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HomeBilateral agreementsUK and Mexico signed a new post Brexit agreement

UK and Mexico signed a new post Brexit agreement

The UK has signed a Trade Continuity Agreement with Mexico. However, this TCA is not come into force from 1 January 2021. To minimise the impact of this, the UK and Mexico have agreed to ultimately ensure that there will be continuity of trading conditions on tariffs and rules of origin via an exchange of letters. This ensure that preferential tariff rates will continue to apply for goods imported into the UK from Mexico from 1 January 2021.

What does this mean for UK businesses exporting goods to Mexico from 1 January?

For a short period, from 1 January until the agreement is ratified in Mexico, goods entering Mexico from the UK will be subject to MFN tariffs. Businesses can find out what tariffs they will have to pay using the Mexican Government’s SIAVI online tool. However, once the agreement is in force, businesses will be able to claim back (from the Mexican Government) any tariffs paid in this temporary period. The Mexican Government will be issuing guidance on the rebate scheme shortly. Businesses should continue to fill out the same customs forms as they are required to now.

This guidance provides information on changes to certain aspects of trade that will apply from 1 January 2021 until the UK-Mexico agreement takes effect. It is for UK businesses trading with Mexico.

What is covered until the TCA enters into force

Provisions on:

  • preferential tariffs
  • tariff rate quotas
  • rules of origin

Import tariff rates on goods

Preferential tariff rates for bilateral trade in goods between the UK and Mexico will continue to apply from 1 January 2021. In some cases, the applied preferential rates for imports into the UK have been adjusted due to changes in the UK’s Most Favoured Nation tariff schedule (for example, removing of the entry price regime and certain complex agricultural duties). There will ultimately be no difference between the preferential tariff rates that will apply before and after the TCA enters into force.

You can use online tools Trade with the UK and Check How to Export Goods to check product-specific and country-specific information on tariffs and regulations that currently apply to UK trade in goods. These tools are regularly updated to reflect any changes.

Tariff rate quotas (TRQs)

Tariff rate quotas (TRQs) will apply from 1 January 2021. Utilisation before the TCA enters into force will be deducted from the volumes in the TCA. TRQs in the TCA have been tailored specifically to the UK.

Further details on this can be found in the side letters that were exchanged with Mexico and that form part of the TCA.

To find out the new TRQs, see table 4 of the Parliamentary Report.

Rules of origin

Claiming preferential rates for your exports from the UK

As outlined above, whilst the TCA is not yet in force trade will be governed under the principles of the WTO and the MFN tariff will be applied. Consequently, the certifications of origin will not be required at the time of importation for goods originating in the UK. However, these forms will still be needed when claiming preferential rates through Mexico’s retrospective payment scheme.

From 1 January 2021, the UK will continue to use the EUR.1 format for movement certificates with trade partners that have mutual FTAs with the EU, including Mexico. These movement certificates will look identical to those currently in use, but the place of origin on the certificate will be marked as the United Kingdom instead of the European Community.

From 1 January 2021, EUR.1 certificates of origin that have been updated to show the UK will be available from your usual provider, such as the chambers of commerce.

If you currently use an EUR.1 form with Mexico, once the TCA is in force, you can continue to use the new EUR.1 form that shows the UK as the place of origin.

Using EU materials and processing in your exports to Mexico

You can continue to use EU materials or processing in your exports to Mexico. The working or processing undertaken in the UK or Mexico must have fulfilled the necessary requirements set out in the Incorporated Rules of Origin Protocol and Annexes in the TCA. You must also ensure the working or processing you do in the UK goes beyond the minimal operations listed in TCA and the other relevant conditions are met.

For example, you will not be able to simply package or label a product from the EU and export it to Mexico as a good originating in the UK.

See the list of operations which are insufficient in Incorporated Article 7 of the Rules of Origin Protocol.

If you use EU materials or processing in your exports to Mexico, you need to submit evidence to the Mexican customs authorities. See Integrated Article 6.c for details.

Sending your goods to Mexico through the EU and other countries

Goods transited through the EU will not be subject to the same restrictions as those in transit through other countries.

For example, you will be able to split a consignment in the EU when exporting goods to Mexico, provided the goods comprising the consignment have not cleared customs in the EU.

Transit through any other country is possible provided your goods remain under customs surveillance and do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition.

Origin quotas

Origin quotas in the TCA have been tailored specifically to the UK and will be given effect from 1 January 2021.

Please see table 6 listed in the agreement Parliamentary Report, which details the new origin quotas.

What is not covered until the TCA enters into force

Unless stated above, other areas are not covered. Trading rules in these areas may therefore change from 1 January 2021. These areas include:

  • sanitary and phytosanitary measures (SPS)
  • regulations
  • services
  • investment
  • procurement
  • intellectual property, including geographical indications

These areas will be covered by the TCA when the agreement enters into force.

For detailed information on post Brexit consultancy forms and the advantages offered by the Maltese Government please contact the Malta Business Agency offices by filling in the following form.

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