UK manufacturers gain extended tariff relief in Mexico

Source:China Sport ShowRelease time:21-Nov-2023Clicks:

Article From：Fibre2Fashion

The UK has secured an extension to arrangements that were due to expire, helping British manufacturers access lower or zero tariffs when selling their products to Mexico. The arrangement will come into effect from January 1, 2024, and will remain in place until a new UK-Mexico free trade agreement enters into force.

The deal will provide welcome certainty for UK businesses, helping them to continue avoiding high tariffs imposed by Mexico and maintain their competitive edge in the market, the department for business and trade said in a press release.

Mexico is the 14th largest economy in the world and second largest in Latin America, and its demand for imports is forecast to grow by 42 per cent between 2021 and 2035 as its economy continues to grow. With a population of over 130 million people, its market is larger than France and Italy combined.

When the UK negotiated its current trade agreement with Mexico, rolled over from UK’s membership of the EU, time-restricted provisions were agreed to allow for the use of EU inputs in UK products in meeting the UK-Mexico rules of origin. The extension will apply until the entry into force of new, permanent rules as part of a new, enhanced free trade agreement with Mexico.

Protecting our integrated supply chains with longstanding trade partners like Mexico is vital for both British and Mexican businesses as we continue to see supply chain disruption impact the global economy. This extension will therefore benefit businesses in both countries.

The UK and Mexico launched negotiations on the new deal in May 2022. The deal is intended to replace UK’s existing, outdated trade deal which was agreed over 20 years ago and boost its £6.2 billion trading relationship.

The news comes as International Trade Weeks comes to a close. Businesses from across the UK participated in over 170 events and activities across the week aimed at supporting them sell internationally for the first time.

“Ensuring UK goods avoid higher tariffs is essential for British businesses to stay competitive in this huge and dynamic market of over 130 million people. This extension will provide UK businesses exporting to Mexico with certainty as they plan for next year and beyond while the UK and Mexico negotiate an exciting new trade deal covering the 21st century economy,” said minister for industry and economic security Nusrat Ghani.