Introduction

The transition period for the United Kingdom's withdrawal from the European Union ended on 31 December 2020, in accordance with Article 126 of the Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community.

Throughout the transition period, EU law – including the Mexico-EU Free Trade Agreement (FTA) – applied to and in the United Kingdom. This article examines how the United Kingdom's withdrawal from the European Union has affected Mexico's commercial relationship with the United Kingdom and the European Union.

Mexico-UK continuity agreement

Following the expiration of the transition period, the benefits provided for in the Mexico-EU FTA no longer extend to the United Kingdom. This means that Mexican importers can no longer obtain an invoice declaration or certificate of origin stating that goods qualify as originating from the European Union from companies located in the United Kingdom.

Pending the negotiation of a full FTA, Mexico and the United Kingdom have signed the Trade Continuity Agreement Between the United Mexican States and the United Kingdom of Great Britain and Northern Ireland (Mexico-UK continuity agreement), which establishes that the provisions of the Mexico-EU FTA relating to trade matters, including those relating to the origin of goods produced in the United Kingdom, apply between Mexico and the United Kingdom as if the countries have executed a bilateral agreement on goods originating from the United Kingdom.

The Mexico-UK continuity agreement entered into force in Mexico on 9 April 2021 when President Andrés Manuel López Obrador published in the Federal Official Gazette a decree through which the Agreement Regarding Article 12 of the Trade Continuity Agreement between the United Mexican States and the United Kingdom of Great Britain and Northern Ireland was approved. The agreement was executed in Mexico City by means of an exchange of letters dated 29 December 2020.

While the Mexico-UK Continuity Agreement has now entered into force in Mexico, there was a three-month period with no regulation.

Can importers claim preferential duty treatment for goods imported before the agreement took effect?

Yes, Mexican importers which imported goods originating from the United Kingdom from 1 January 2021 until the date on which the agreement took effect in Mexico (ie, 9 April 2020) may retroactively claim preferential duty treatment regarding such originating goods.

The above implies that Mexican importers may request, as applicable, the offset or refund of import duties paid without claiming preferential duty treatment, upon the importation of the goods into Mexico.

Is this the final agreement that will regulate Mexico's relationship with the United Kingdom?

No, the Mexico-UK Continuity Agreement is a temporary agreement. In accordance with Article 9 of the agreement, Mexico has agreed to initiate negotiations on a new FTA with the United Kingdom. The countries have agreed that they will endeavour to conclude these negotiations within three years of the Mexico-UK Continuity Agreement's entry into force (ie, before 9 April 2024).