A matter of perspective

The news that the European Union and Mexico have reached a free trade agreement is of some concern in some quarters, particularly north of the Mexico-US border, but not here in Europe. To underline this, the European Dairy Association has published its dairy trade focus on Mexico showcasing both industries.

The Mexican and EU dairy industry have both increased their milk production between 2010-16, by 7% and 11% respectively. Mexico is 82% self-sufficient in dairy products and has a strong interest in importing EU dairy products like cheese and butter. Now, both sets of countries will see more dairy trade.

However, I have a great deal of sympathy for the US position, particularly its hapless trade representatives. I do feel, as many others must do, that this is a self-inflicted injury on the trade front for the Americans. Let’s face it, if you’re doing $1 million per minute of business with a trading partner, the last thing one should probably do is insult its populace and threaten to build a wall between you and that country.

Finding other markets and other international friends is the logical conclusion to endless bluster and hyperbole. People will start ignoring the crank in the corner (or 1600 Pennsylvania Avenue) and just trade around the obstacle. It’s happened with the Russians and will happen with the US. Countries will go find other nice countries to trade with, not ones who insult their populations and their economies.

That being said, the embargo has had unexpected positives for the domestic market in Russia, as it has grown better out of necessity. It has also made the EU even more interested in finding markets such as the Middle East and Africa to trade with.

The US domestic market is also a lot more sophisticated and can stand more knocks than those east of the European Union. But still, having the world’s biggest trading bloc as one of your new best mates must be edifying for Mexico, and I suspect the UK should also keep remembering this, when dealing with the EU as it slides towards Brexit.

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