UK-Mexico trade deal could boost Tequila
The UK and Mexico have started discussions for a new free trade agreement (FTA) that could help grow Scotch exports and the Tequila sector.
The negotiations for a ‘Mexico 2.0’ deal began last Friday (20 May). The ‘enhanced’ deal aims to support high-tech jobs, industries of the future and grow the economy, the UK government said.
The current FTA between the two nations is based on the EU-Mexico Global Agreement, negotiated more than two decades ago.
The UK’s secretary of state for international trade, Anne-Marie Trevelyan, said: “From autonomous vehicle manufacturers in the West Midlands, to Wales’ green tech businesses and Scotland’s thriving food and drink sector, companies of all shapes and sizes across the UK stand to benefit.”
The UK government hopes to increase its trade relationship with the country, which is currently worth more than £4 billion (US$5bn).
The new deal aims to ‘lock in tariff reductions’ of £57 million (£71m) every year, secured under existing agreements.
Mexico’s growing population of more than 130m consumers means demand for imports is expected to rise by 35% by 2035, according to the UK’s Department for International Trade.
Mexico is the leading Latin American country for UK food and drink products, and the top market for whisky, the UK government said.
The chief executive of UK-headquartered Diageo, the world’s biggest Scotch whisky distiller, welcomed the new negotiations.
Diageo CEO Ivan Menezes said: “The continuation of tariff-free trade between the UK and Mexico will support both the growth of Scotch exports and the important Tequila category.”
Diageo also owns Tequila brands Don Julio and Casamigos, as well as the recently acquired flavoured Tequila 21 Seeds.
In October 2021, Diageo announced it would invest US$500m in new production facilities in Jalisco, Mexico, following a reported 79% jump in organic net sales of its Tequilas in the company’s full-year 2021 results.
Mexico is the seventh-largest export market for Scotch by volume, up by 13% to 48m bottles in 2021, according to figures from the Scotch Whisky Association (SWA).
The UK and India are currently in discussions for an FTA that could remove the 150% import tax on spirits. The move could boost Scotch whisky exports by £1bn (US$1.25bn) over five years, the SWA predicted.
Last week, to mark World Whisky Day (21 May) Mark Kent, the new CEO of the SWA, looked ahead to what the future holds for the Scotch industry.