Germany’s auto industry trade association, the VDA, has welcomed the conclusion of EU-Mexico negotiations for an updated trade agreement. This comes at a crucial time when discussions of rising trade tariffs, particularly in the context of the US under President Donald Trump, are taking center stage in the global auto industry.
The European Commission recently announced the completion of negotiations with Mexico on an updated trade agreement, marking a significant milestone in trade relations between the EU and Mexico. As the EU’s second-largest trading partner in Latin America, Mexico holds strategic importance for European economies.
The VDA emphasized the positive implications of the trade deal, especially for Germany as a major export-oriented country. With around 70% of jobs in the German automotive industry dependent on exports, the agreement is seen as a boon for maintaining prosperity and economic stability.
Highlighting Mexico’s significance as a key location for the German automotive sector, the VDA noted that German suppliers have over 330 facilities in Mexico, while German automakers have production plants that set a new record of 716,000 cars in 2023. Mexico’s position as a crucial production hub for German manufacturers in America underscores its importance in the global automotive supply chain.
Moreover, Mexico’s inclusion in the USMCA free trade area further enhances its appeal as a manufacturing base for vehicles destined for the US and Canadian markets. The VDA also highlighted Mexico’s potential as an export market, with 21,000 cars exported from Germany to Mexico in 2023.
In line with the industry’s shift towards sustainability and climate protection, the VDA stressed the importance of a strong, export-driven automotive sector that can navigate the challenges of transformation. The association also underscored the role of trade agreements in bolstering economic strength and positioning the EU as a key player on the global stage.
Looking ahead, the VDA called for continued efforts to expand trade agreements, including ongoing negotiations with India, ASEAN countries, and Australia. By fostering a robust trade environment, the EU can strengthen its economic resilience and competitiveness in an increasingly interconnected world.
Overall, the EU-Mexico trade deal represents a significant milestone in fostering economic cooperation and trade relations between Europe and Latin America. The VDA’s positive stance reflects the broader industry sentiment towards promoting free trade and ensuring a sustainable future for the automotive sector.
