The UK could benefit from the “massive market potential” of trade with Mexico if a new trade deal can be agreed.
Marco Forgione, director general of the Institute of Export & International Trade, told the Daily Express that “the UK is in a prime position to agree a really superb trade agreement”.
A recently completed first round of trade negotiations with Mexico could pave the way to a deal that boosts the £4 billion trading relationship between the two countries and open up a market whose population is estimated to grow to almost 150 million people by 2035.
Dynamic and progressive
Forgione added: “There is an immediate benefit in encouraging greater trade between Mexico and the UK.
“Whatever people’s views historically of Mexico are, it is an incredibly dynamic and progressive economy with a high-skilled, developing labour force, particularly in high-value manufacturing. It is a significantly growing economy. By 2050 the expectation is it will be the fifth largest economy in the world.”
He called for chapters on small and medium enterprises to be written into agreements, and for the government to do more to support efforts providing advice and guidance.
The government launched negotiations for a ‘Mexico 2.0 deal’ in May this year. As well as seeking to transform the relationship with the world's 16th largest economy, a deal would also complement the UK’s negotiations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade bloc, it said.
Mexico is a member of the 11-nation trading bloc, along with Chile, Japan, Malaysia, and Australia.
Trade secretary Anne-Marie Trevelyan previously told the FT that the government was hoping to conclude negotiations with the bloc before the end of 2022.
‘Diversification of supply routes’
Mexico is the top market for British whisky imports in Latin America, according to specialist website JustDrinks. The UK also exports power machinery, road vehicles, medical and pharma products as well as services.
According to Politico, Mexico specialises in developing vehicle parts, and the deal could be part of a strategy to turn the UK a powerhouse for electric car manufacturing post-Brexit.
Forgione said Mexico’s diverse and growing economy is moving up the value and supply chains in key sectors.
“If we’re looking at diversification of supply routes and supply chains for UK businesses, it’s a fantastic addition,” he said.
More deals needed
The head of the CBI, Tony Danker, has warned that supply chains could be at risk unless the UK accelerates its pursuit of more trade deals.
Danker told the Times that the West’s shift away from countries such as Russia and China risked becoming “incredibly expensive”, as companies stopped sourcing goods from the “cheapest and most economically efficient” markets.
“We all need to admit and recognise that this has the potential to have great economic cost that ultimately would be borne by UK consumers,” he said.
Whitehall should pursue free trade agreements to capitalise on departure from the EU and to cushion the blow of 'deglobalisation', he argued, prioritising imports just as much as exports.