BREXIT: Update of the UK-Mexico Trade Continuity Agreement
In relation to our recent insights Brexit: Mexico and the United Kingdom sign Trade Continuity Agreement and Brexit: A First Look at UK-Mexico Trade Continuity Agreement's Relevant Issues, the Governments of Mexico and the United Kingdom have informed that although their internal ratification procedures have not yet been completed, they both have established transitional mechanisms to maintain, beginning as of January 1, 2021, preferential tariff treatment in accordance with the following:
The Government of the United Kingdom will provisionally apply the Agreement, maintaining preferential tariff treatment to Mexican imports.
As per the Government of Mexico, United Kingdom imports will be subject to Most Favored Nation (MFN) rates, however, a transitional mechanism will be established to refund import duties until the date the Agreement enters into force. We will be communicating the relevant process once it is announced.
Therefore, companies that import UK goods into Mexico must take into consideration the economic impact that the –temporary- import duties could represent in their supply chain; likewise, it is recommended to maintain adequate internal controls so that once the tariff refund rules are issued, companies could access such refunds.