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date: 22 February 2020

Mexico and the European Union

Summary and Keywords

The EU–Mexico relationship is symbolic of how a determined commitment to cooperation can lead to enduring partnerships between disparate and geographically distant states. The EU and Mexico have gradually institutionalized several frameworks for cooperation through a series of internationally significant agreements. In spite of major asymmetries in their levels of political, social, and economic development, the EU and Mexico have continually formalized their commitment to cooperation: both parties signed the Economic Partnership, Political Coordination and Cooperation Agreement (GA) in 1997 (in force since 2000), the Strategic Partnership (SP) in 2008, and modernization of the GA in 2018. Although the EU and Mexico have had relations since the 1970s, the first two decades of the 21st century have witnessed an intense alignment of policy goals in a variety of economic, political, and social areas, leading to the acceleration of mutual commitments and cooperation between seemingly unlikely partners.

The implementation of the 2000 GA has been successful on several fronts: trade expanded, trust grew, and the European investment flow to Mexico increased with few interruptions. Therefore, it was not a lack of success that motivated the GA modernization process, but external global transformations and a relationship that had outgrown its defining framework. External global transformations—such as the rapid technological revolution, the subtly shifting international balance of power, and the degradation of the neoliberal economic model—required a more responsive agreement with updated legal frameworks. Further, the limitations of the original GA with respect to trade and economic imperatives required the inclusion of several new articles to address the expanded digital and service-based economies. With respect to political coordination and cooperation, the revised GA incorporated more disciplines into the formal High-Level Dialogues, and addressed a broadened international agenda increasingly focused on regulation, sustainability, and environmental concerns. While the EU–Mexico relationship is characterized by an entrenched belief in institutionalized, regular, and productive cooperation mechanisms, both parties agreed to modernize the GA in the late 2010s. The decades-long commitment to this ethos, despite their highly disparate starting point, is poised to promote several more decades of cooperation with the conclusion of the modernized Agreement in 2018.

Keywords: EU external relations, Strategic Partnership, Mexico, trade, Global Agreement, foreign direct investment (FDI), EU–Latin American relations, European Union politics

Introduction

The bilateral relationship between the European Union (EU) and Mexico has adapted to the changing circumstances of the international system. Despite extensive asymmetries, geographical distance, and a low level of interdependence, the EU–Mexico relationship has continued to deepen. Although relations between the EU and Mexico have existed practically since the inception of the European Economic Community (EEC), it was not until the mid-1990s that both parties agreed to a pioneer mechanism for economic partnership, political collaboration, and cooperation. The end of the Cold War, the triumph of liberalism, and the intensification of globalization ushered in a new era of international cooperation largely defined by free trade agreements (FTAs). Experiencing political consolidation with the completion of the 1993 Maastricht Treaty, the EU sought to expand its reach through trade and cooperation outside of the continent. Transformations within Mexico placed it on a new path to economic and political development, and by 1997 the EU and Mexico had concluded the first-of-its-kind Global Agreement (GA). With a mandate to institutionalize political dialogue, enhance trade and economic relations, and deepen cooperation, the GA stamped the next two decades of an EU–Mexico relationship characterized by an entrenched belief in institutionalized, regular, and productive cooperation mechanisms.

The GA led to substantial increases in trade volume, effective High-Level Dialogues (HLDs) in several areas, and political cooperation, helping to solidify democracy in Mexico and providing the EU with credibility as a long-term ally in Latin America. In 2008 Mexico became the second EU Strategic Partner (SP) in Latin America, signaling another important step in their relationship. However, for all its successes the GA had limitations. By the mid-2010s the international order again began to undergo considerable shifts. The rise of China in global trade, the technological revolution, and questions about the durability of U.S. global leadership led the EU and Mexico to negotiate a modernized GA. Seeking economic differentiation and the opportunity to exert their positions—the EU as the preeminent beacon for global free trade and liberal values, and Mexico as an emerging player, independent from U.S. hegemony, in the international order—both parties agreed to a modernized GA in 2018.

This article will examine six significant points in the EU–Mexico relationship. First, it will offer a survey of the literature seeking to explain the seemingly unlikely EU–Mexico partnership, followed by a historical review of the bilateral relationship leading up to the GA. Third, it will review the frameworks underlying the GA and the subsequent Strategic Partnership. Finally, the remaining three sections will address the success of the GA in terms of trade and investment; advancing political dialogue and social cooperation; and the impetuses for the modernization of the GA and some of its unique details.

Explaining the EU–Mexican Relationship

One of the puzzling features of the EU–Mexico partnership that has been explored over the years is how to study a relationship defined by asymmetry, geographic distance, and the outsized influence of the United States. Adding to the curious nature of the relationship is their low level of interdependence: the EU represents 8.8% of the total share of trade in Mexico, while Mexico represents only 1.7% of the EU’s total trade as its 11th-largest trading partner (DG Trade, 2018). Unlike the prolific scholarship addressing the theoretical debates and interpretations of EU external relations in geographical areas where there is a significant level of interdependence, such as relations with Russia or the United States, the literature regarding EU–Mexican relations has been more empirical and policy driven. Much of the emphasis rests on explaining why the EU and Mexico continue to converge in policy goals despite their often dichotomous capacities and actions toward providing improved living standards to their citizens. However, within the existing literature four interrelated trends emerge that are capable of summarizing the rationale for the continued, and expanding, relationship between the EU and Mexico.

First, the dominant role of the United States has incentivized the Mexican government to strengthen the relationship with the EU. Particularly in the early 1990s, and in light of the North American Free Trade Agreement (NAFTA) negotiations, the argument for the diversification of Mexican foreign policy was a central explanation embraced by the literature about EU–Mexican relations. By the mid-2000s, while this thesis was still prevailing, questions surfaced regarding whether the goal of diversification was achievable due to its reduced economic impact. Several authors (Chanona, 2008; Peña Guerrero, 2008) argued that the tangible impact of seeking alternative markets was limited because domestic economic actors were not ready to compete in the new environment generated by the implementation of the new FTAs. In the context of the mid-2000s, Casas Gragea (2007) indicated that the impact of the Global Agreement was quite limited, considering that the EU’s share of total Mexican trade fell from 9% in 1993 to 7% in 2004 (Casas Gragea, 2007). The diversification thesis has again gained traction after the 2016 election in the United States. In light of the Trump administration’s contestation of NAFTA and rejection of Mexican migration, the EU reappears as an obligatory point of reference for Mexico’s intentions to broaden its external relations (Ruano, 2018a).

A second trend in the literature highlights the role of the institutionalization of the EU–Mexican relationship through formal legal frameworks such as the GA and informal norms and practices that will produce two main outcomes: (a) higher levels of cooperation in the EU–Mexican relationship; and (b) a fulcrum for reinforcing the modernization process of the Mexican political system, the liberalization of the economy, and the strengthening of social inclusion and democratic governance (Dominguez, 2008; Peña Guerrero, 2008). In other words, strong relations with the EU could ensure a reliable ally in the process of establishing the international position of Mexico (Oberda Monkiewicz, 2017) as a democratic, economically reliant dependable, and productive country with significance beyond the EU–Mexican relationship.

A third complementary trend focuses on neoliberal institutionalist perspectives and the absolute gains approach. In this regard, the EU–Mexico relationship can be considered an exemplar of the absolute gains approach, where both parties have pursued differentiated interests that do not necessarily collide nor compete, as opposed to the relative gains approach where one party wins and the other loses (Dominguez, 2003). Consistent with this approach, when a conflict of perspectives emerges, it can be remedied through bilateral negotiation. In other words, as Espana Arrieta (2007) argues, the overarching Mexican interest in the GA is mostly economic and focused on attracting European investment and increasing levels of trade, while the dominant EU interest is political and strategic in light of the institutional goals of EU external relations. From the EU perspective, the economic rationale is very much driven by supporting regulatory development and good institutional governance in Mexico for European investment. Hence, while EU–Mexican negotiations are often marked by differences and tensions, reaching common ground is attainable because both parties seek differentiated goals whereby logistical and strategic disputes are relatively manageable. This explanation is supported by the bilateral evolution of their relationship, increased share of trade and investment, as well as (acceptance of) EU insistence on including mechanisms for political cooperation in the GA.

The fourth trend of the literature stresses the relevance of Mexico as an integral piece in the EU strategy towards Latin America (Chanona, 2008). For Europe, Mexico has become more important, not only due to the size of its economy and its relevance as the second-largest EU trade partner in Latin America, but also because Mexico shares the EU vision in favor of free trade and the multilateral rules-based system of the World Trade Organization (WTO) at a moment when this vision is being strongly questioned by the United States (Ruano, 2018a). The stability in the bilateral views and commitments to liberal rules and norms has been tested beyond the different orientations of the political parties in charge of federal governments in Mexico since the early 1990s, including the administration of President Andrés Manuel López Obrador (2018–2024).

Towards a Global Agreement

During the 1970s the relationship between Mexico and the European Economic Community was mostly defined by bilateral connections with individual European countries. It was not until 1975 that the first EEC–Mexico agreement was signed. The 1975 Initial Cooperation Agreement (also known as the First Frame Agreement) was the beginning of the EU–Mexico bilateral relationship, granting Mexico (not yet a General Agreement on Tariffs and Trade—GATT—member) most favored nation status with the EEC (De Luna Barrios, 2016). From the second half of the 1980s to the early 1990s, EEC–Mexico relations benefited from a new positive momentum in which numerous correlated processes converged in Latin America and Europe. In the former, democratization became a trend, regionalization re-emerged, and civil wars in Central America ended. In Europe, Spain and Portugal became members of the EEC and the Single European Act deepened the integration process, which produced further institutionalization of the external relations of the soon-to-be European Union. It was against this backdrop that the EEC opened its delegation in Mexico in 1989 and the 1975 First Frame Agreement was replaced by a Framework Agreement in 1991, which broadened the range of bilateral cooperation (European Commission, 1997).

The rapid political and economic changes of the early 1990s—the collapse of the Soviet Union and the emergence of global free trade ideology—ushered in a new impetus for improved economic and political ties. With the Maastricht Treaty in effect, and a consolidated European Union signaling an interest in achieving a truly global presence, the EU and Mexico signed the Solemn Joint Declaration (also known as the Paris Declaration) in Paris in 1995. This declaration established an update to the 1991 framework, but also paved the way for formal negotiations, ultimately leading to the GA of 2000. The 1995 Paris round was significant for two reasons: first, it marked the intent to deepen ties between the two parties with much greater significance, and second, it was the first time the three-pillar objectives, which came to define the subsequent GA, were sketched.

Five main incentives advanced the negotiations of the EU–Mexico GA. First, the end of the Cold War was a transformational historic event that produced a debate regarding the most conducive models for economic growth in general, and the global and regional trade models, which led to the proliferation of FTAs around the world. Second, the creation of the WTO was emblematic of the direction of the global trade system. Third, the prospects and eventual implementation of NAFTA produced uncertainty in the EU and hence motivated European economic and political actors to reduce potential losses due to NAFTA. Internal transformations in Europe and Mexico also strengthened the impetus to negotiate a GA, which are the fourth and fifth incentives. As Torrent and Polanco (2016) indicate, the European Commission, either on its own or jointly with its Member States, developed a strategy to negotiate bilateral agreements with several countries and regions in the world, including Latin America. There was growing consensus within the EU Member States to provide more structured and coherent EU external relations in light of the geopolitical transformations of the early 1990s, and to move forward the European Commission’s initiative to negotiate a new round of agreements with Latin America, first with MERCOSUR as a whole, and then with Chile and Mexico.

Regarding domestic factors in Mexico, the incentive for negotiating the GA was embedded in a larger domestic structural transformation. Mexico maintained a strong protectionist trade policy model throughout the 1970s and early 1980s in an effort to be independent of any foreign power, and as a means to promote domestic-led industrialization. The administration of Miguel de la Madrid Hurtado (1982–1988) faced the exigency of this model when Mexico was on the verge of economic collapse as a result of the debt crisis. In 1986, Mexico shifted the model and acceded to the GATT, assuring further liberalization measures. The administration of Carlos Salinas de Gortari (1988–1994) embraced the economic liberalization emblematic of the open regionalism model, in which the central principles were opening new markets for Mexican products, attracting foreign investment (Villarreal, 2017), and deepening the process of economic modernization and trade liberalization (Zabludovsky & Lora, 2005).

The Framework of the Relationship: The GA and the SP

Although the 1995 Paris Declaration outlined an ambitious plan to intensify EU–Mexico relations, such determination quickly turned into complex dialogue. After the Council of the EU adopted the directive of negotiation for a new agreement in June 1996, negotiations began and although they were not highly contentious, they were complicated. Framed in a context where the global order was facing deep transformations mired in uncertainties, both parties considered in their calculations, among other elements, the best strategies for inserting themselves in the new wave of globalization. Of principal concern was how to deal with the incipient proliferation of free trade agreements and the indirect and direct role of the United States in the world economy, specifically with regards to its relations with Mexico and Europe. These simultaneous processes were in many respects new to both the EU and Mexico, and for the EU particularly because it was the first transatlantic GA, which entailed greater challenges than any prior FTA.

The Mexican acceptance of the Democratic Clause, at the insistence of the EU, produced several disagreements in the initial stages of the negotiation. While there is some controversy about why Mexico ultimately agreed to accept the democracy clause, three elements seemed to converge: first, the understanding that negotiations with the EU were quite different from those with the United States and hence it was the only feasible way to overcome a deadlock in the negotiations with the EU; second, the ongoing modernization of the Mexican political system; and third, the acceptance of democratic standards as a compulsory norm in international negotiations. Thus, Mexico accepted the Democratic Clause in April 1996, immediately after the VII Ministerial Meeting between the EU–Rio Group in Noordwijk, Netherlands. In October 1996 the EU and Mexico restarted negotiations, and after several months an Interim Agreement was reached wherein the two parties confirmed the three pillars of the relationship and began trading in goods according to the agreed-upon reduced tariff schedules. The three pillars defining the GA are (a) institutionalizing high-level political dialogue, (b) deepening cooperation, and (c) growing trade and economic relations through preferential and bilateral liberalization. The Interim Agreement allowed for trade in goods to enter into force in July 1998, but it would take an additional three years to move from the Interim Agreement to full entry into force of the Global Agreement (Whitehead, 1997).

The EU and Mexico signed the Economic, Political and Co-operation Agreement (Global Agreement) in Brussels in December 1997. On July 14, 1998, a Joint Council of the Interim Agreement was created and negotiations towards a free trade agreement were initiated. From November 1998 to November 1999 nine rounds of negotiations were held. Negotiations towards the Mexico–EU free trade agreement concluded on November 24, 1999 (Lamy & Blanco, 1999). The GA was approved by the European Parliament in May 1999 and by the EU Council in September 2000. The Mexican Senate approved the GA in March 2000. The GA officially entered into force in October 2000, although it was implemented in two phases.

The trade in goods portion entered into force on October 1, 2000, with the liberalization of services and investment as well as cooperation in the intellectual property domain to follow on March 1, 2001, after Decision 2/2001 of the EU–Mexico Joint Council. The bulk of the agreement is dedicated to specifying the 30 agreed-upon areas for cooperation: 20 areas of economic concern, and 10 sociopolitical considerations. Importantly, the first three Articles of the GA emphasize non-economic principles. Article 1 represents the democracy clause, stressing democracy and human rights as an “essential element” in the GA. Articles 2 and 3 affirm the need for both parties to institutionalize political dialogue and adhere to Joint Council decisions, respectively.

In contrast to NAFTA, one of the important innovations of the GA is the creation of regular dialogues through institutions: the Joint Council, the Joint Committee, and other appointed Special Committees. The role of the Joint Council is unique in this respect, as it is not only an integral part of the framework for monitoring and supervising GA implementations, but also the primary party responsible for its negotiation (Ecorys, 2015). Established as the governing body by the Interim Agreement in 1997, the Joint Council was expressly created to bypass the EU bureaucracy and negotiate the remaining trade issues between the EU and Mexico before full adoption of the GA. After the GA entered into force, the Joint Council maintained its unique powers to arbitrate and negotiate trade matters related to tariff reduction schedules, non-tariff matters, and arrangements for liberalizing services (Text Articles 5–13). Additionally, the Joint Council is responsible for enforcing the timelines established to conclude agenda items. The Joint Council’s broad responsibility is evidenced by its 17 decisions between 2001 and 2010, of which Decision 2/2001 included the mandate to establish a dispute resolution mechanism. Joint Council decisions are binding, and enter into force immediately. Members of the Joint Council are Members of the Council of the European Union and Members of the European Commission, and requisitely, Members of the Government of Mexico (ministerial level). Another significant role of the Joint Council is related to the fulfillment of obligations. Based on Article 58 of the GA, in case one of the parties considers the other is not fulfilling its obligations, except in cases of special urgency, the complaining party must supply the Joint Council with all relevant information for examination with a view of seeking a resolution acceptable to all parties. If the complaining party decides to move forward with taking the appropriate measures, they must be in accordance to international law. In cases of special urgency, which are related to material breach of Article 1 of the GA (respect for democratic principles and fundamental rights) or repudiation of the GA not sanctioned by international law, one of the parties may take the appropriate measures directly and the other party may request an urgent meeting within 15 days.

The GA allows the Joint Council to establish the Joint Committee, a subcommittee of the Joint Council directed to assist the Joint Council in any and all matters delegated by the governing body per Article 48. The Joint Committee consists of representatives of the Joint Council, representatives of the members of the Council of the European Union and of the European Commission, and representatives of the Government of Mexico (Oberda Monkiewicz, 2017). The Joint Committee held four meetings between 2002 and 2010, all of which were organized to clarify Joint Council Decision 2/2000 regarding the definition of “originating products” and methods of administrative cooperation (Ecorys, 2015).

The implementation of the GA opened numerous new avenues of cooperation between the European Union and Mexico. While the GA is one of the most developed and comprehensive mechanisms of EU foreign policy, the relationship between Mexico and the European Union was reinforced with the negotiation of the bilateral Strategic Partnership. In contrast to the GA, the SP is an EU instrument designed to deepen cooperation with key partners in efforts to ensure the values and interests of the EU are preserved at the global level (Cîrlig, 2012). In 2008 Mexico became the second country in Latin America, after Brazil, to become a Strategic Partner of the EU. While the main framework of the economic, political, and cooperation relationship is based on the GA, the SP has enhanced bilateral dialogue. In order to guide the EU–Mexico relationship, the SP Joint Executive Plan indicates that both parties agree to work together on issues of common interest at the bilateral, regional, and multilateral levels on global issues of common interest. Illustrative of the need to avoid duplication, the SP Joint Executive Plan also indicates that the SP will use the institutional structure of the GA to promote bilateral dialogue rather than producing new structures (Council of the European Union, 2010). All in all, the GA and the SP have converged as frameworks for conducting and expanding the EU–Mexico relationship.

Trade and Investment

The GA has increased the volume of trade and offered the EU and Mexico an instrument to deal with regional and global transformations. Yet the pace of bilateral trade growth has slowed in the 2010s due to a combination of numerous factors: the slow economic growth in Mexico and the EU after the 2008 “Great Recession”; the stalemate in the WTO global negotiations (specifically the Doha Round); the increasing trend of economic populism in the United States and some EU Member States, resulting in the contestation of market liberalization; and the dominant presence of China in the global economy.

Despite these external forces, trade relations have grown more than 300% since the EU–Mexico FTA was established in 2000, with bilateral trade reaching a record €61.8 billion in 2017, and trade volume growing each year since 2014. The EU represented 8.8% of Mexico’s total trade in 2017 and was its third-largest trade partner, after the United States (62.3%) and China (10%). From the European perspective, Mexico was the 12th-largest trade partner of the EU and represented only 1.7% of its total trade. The trade balance has been consistently in favor of the European Union—between €7.1 billion in 2003 and €14.1 billion in 2017. In the case of services, EU exports amounted to €9.8 billion and imports to €5 billion in 2016 (DG Trade, 2018).

Mexico’s largest exports to the EU (in value) are machinery and transport equipment (automotive products and office and telecommunications equipment, combined €8.1 billion) and petroleum products (€3.4 billion). The EU’s largest exports to Mexico are machinery and transport equipment (€19.9 billion) and chemicals (€6.2 billion). Agriculture and fisheries products received considerable attention during the negotiation of the GA, despite trade in this sector only totaling €2.8 billion (DG Trade, 2018). The balance of trade in the agricultural sector between the two parties has oscillated, with Mexico achieving a slight advantage since 2014. Agriculture also achieves the most parity of any sector. The GA provided a 10-year window after which all tariffs on agri-food products were to be eliminated. In 1999 only 8% of EU agri-food products could enter Mexico free of tariffs; by 2009 the percentage had climbed to 64% (Copenhagen Economics, 2016).

While foreign direct investment (FDI) benefits the investor and the recipient, the flow of FDI is significantly higher from the EU to Mexico than in the reverse direction. From this perspective, as often occurs with FTAs, one of the expectations is that the flow of FDI from the more to the less developed economy will produce jobs and contribute to increased living standards. This premise also applies to the case of EU FDI flows to Mexico. In 2016 total accumulated FDI between Mexico and the EU was nearly €180 billion, with the balance heavily in favor of Mexico: €143 billion flowed to Mexico, primarily directed to manufacturing, transportation, and construction, followed by the retail/wholesale trade and financial services (European Commission, 2018b). The EU is the second-largest investor in Mexico in a variety of sectors and represents around 37% of total FDI in Mexico. For example, German companies employ more than 120,000 people in Mexico. German carmakers such as Audi, BMW, Daimler, and Volkswagen continue to invest billions of euros in opening factories in Mexico, which generates thousands of jobs for skilled workers (Konrad, 2015). In 2015, the largest European investors in Mexico were Spain, Germany, Belgium, Italy, and France (Mexican Representation to the EU, 2017).

Political Coordination and Cooperation

The GA and the SP have institutionalized practices of permanent communication and mutual commitment to good governance between the EU and Mexico. Informal and formal mechanisms allow for monitoring policies, exchanging experiences, and adapting diplomatic and cooperation instruments to the evolving challenges of the bilateral relationship. In response to significant political and economic events, the EU has produced numerous statements and declarations regarding political developments in Mexico. With firm and balanced diplomatic language, the EU has combined the acknowledgment of progress in the performance of political governance on the one hand, with concern about practices that erode human rights and rule of law in Mexico on the other. From Brussels, the EU has issued declarations supporting the achievements of the Mexican government, such as the efforts of President Vicente Fox (2000–2006) to ensure greater public accountability with the ratification of the Rome Statute in 2005, and the abolishment of the death penalty in 2006, yet the EU regularly dispatches election observers to monitor Mexican elections. Again in 2018, Brussels employed balance to address the concomitant elections and human rights issues in Mexico. On the one hand, the widespread participation in the 2018 presidential election was applauded, but on the other hand the EU defined the violent political climate leading up to the elections as a serious problem, while simultaneously pledging the full support of the EU to assist in addressing these issues, and further promoting human rights and the rule of law (EEAS Press Team, 2018).

The EU delegation in Mexico, jointly with Norway and Switzerland, has closely monitored daily events in Mexico and has issued various declarations on a regular basis. In contrast to most of the statements dated in Brussels, which were focused on major political events, declarations dated in Mexico City and issued by the EU Delegation have paid particular attention to problems related to human rights. For example, between September and December 2018, the EU delegation issued four local declarations condemning the assassinations of journalists and human rights activists (Delegation of the EU to Mexico, 2018).

From a long-term perspective, Mexico and the European Union have created a high-level political dialogue and eight sectoral dialogues on climate change, the environment, macroeconomic issues, human rights, security and justice, higher education, the digital agenda, and energy. The high-level political dialogue is the most important type of dialogue featured in the SP, and as of 2018, it had convened five times. These meetings, attended by high-ranking officials from both parties, at the level of deputy minister (Mexico) and secretary general (EU), exist to review the most significant aspects of the bilateral agenda (Secretary of External Relations, 2018a). International and regional issues have also been examined in the political dialogue, including exchanges of views about Iran, Syria, the situation in the Middle East, relations with Strategic Partners, and the EU’s and Mexico’s regional contexts.

Each sectoral dialogue is significant in its own capacity, but some are more visible due to immediate social needs, and the difficulty—particularly for the Mexican government—in raising the levels of performance and effectiveness of existing oversight frameworks. The High-Level Dialogue (HLD) on Human Rights, and the HLD on Security and Law Enforcement, are two examples of sectoral dialogues where Mexico has struggled to make significant progress. Human rights have been an important and sensitive item on the bilateral agenda for several years. EU annual reports on human rights consistently indicate that Mexico faces considerable challenges in the areas of security and human rights, in spite of substantial efforts made to further strengthen the country’s legislative framework (EEAS, 2017a). These challenges include cases of torture, forced disappearances, extrajudicial killings, threats and attacks against high-ranking diplomats and journalists, femicides, high levels of impunity and corruption, and infiltration of state institutions by organized crime (EEAS, 2017b). Structural deficiencies in the justice system are unable to lessen impunity, and Mexico ranks among the countries with the highest levels of impunity according to the 2017 Global Impunity Index (IGI) (Le Clercq Ortega & Rodríguez Sánchez Lara, 2017). The observation of human rights in the EU–Mexico agenda was a priority area even before the implementation of the GA. As of 2018, the HLD on Human Rights has held eight annual meetings (EEAS, 2018).

Another important dialogue is the HLD on Security and Law Enforcement, which was held for the first time in 2011, within the context of increasing levels of violence in Mexico. During her visit to Mexico in May 2016, Federica Mogherini, High Representative of the Union for Foreign Affairs and Security Policy, and Vice-President of the EC, attended the second HLD on Security and Justice. Her visit was emblematic because it revealed that security and law enforcement is one of the most important areas of the bilateral relationship. Her remarks during the meeting, while acknowledging the progress made in Mexico, were firm regarding the shared security concerns and the urgency to work together in the area with potential for further cooperation (Delegation of the EU to Mexico, 2016).

Cooperation in development is the third pillar of the GA, and has been a very dynamic area of the EU–Mexico agenda. Two important transformations have reshaped bilateral cooperation in development. First, transformations in the EU development policy produced a differentiated approach where countries achieving middle-income country status would no longer be eligible for EU bilateral aid, only regional and thematic aid. Thus, given Mexico’s status as a graduated country, the EU development partnership with Mexico for 2014–2020 no longer includes EU bilateral funds. Second, since the early 2000s Mexico has strengthened its dual nature as recipient and provider of development cooperation through the institutionalization of this approach with the creation of the Mexican Agency for International Cooperation for Development (AMEXCID).

Mexico has not been eligible for bilateral assistance since 2014. However, the main bilateral program under the 2007–2013 EU Country Strategy for Mexico was signed in November 2013 (Social Cohesion Lab, phase II), and maintained activities with 26 key institutions in Mexico until 2018. Moreover, Mexico will remain eligible to receive funding from several EU programs/instruments, such as the Development Cooperation Instrument (DCI), and thematic programs, such as the Partnership Instrument (PI) and the European Instrument for Democracy and Human Rights (EIDHR). These programs are all continental programs for Latin America and external components of internal EU instruments (European Commission, 2018a). As of 2018, the overall Mexico development cooperation portfolio represents some €100 million in grants, leveraging an additional €40 million from Mexican institutions and close to €1 billion in development bank loans. Ongoing bilateral programs include actions co-financed by Mexican institutions (coordinated by AMEXCID) in the field of social cohesion (€42 million), economic innovation and competitiveness (€18 million), and culture (€5.6 million) (European Commission, 2018a).

As a result of the bilateral convergence of approaches to cooperation in development, the EU and Mexico started sharing best practices, knowledge, and expertise to strengthen capabilities in developing countries—particularly in Central America and the Caribbean. In December 2018, Mexican President Andres Manuel Lopez Obrador (2018–2024) presented “The Plan for Comprehensive Development to Central America,” for which the EU Ambassador to Mexico expressed support and indicated the EU would seek to align its programs in the region in order to contribute to the Mexican President’s initiative (Secretary of External Relations, 2018b).

The Modernization of the GA

The EU and Mexico decided to explore the possibilities for a comprehensive update to their GA, and in particular its trade pillar, in the context of the first CELAC–EU Summit in Santiago de Chile, in 2013. The modernization of the GA is significant because it reflects the political will of the EU and Mexico to provide an updated legal framework for areas of common interest that (a) were not included in the GA, (b) were contemplated in a limited way, and (c) needed to be adapted to internal transformations in Mexico, the EU, and the international arena (Del Río & Saavedra Cinta, 2018).

The global factors inspiring EU–Mexico plans for modernizing the GA range from the urgent, such as the revolution in digital technology, to the subtle, such as shifts in the international balance of power. The norm-based liberal international order established by the United States, which is being challenged by populist politics and trade policies, and the rising influence of China’s economic expansion represent two of the most important incentives for the EU and Mexico to forge a common front (Ruano, 2018b). Additionally, transformations in international value chains, where both trade and FDI are increasingly important, were a significant factor in revisiting the EU–Mexico mechanisms for investment protection, regulatory cooperation, and sustainable development, among others (Del Río & Saavedra Cinta, 2018). Another incentive for the modernization of the GA was the legal and technical innovations of other trade agreements that the EU and Mexico concluded after 2000, such as the EU agreements with Canada, Japan, Singapore, Australia, and Vietnam, or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) of which Mexico is a member.

After preparatory work was completed, formal negotiations to modernize the GA were launched in May 2016, ending in April 2018. Negotiations were expected to be completed within a year, however nine rounds were required to address the main areas of discussion (Rodríguez-Piñero Fernández, 2018). Similar to the negotiation process of the original GA, the modern rounds were complicated, but not highly contentious: 40 negotiation proposals were submitted by the EU (Harte, 2018), with disputes arising in a variety of areas—Members of the European Parliament and civil society organizations repeatedly expressed their concern for Mexico’s ability to respect human rights and deter the rising impunity related to drugs and migration.

While some areas of the EU–Mexico relationship have gradually adapted to the changing circumstances of the international arena, a few areas of the GA framework needed formal updates. The modernized Agreement will be more capable of adjusting to these new circumstances not only because of its focus on political, economic, and cooperation areas, but also due to the inclusion of new policies and mechanisms of cooperation such as the SP, the establishment of the Joint Parliamentary Committee (EU–Mexico JPC), the continually expanding scope of HLDs (Dominguez, 2014), and the adoption of the Investment Tribunal System (European Commission, 2018c).

The general spirit of the modernization effort in terms of trade was achieving the highest level of liberalization possible and securing better rules for all (Harte, 2018). To that end, the modernized Agreement updated the 11 existing disciplines in the GA, and added the following eight additional items: (a) anti-corruption; (b) transparency; (c) trade and sustainable development; (d) technical barriers to trade; (e) trade remedies; (f) small and medium enterprises (SMEs); (g) animal welfare and antimicrobial resistance; and (h) energy and raw materials (Ecorys, 2015). Disciplines (a)–(c) are topics that have crossed over from the EU–Mexico cooperation agenda under the GA to become formal institutionalized disciplines under the modernized Agreement. Items (d)–(f) are examples of where the GA was insufficient to enhance trade, and items (g) and (h) represent shifts in global realities at the end of the 2010s requiring international accord.

The modernization of the trade pillar needed to reflect transformations in three areas: trade policy, contemporary EU and Mexican priorities, and limitations of the 2000 Agreement. The realities of the new trade agenda required the modernized Agreement to address non-tariff barriers (NTBs), sustainability issues, growth in financial services, and e-commerce, among other items (Ruano, 2018b). In addition to adding NTBs and sustainability topics to the disciplines covered, the modernized Agreement dedicated six chapters to address trade in services, including a chapter on digital trade (Rodríguez-Piñero Fernández, 2018).

Among other innovations in the area of trade, the new Agreement would remove customs duties on trade in goods, resulting in the eventual liberalization of 99% of tariff lines (including full liberalization of trade in industrial goods). In the area of agricultural goods, more than 85% of tariff lines would be fully liberalized, while certain sensitive sectors (such as dairy and meat) would remain subject to specific restrictions (including quotas and tariff rate quotas). The modernized Agreement would also protect an additional 340 European Geographical Indications in Mexico (Bosse and Korosteleva-Polglase, 2009). In addition, it includes chapters on rules of origin (including for cars), trade facilitation, trade remedies, technical barriers to trade, and sanitary and phytosanitary rules. On services, the modernized Agreement would make it easier for EU firms to do business in Mexico (including in the maritime transport, telecommunications, and financial sectors), while protecting the rights of both parties. In further attempts to enhance transparency and consistency, the modernized Agreement included the EU’s new Investment Court System (ICS), together with provisions to encourage and protect investment. On public procurement, which represents new opportunities for business and investments, Mexico committed to entering into negotiations with its states to offer greater access for EU bidders.

The modernized Agreement would also include chapters on dispute settlement, corruption, trade and sustainable development (TSD), transparency, energy and raw materials, small- and medium-sized enterprises, subsidies, competition, good regulatory practices, animal welfare and antimicrobial resistance, as well as annexes on motor vehicles and wine and spirits. Lastly, the modernized Agreement would include a review clause on the need to include provisions on the free flow of data. A Commission Impact Assessment determined that a comprehensive and ambitious modernized Agreement could increase EU GDP by 0.01% per annum by 2028, as well as render improvements in social and environmental standards (Rodríguez-Piñero Fernández, 2018).

Following the structure of the 2000 GA, the modernized 2018 GA retained the pillars of Political Coordination and Cooperation. With regard to modernizing the Political Coordination pillar, three existing elements have now been fully incorporated into the revised agreement: (a) the bi-annual summits of heads of state and government—designed to be the top political structure responsible for managing the most important aspects of the common agenda and to project both sides as Strategic Partners in the global arena; (b) the annual inter-parliamentary meetings (the Mixed Parliamentary Commission EU–Mexican Congress), which have met uninterruptedly since 2005; and (c) the dialogue with civil society organizations (Ruano, 2018b). With respect to the Cooperation pillar, Mexico and the EU have experienced convergence in positions on multiple issues on the international agenda, including sustainable development (in other areas not specifically related to trade); combatting corruption; agreements on fisheries, forestry, and biodiversity; labor rights; preventing a race to the bottom; and an expanded human rights agenda addressing justice and security. Their talks also focused on the possibilities of expanding bilateral cooperation in research and development, especially in renewable energy, and on tools to facilitate mobility and academic cooperation between Mexico and the EU. The finalized GA had entered into the technical legal review in 2018 and is expected move to the ratification stage in the second half of 2019, will which will last several months because it is a mixed agreement requiring approval at both the EU institutions and Member State levels as well as the approval of the Mexican Senate (Rodríguez-Piñero Fernández, 2018).

Final Considerations

The evolution of the relationship between the EU and Mexico is significant, particularly in the context of EU external relations, because it showcases institutional resilience in the face of international transformations. The adoption of the GA, the SP, and the negotiations to modernize the GA are three institutional milestones in the bilateral relationship. The modernization of the GA is the capstone of 40 years of EU–Mexico relations, which have experienced an intense acceleration since the early 2000s. The entry into force of the GA in 2000 marked a turning point in the relationship. Despite great differences in economic and political development, the EU and Mexico inked one of the most comprehensive bilateral agreements of its time. More than just a trade agreement, the GA unwittingly set the EU and Mexico on a path toward institutional convergence of good governance practices. Although negotiations for the initial GA, and the modernized version, were long and at times complex, shifting international paradigms compelled both the EU and Mexico toward compromise and agreement. Internal transformations also strengthened their partnership. While Mexico experienced democratic consolidation and adopted the liberalized trade model, the EU expanded its membership and updated its external relations policies, leading to the SP in 2008. The initial GA institutionalized frameworks across trade, political dialogue, and cooperation, while the SP reaffirmed the principles of the EU–Mexico relationship and expanded cooperation areas to include Latin America. Although asymmetries in economic and political development still exist, the modernized GA is reinvigorating EU–Mexico relations at a time when the liberal global order is being challenged, and the leadership role of the United States is being questioned. With the new GA consolidating and extending the institutional frameworks that have allowed for the decades-long durability of their relationship, the EU and Mexico are well poised to endure the challenges of contemporary international relations.

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