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Hard Brexit - Impact on UK Trade with Mexico

The document discusses the implications of a hard Brexit on UK-Mexico trade relations, highlighting the current free trade agreements and the tariff structures that would come into play. It outlines potential changes in tariff rates on various goods exchanged between the two countries, emphasizing the effects on both exports and imports. Additionally, it mentions the UK's efforts to establish new trade agreements with other nations post-Brexit.

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Oficina THE IMPLICATIONS OF A HARD BREXIT ON MEXICO – UK BUSINESS CDMX 23/09/2019 Emilio Arteaga, Partner
Background: UK-Mex Trade Relations • EU-Mex Free Trade Agreement • 97% of Tariff Lines Liberalized • Specific Agricultural Products Excluded: • E.g. Meat, Cheese, Chocolate, Cereal/Pastries/Pasta • New FTA: Full “Liberalization” • WTO • UK-Mex BIT (In force 2007)
Trade: UK-Mexico 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 Imports from UK Source: Mexican Ministry of Economy Million USD
Top 10 Goods From UK to Mexico Source: Trade Maps, ITC HS Code (4 Digit) Product Description '9706 Antiques of > 100 years old '9301 Military weapons, incl. sub-machine guns (excluding revolvers and pistols of heading 9302 and ... '9105 Clocks (excluding wrist-watches, pocket-watches and other watches of heading 9101 or 9102, ... '9111 Cases for wrist-watches, pocket-watches and other watches, incl. stop-watches, of heading 9101 ... '9207 Musical instruments, the sound of which is produced, or must be amplified, electrically, e.g. ... '8464 Machine tools for working stone, ceramics, concrete, asbestos-cement or like mineral materials ... '8530 Electrical signalling, safety or traffic control equipment for railways, tramways, roads, inland ... '8715 Baby carriages and parts thereof, n.e.s. '6905 Roofing tiles, chimney pots, cowls, chimney liners, architectural ornaments and other ceramic ... '7016 Paving blocks, slabs, bricks, squares, tiles and other articles of pressed or moulded glass, ... HS Code (2 Digit) Product Description '84 Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof '87 Vehicles other than railway or tramway rolling stock, and parts and accessories thereof '99 Commodities not elsewhere specified '85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television ... '22 Beverages, spirits and vinegar '90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical ... '27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral ... '29 Organic chemicals '30 Pharmaceutical products '39 Plastics and articles thereof https://www.trademap.org/
UK’s Export Potential to Mexico
Trade: Mexico-UK 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019 Exports from Mexico to UK Million USD Source: Mexican Ministry of Economy
Top 10 Goods From Mexico to UK Source: Trade Maps, ITC HS Code (4 Digit) Product Description '7108 Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured ... '8517 Telephone sets, incl. telephones for cellular networks or for other wireless networks; other ... '2203 Beer made from malt '8471 Automatic data-processing machines and units thereof; magnetic or optical readers, machines ... '8411 Turbojets, turbopropellers and other gas turbines '8523 Discs, tapes, solid-state non-volatile storage devices, "smart cards" and other media for the ... '8708 Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, ... '9031 Measuring or checking instruments, appliances and machines not elsewhere specified in chapter ... '8536 Electrical apparatus for switching or protecting electrical circuits, or for making connections ... '8409 Parts suitable for use solely or principally with internal combustion piston engine of heading ... HS Code (2 Digit) Product Description '79 Zinc and articles thereof '05 Products of animal origin, not elsewhere specified or included '02 Meat and edible meat offal '16 Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates '24 Tobacco and manufactured tobacco substitutes '31 Fertilisers '36 Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations '45 Cork and articles of cork '47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or ... '50 Silk https://www.trademap.org/
Mexico’s Export Potential to UK
Share in Mexican Trade Mexican Exports 2019 USA Canada China Other UK -1%80 % 3% 1.5% 14% Mexican Imports 2019 USA Canada China Other UK -1%45 % 2% 18% 33% Source: Mexican Ministry of Economy
Hard Brexit Scenario: Immediate Consequences EU-MEX-FTA • Tariff preferential treatment. • Global & Regional Value Chains Implications • Preferential Customs Processing Fee (or DTA) • Default CPF  .008% ad-valorem WTO governs trade relations. • MFN tariffs (UK WTO Schedule – 24/7/2018) • Replicates EU Schedules
Hard Brexit: UK Goods Mexican MFN Tariffs  “According to Mexico's most recentTrade Policy Review (2017), the average MFN tariff on agricultural and non-agricultural products was 14.3% and 4.6%, respectively.”
Hard Brexit: Mexico.HS Code (4 Digit) Product Description UK Tariffs '7108 Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured ... 0% (71081100) '8517 Telephone sets, incl. telephones for cellular networks or for other wireless networks; other ... 0% (85171100) '2203 Beer made from malt 0% (22030001, 22030009, 22030010) '8471 Automatic data-processing machines and units thereof; magnetic or optical readers, machines ... 0% (8471.3000, 8471.4100, 8471.4900, 8471.5000, 8471.6060…..) '8411 Turbojets, turbopropellers and other gas turbines 0% 8411.1100 '8523 Discs, tapes, solid-state non-volatile storage devices, "smart cards" and other media for the ... 0% 8523.2100,… '8708 Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, ... 2%  8708.10.10 4% 8708.10.90 2%8708.21.10 … '9031 Measuring or checking instruments, appliances and machines not elsewhere specified in chapter ... 0%  9031.10.00 2%  9031.20.00 0%  9031.41.00 '8536 Electrical apparatus for switching or protecting electrical circuits, or for making connections ... 2%  8536.10.10 2%  8536.10.50 2%  8536.10.90 2%  8536.20.10 2%  8536.20.90 0%  8536.30.10 0%  8536.30.30 0%  8536.30.90 2%  8536.41.10 … '8409 Parts suitable for use solely or principally with internal combustion piston engine of heading ... 0%8409.10.00 2%8409.91.00 …. https://www.check-future-uk-trade- tariffs.service.gov.uk/tariff?q=710811&n=25&p=1
Hard Brexit • UK is negotiating FTAs with EU’s trading partners (e.g. Iceland, Norway) • UK – Japan. • Pacific Alliance • Future Accession to CPTPP?
Resources • Find UK’s Applicable Tariff • The UK Global Tariff • Mexico: • SNICE*
Thank you! Questions? Emilio Arteaga Vázquez @EmilioArteagaV emilio@vtz.mx