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Mexico & European Union reach new trade agreement

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The Trump Administration wanted to renegotiate the North American Free Trade Agreement (NAFTA), so we are. Agricultural producers and groups have been worried that this could make Canada and Mexico look elsewhere for trade deals. Now it appears Mexico has.

Negotiations for a “NAFTA 2.0” have been going on for months. Agriculture has benefited from the agreement and has been hoping a new agreement would do no harm. There has been political posturing from all three capitals during this process, but now it looks like Mexico and the European Union (EU) have struck a trade deal.

Politico reports that the deal would be an upgrade over a year 2000 agreement which affected machinery and basic goods. The new trade deal includes many new arenas of trade, including agriculture.

The details of the deal are still not known, as they need to be ironed out. However, one thing is certain. This move by Mexico to increase their trade deals with the EU sends a signal to Washington that Mexico City has no problems looking elsewhere to find better deals with different trading partners.

Mexico was the number three destination of United States agricultural products last year. They imported 18.6 billion dollars of our commodities according to the USDA. With ag products being a part of the new trade agreement, U.S. producers are getting the message that our exports are by no means guaranteed. It looks as though farmers are going to have to lean more on their elected officials to get NAFTA sorted out, before we lose a very good customer to the open marketplace.