On July 11, the First Round of Negotiations for a Free Trade Agreement of high standards between Mexico and the United Kingdom began, intending to finish the negotiations this year so that it enters into force before the modernization of the Free Trade Agreement between the European Union and Mexico (TLCUEM). The TLCUEM hasn’t been signed even though the negotiations ended in April 2020.
The Round was held in a hybrid manner from Mexico City. It will last until July 15, being chaired by Ismael Ortiz, chief negotiator of Mexico, and Charlotte Heyes, chief negotiator of the United Kingdom.
This First Round will focus on the commitments established in the Trade Continuity Agreement between Mexico and the United Kingdom, which was signed in December 2020 to maintain the free flow of goods between the parties.
The discussions of the more than 30 negotiating tables will focus on defining the conditions for access to the goods and services markets of both countries, with the participation of different agencies of the Federal Public Administration to review the issues regarding the non-tariff measures and customs cooperation, such as sanitary and phytosanitary measures, technical barriers to trade and rules of origin, in addition to other aspects related to services and investments.
According to the Ministry of Economy, the United Kingdom is the 16th largest trading partner globally. In 2021, bilateral trade reached $5,128 million ($3,032 million in exports and $2,096 million in imports), so the UK had a 0.6% share in sales and 0.4% in international purchases of our country.
The main exports of Mexico were products of the telephone (14.3%), turbojets, turboprops, and other turbines (6.2%), and data processing machines (5.8%) groups. These goods came mainly from the states of Jalisco, Mexico City, and Querétaro.
On the other hand, the most imported products were whiskey (6.7%), medicines (3.4%), and passenger cars (2.7%), destined for the states of Mexico City, Jalisco, and Nuevo León.
Likewise, the United Kingdom is the 8th investor in the country since it has contributed 2.8% of the FDI captured by Mexico since 1999, it’s an amount of $18,143.6 million from 2,115 companies. In this time-lapse, it has allocated more than a third of its accumulated FDI to commercial banking. Outside this branch, its investments in the tobacco industry and the wholesale trade of beverages, ice, and tobacco also stand out.
For 2021, it ranked 5th, with an investment of $1,807.2 million (5.7% of the total, representing an increase of more than 100% compared to 2020). In this case, 34.3% of the FDI was focused on the wholesale trade of beverages, ice, and tobacco; 21.3% on services related to mining; and 19.2% on oil and gas extraction. It went principally to the states of Tamaulipas ($218 million), Jalisco ($122 million), and Mexico City ($119 million).
Moreover, based on the Expansion 500 Ranking, the seven most important British companies in Mexico in 2022, based on their sales volume, are:
- HSBC – Financial Services
- Mexican Starches – Agroindustry (corn)
- Linde Mexico – Industrial Gas
- Evraz NA Mexico – Steel and mining
- British American Tobacco Mexico – Tobacco
- Diageo Mexico – Alcoholic beverages
- HSBC Seguros – Insurance and bonds
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