It’s not Mexico that needs a trade deal with Europe, it’s the opposite.
For almost two decades Europe has been investing heavily inside Mexico, particularly noted in the auto industry, as they positioned themselves to take advantage of NAFTA and later the USMCA as an entry to the U.S. market.
European auto companies spent billions on assembly plants in Mexico, where they could ship EU manufactured component goods to be assembled into NAFTA/USMCA compliant vehicles. As President Trump and USTR Greer begin focusing on eliminating the USMCA trade agreement in favor of two bilateral deals (U.S-Canada and U.S-Mexico), Europe now needs to protect prior investment.
The prior Mexico-EU trade agreement has existed since 2000 (NAFTA timeframe). In 2025 they agreed to a revised Free Trade Agreement (FTA) and finalized the terms and conditions yesterday.
MEXICO CITY, May 22 (Reuters) – Mexico and the European Union signed a long-stalled free trade agreement on Friday as they seek to decrease dependence on the U.S. and partially insulate themselves from U.S. President Donald Trump’s tariffs.
The accord, which they reached broad agreement on in 2025 but have delayed signing, expands a Mexico-EU trade accord from 2000, which covered only industrial goods. The new pact adds services, government procurement, digital trade, investment and farm produce.
Mexico’s President Claudia Sheinbaum, European Commission President Ursula von der Leyen and European Council President Antonio Costa are to sign the deal in Mexico City in their first summit in over a decade.





