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EU and Mexico finalize trade deal ahead of Trump’s return

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The EU and Mexico have agreed on a long-delayed trade deal as they seek to reduce their dependence on the US, hours before Donald Trump returns to the White House.

After nine years of negotiations, the two sides announced on Friday that they would modernize their existing agreement. The announcement came just weeks after Trump threatened tariffs and follows a similar trade deal signed in December between the EU and the South American trade bloc Mercosur.

“This landmark agreement proves that open, rules-based trade can ensure our prosperity and economic security, as well as climate action and sustainable development,” said European Commission President Ursula von der Leyen.

EU-Mexico trade in goods reached €82 billion in 2023, while two-way trade in services amounted to €22 billion in 2022.

Under the agreement, Mexico will eliminate tariffs of up to 100% on EU exports, including cheese, poultry, pork, pasta, jams, marmalades, chocolate, and wine.

Mexican producers will no longer be able to use the protected names of more than 500 products, such as champagne, Parma ham, and Rioja wine.

The agreement will allow Mexico to export duty-free electric vehicles to the EU if they contain at least 60% Mexican or EU-made components by value. This will make it more difficult for China to use Mexico as a production base for electric vehicles exported to the EU, as they will pay a standard 10% tariff if they use Chinese batteries.

“Companies will prefer to source from Europe rather than China,” an EU official told the Financial Times (FT).

The EU will also increase low-tariff quotas on Mexican exports such as beef, poultry, and ethanol.

The two sides had reached a preliminary agreement to extend the 20-year agreement in 2020, but the decision was delayed in part because of Mexico’s reluctance to open its energy market to EU companies.

EU companies will be treated the same as Mexico’s other preferential trading partners, including the US and South Korea, the official added.

Mexico, which exports more than 80% of its goods to the US, is one of the most vulnerable countries in the world to Trump’s tariff threats. The agreement with the EU could help provide exporters with alternatives if the new president implements his promised 25% tariffs.

Carlos Serrano, chief economist at BBVA Mexico, said: “This is very positive because it will give certainty to investors, as it will include protection mechanisms. It’s a vote of confidence in Mexico, and it also shows that Mexico wants to be aligned with the US and Europe.”

Dmitry Grozoubinski of the consultancy ExplainTrade said “turbulent times” had pushed the two sides to resolve the last remaining issues.

The EU stated that the deal, which also includes investment provisions, would help boost the bloc’s exports of services in key areas such as financial services, transport, e-commerce, and telecommunications, while also protecting intellectual property rights more effectively.

The agreement also includes legally binding commitments on labor rights, environmental protection, climate change, and responsible business conduct, overseen by a dispute settlement procedure.

The agreement still needs to be signed and then ratified by EU and Mexican lawmakers.

European farmers have protested against the Mercosur agreement and are likely to pressure their governments not to ratify the agreement with Mexico.

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Athens postpones Mitsotakis-Erdoğan meeting after Imamoglu arrest

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The arrest of Istanbul Mayor Ekrem Imamoglu has shaken diplomatic relations between Türkiye and Greece, leading Athens to announce the postponement of a planned meeting between the leaders of the two countries.

Greek government spokesperson Pavlos Marinakis stated, “Given these developments, it is becoming difficult to organize the High-Level Cooperation Council between Greece and Türkiye immediately.”

The High-Level Council consists of a series of meetings aimed at improving relations through “soft politics,” as progress on contentious issues such as territorial disputes has stalled.

As Kathimerini recently reported, the meeting planned between Greek leader Kyriakos Mitsotakis and Recep Tayyip Erdoğan on April 8 was not yet finalized due to the political crisis in Türkiye, even though negotiations between Athens and Ankara had reached their final stage.

The spokesperson added, “We are monitoring the developments in Türkiye. The situation remains fluid and concerning. Our stance on Imamoglu has not changed. Concessions on the rule of law and political freedoms are unacceptable, and convincing answers are needed for any concessions made.”

Marinakis mentioned that the issue could be discussed by the foreign ministers of both countries at the NATO foreign ministers’ summit in Brussels in early April.

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Trump’s proposed fees on Chinese ships threaten US maritime industry

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Industry executives stated on Monday at a US Trade Representative (USTR) hearing that President Donald Trump’s plan to revitalize the US shipbuilding industry is likely to backfire, as it relies on proposed fees for China-linked vessels that would harm domestic ship operators, ports, exporters, and employment.

The discussion centers on the stacking of fees on Chinese-built ships, which could exceed $3 million per visit to US ports. The Trump administration claims these fees will deter China’s increasing commercial and military dominance in open seas and encourage domestic shipbuilding. US steelworkers’ unions, US steel manufacturers, and Democratic lawmakers support this effort, saying it will revitalize the domestic industry.

However, this idea has created a shockwave in the local maritime industry, as it threatens the survival of the same shipping companies and customers that would increase the demand for orders from the US shipyards Trump wants to rebuild.

“The effort to strengthen American shipbuilding would not serve the national interest if it inadvertently destroyed American-owned carriers,” said Edward Gonzalez, CEO of Seaboard Marine, the largest US international ocean cargo carrier, based in Florida, on Monday.

Like many US operators, Seaboard relies on Chinese-made ships. According to maritime data provider Alphaliner, its fleet of 24 ships includes 16 Chinese-built vessels.

US ship operators said that fees on China-linked ships would push more US cargo to foreign-capitalized ocean transport companies, which have the resources to better handle the change.

According to the USTR, China’s share of the shipbuilding market rose from under 5% in 1999 to over 50% in 2023.

Speakers said that US shipyards produce fewer than 10 ships a year, while China produces 1,000.

Meanwhile, industry executives noted that shipbuilders in Japan and Korea would struggle to meet demand in the years it would take for US shipyards to build capacity.

Kathy Metcalf, CEO of the Chamber of Shipping of America, said that replacing existing Chinese-built ships is not like flipping a light switch. “Punishing China and the US maritime transport system is not an acceptable outcome,” she said.

US ship operators support key American industries such as manufacturing, mining, and agriculture by transporting goods on inland waterways, along the Great Lakes, and up and down the country’s coasts.

Agricultural exporters are struggling to book ships after May due to uncertainty in the USTR plan, while coal industry representatives also state that the fees make it difficult to offer their goods to the global market.

“I urge you to ensure that your efforts to increase domestic shipbuilding do not come at the expense of farmers’ access to the market,” said Mike Koehne, a board member of the American Soybean Association, who grows soybeans and corn in Indiana.

Nate Herman, senior vice president of policy for the American Apparel & Footwear Association, which is dependent on imports, said port fees would lead to job losses for American workers, higher costs for American exports and imports, and scarcity and rising prices for American consumers.

He cited a new study by various trade groups showing that high costs from port fees would cause US exports to fall by almost 12% and GDP to fall by 0.25%.

“Hardworking American families cannot afford more price increases and product shortages, and American manufacturers and farmers cannot afford to lose more export markets,” Herman said.

Representative Rosa DeLauro and 62 other Democrats in Congress supported the proposed fees and other “swift and decisive” actions in a letter sent to US Trade Representative Jamieson Greer on Monday, saying that China’s dominance in the sector poses “unacceptable costs and risks” in terms of job losses and critical manufacturing capacity.

They requested the USTR to provide a facility that would allow firms to avoid fees by routing their cargo through Mexico or Canada.

The USTR, which will hear more comments at a hearing on Wednesday before finalizing the proposal under the Unfair Trade Practices Act, did not immediately respond to requests for comment.

In the current proposal, to completely avoid fees, ship operators must be based outside of China, have less than 25% of the ships in their fleet built in China, and not plan to order or take delivery from Chinese shipyards in the next two years.

A draft executive order seen by Reuters earlier this month would further narrow this limit by imposing port fees on all fleets with Chinese-built ships.

Shipowners could try to minimize the blow by using larger ships and limiting calls to major US ports, but this could put those ports in a difficult situation and lead to supply chain-related stress.

According to ship and port operators, ship operators could also shift cargo bound for the US to ports in Canada and Mexico and rely on trucks and trains to complete the journey, but this measure could also clog border crossings and cause more infrastructure wear and tear.

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US expresses optimism after Riyadh talks with Russia

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According to a CBS News report citing informed sources, the technical team from the US that participated in talks with a Russian delegation in Riyadh submitted an “optimistic” assessment to the administration of President Donald Trump.

Reuters reported that discussions between Russia and the US included steps to support Trump’s efforts to end the conflict, including a potential ceasefire in the Black Sea. Kremlin spokesperson Dmitry Peskov confirmed that the Black Sea initiative was on the agenda in Riyadh.

Peskov stated that maritime security was a primary focus. Bloomberg added that technical details regarding a 30-day halt in attacks on energy facilities were also discussed.

On March 24, Trump addressed the topics discussed in Riyadh, saying, “Right now, we’re talking about territories. We’re talking about border lines, power, and ownership of power plants.”

The US president also expressed general satisfaction with the progress of the talks and praised Russian President Vladimir Putin for his participation.

A White House source told Reuters that progress had been made in the Riyadh meetings and that a “positive announcement” was expected soon. Peskov added that Putin would be briefed immediately on the outcomes of the Russian and American delegations’ discussions.

Additionally, RIA Novosti reported, citing a source, that the Russian delegation was in good spirits following the talks with US representatives in Saudi Arabia.

The meeting between the two delegations lasted over 12 hours on March 24 at The Ritz-Carlton in Riyadh, with three breaks. The discussions were closed to the press.

The Russian side was represented by Sergey Beseda, advisor to the director of the Federal Security Service (FSB), and Grigory Karasin, head of the International Affairs Committee of the Russian Federation Council. Russian Deputy President Yury Ushakov noted that these individuals were experienced diplomats well-versed in international affairs.

According to foreign media reports, the US delegation included Andrew Peek, senior director for Europe at the National Security Council, and Michael Anton, director of policy planning at the State Department, among others.

Russian Foreign Ministry spokeswoman Maria Zakharova emphasized that while major breakthroughs should not be expected from the Riyadh talks, it was important to recognize that work had been done across multiple areas.

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