On December 15, 2020, the Mexican Secretary of Economy and the Secretary of State for International Trade of the United Kingdom, issued a joint statement through which they communicated the signing of the UK-Mexico Trade Continuity Agreement.
Based on the joint statement, the Agreement will maintain preferential access for trade between the two countries following the end of the United Kingdom's Transition Period with the European Union on December 31, 2020, when the European Union-Mexico Global Agreement will no longer apply to the United Kingdom.
The purpose of the Continuity Agreement is to avoid the imposition of the World Trade Organization´s Most Favored Nation tariffs as a default measure, that otherwise would have become applicable after December 31st.
The joint statement indicates that the Agreement will be "temporary," as the governments of Mexico and the United Kingdom agreed to start negotiations aiming to enter into a new trade agreement that they will seek to conclude within the next three years.
Additionally, the joint statement notes that the Agreement will provide "vital" coverage to the automotive, pharmaceutical, textile, agricultural and food and beverage sectors, as well as other manufacturing industries.
As the text of the Agreement has just been released, we will be issuing a more detailed communication in the next few days.
It is highly recommended that companies that have or are planning trade operations between both countries analyze the impacts to their supply chains arising from the new Continuity Agreement.
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