FTA Modernization to Boost Premium Exports to Europe and Reduce U.S. Dependence

With lower tariffs, the agricultural and automotive sectors will increase exports to the European Union, stated Economy Secretary Marcelo Ebrard. Pedro Canabal Hermida, Legal and Foreign Trade Partner at Bakertilly, noted that a premium agro-industry and specialized manufacturing will be required.

With the modernization of the Free Trade Agreement between Mexico and the European Union (TLCUEM), which eliminates 83% of tariffs, the country will need to export a premium agro-industry, including processed foods and specialized manufacturing, due to the high standards required by the European Union, stated Pedro Canabal Hermida, Legal and Foreign Trade Partner at Bakertilly.

"We are adding a specific focus here. It’s not just called agro-industry; it’s premium. It’s not just food; it’s processed. It’s not just manufacturing; it’s specialized. I also see opportunities in medical devices. Therefore, the value of our exportswill matter more than their volume," he expressed in an interview with La Silla Rota.

He added that the export sector will diversify, likely integrating the country into greater value chains to move away from the comfort of solely selling to the United States.

"It is challenging, but it will yield good dividends. So, it is good news, but we must face the challenge of more regulation, even if it means more profit. This is excellent as it will open markets we haven't reached. Our industrialists have a significant challenge ahead. Thus, besides being a commercial reconfiguration, it is also a geopolitical reconfigurationwith the European Union," he added.

This morning, Economy Secretary Marcelo Ebrard asserted that our country's exports to that continent could increase by up to 30%.

"Which sectors would be the most favored? The entire agricultural sector first; we will stop having tariffs on almost everything. The automotive industry will have zero tariffs, so it will not be surprising to see an increase in exports to the European Union," the official noted.

According to information from the Ministry of Economy, in 2020, the trade balance between Mexico and the EU was 58.224 billion dollars, where Mexico had a deficit of 21.928 billion dollars; a figure that practically doubled by 2025 with a trade balance of 88.306 billion dollars, but with a deficit for our country of 40.673 billion dollars.

A Value Market with Challenges

Canabal commented that with the modernization of the TLCUEM, Mexico will face challenges in meeting European standards.

"Europe doesn't just open its markets; Europe conditions them. Therefore, we will see stricter sanitary standards that must be met, environmental regulations, and labor requirement issues that are constantly being reviewed," he asserted.

Furthermore, Mexico is diversifying to compensate, even if only in a small or medium part, for exports not reaching the United States.

"Unlike the North American market, the European market is a value market, while the U.S. market is one of volume. A value market means it is more demanding and more regulated, but also better paid. So, while we might send many things to the United States, we won't send as much to Europe, but we will send items of higher value," Canabal explained.

Economy Secretary Marcelo Ebrard said that exports to the old continent will depend on the growth of the European Union.

"We assume our potential could increase exports by at least 30%; that is Mexico's goal," said the head of Economy.

Context: The head of the Trade Negotiations Unit of the Ministry of Economy, Deborah Alcocer, reported that the modernization of the TLCUEM, occurring in the coming weeks, includes the elimination of tariffs for more than 83% of agri-food products and the simplification of customs procedures.

A Market of 450 Million

According to the Ministry of Economy, the European market of 450 million potential consumers represents a significant space for Mexico, which currently accounts for only 0.2% of agri-food imports.

According to the agency, Mexico will strengthen its strategy to diversify its markets and increase its presence in Europe, where products like coffee, tequila, and avocado are already traded.

Since July 2000, Mexico and the European Union have had a trade agreement. In 2025, Mexico's trade balance with the European Union recorded a deficit for the country, with total exports to the bloc valued at 27.658 billion dollars.

According to the Mexican government, the European Union is currently Mexico's third-largest trading partner and second-largest investor.

$300 Billion Portfolio

Economy Secretary Marcelo Ebrard stated that in the investment portfolio of the Mexico Plan, there are already 300 billion dollars in projects for the country.

Ebrard added that a results report will be presented next week during the morning press conference.

"This is one of the investments made (a one-billion-dollar investment by Flex for an AI data center). We are on track and on time because each company tells us when the investment will take place. So, we have no cancellations; on the contrary, we have more projects every day," he highlighted.