognized, facilitating cooperations considerably.
• The rules for foreign investment were reviewed aiming to make them more transparent and predictable. Moreover, the mechanism for resolving disputes was revised.
• Tariffs for some agri-food products will be reduced; for other products tariff quotas will be created. The protection of geographical indications will be expanded to additional European products. Tariffs for most industrial products had already been cut in 2000.
• Sustainable development: The MGA renews the trade partners’ commitment to the Paris Climate Accord, setting the standards for sustainability.

Next steps and entry into force

The Modernized Global Agreement (MGA) will enter into force once it has been fully ratified by the EU member states and Mexico. The MGA has to be ratified by all European member states. In the meantime, an interim trade agreement (iTA) may take effect. It covers the trade parts of the MGA that are an exclusive EU competence not requiring the approval of all states. Thus, the iTA will allow for the updated trade arrangements to apply earlier, without waiting for all EU member states to ratify the MGA. The iTA will expire and be replaced by the MGA once the Modernized Global Agreement will be approved at the European level and ratified by Mexico. The MGA is exspected to enter into force in January 2027.

Renewal sends a strong signal

The renewal of the agreement is in line with the European Union’s focus on free trade and on improving access to foreign markets through free trade agreements. In a global economy increasingly marked by protectionism and digressions from WTO rules, the modernization of the agreement with Mexico is a clear signal that the European Union supports free and rule-based trade. Businesses will benefit from the agreement as it facilitates market access. The MGA can also contribute to the diversification of supply chains, thereby decreasing reliance on a few dominant markets.

Trade between Bavaria and Mexico

Mexico is a strategic partner of the EU and the second largest trading partner in Latin America – bilateral trade is worth €100bn. The EU is Mexico’s 3rd biggest trading partner and 2nd largest export market. Bavaria and Mexico have strong economic ties, too. In 2025 Bavaria and Mexico traded goods worth 3,977 billion euros. Since 2019 exports and imports have been trending upwards. Especially the trade in machinery, vehicles, vehicle parts and electrical equipment flourished. Consequently, Mexico has ranked 25th among Bavaria’s most important trade partners last year.

Mexico is not only an important export and import market but also a key investment location for the Bavarian industry. Bavarian investment in Mexico reached 7,893 million euros in 2024, with some industries using Mexico as a hub from which they export their products to Canada and the US. Therefore, Bavarian companies will not only keep an eye on how the economic relationship between the European Union and Mexico evolves. They will also continue to monitor closely the renegotiation of the USMCA and evaluate how changes in the trade relationship between the American countries will impact their business.