The Trump administration's hardball approach to trade is accelerating talks between the European Union and Mexico.
EU Trade Commissioner Cecilia Malmstrom and Mexican Economy Minister Ildefonso Guajardo have scheduled two new rounds of trade talks during the first half of the year as part of an effort to speed up the progress of a new, reformed free trade agreement, the European Commission said on Wednesday. The move comes into reaction to increased protectionism in the United States and elsewhere around the globe.
"Together, we are witnessing the worrying rise of protectionism around the world," Malmstrom and Guajardo said in a joint statement. "Side by side, as like-minded partners, we must now stand up for the idea of global, open cooperation. We are already well underway in our joint efforts to deepen openness to trade on both sides. Now, we will accelerate the pace of these talks in order to reap the benefits sooner."
The EU and Mexico last year initiated negotiations to update their existing free trade agreement from 2000. Their goal is to better mirror other trade deals negotiated more recently and include items such as increased participation of European companies in Mexican public tenders, improved cooperation on imports requirements related to food safety, plant and animal health, more flexible rules of origin and facilitating trade in energy products and raw materials.
Between 2005 and 2015, the annual trade flow of goods between the two has more than doubled to €53 billion ($57 billion) from €26 billion.
The EU is Mexico's third-largest trading partner after the U.S. and China. The EU is also a major investor in Mexico, accounting for over $130 billion in foreign direct investment in 2014. In the same period, Mexico accounted for more than $30 billion in foreign direct investments in Europe.
The announcement of the accelerated trade talks, which will take place in April and June, comes as the Trump administration has signaled it will take an aggressive stance towards trade.
Mexican President Enrique Pena Nieto called off a meeting schedule for January 31 last week after Trump continued to insist Mexico would pay for his proposed wall at the border. The situation heightened when Press Secretary Sean Spicer suggested the U.S. might consider imposing a 20% tax on imports from Mexico (an idea that White House later said was just one of many).
The back-and-forth took place as Guajardo was in Washington, D.C., with Mexico's foreign affairs secretary Luis Videgaray Caso meeting with Trump officials.
Andres Rozental, former deputy foreign minister and Mexican Ambassador to the United Kingdom, said the U.S. and Mexico have found themselves in the midst of a "serious disagreement" and potential crisis.
"It's going to be a while before we're able to put this issue [of the wall] aside and be able to get back to a normal negotiating framework," he said.
Trump met with British Prime Minister Theresa May on Friday, where the pair discussed a bilateral trade agreement between the U.S. and the U.K. The U.K. voted to exit the European Union in June 2016.
Top Trump trade adviser Peter Navarro this week accused Germany of using a "grossly undervalued" euro to "exploit" the U.S. and its EU partners in an interview with the Financial Times.
On Wednesday, German automaker BMW again reiterated the company will stick to its investment plans for Mexico and the United States despite Trump's threats of a border tax and other measures. "We need free world trade," said BMW CEO Harald Krueger.