Mexico and the European Union have agreed a new trade deal that virtually eliminates tariffs between the two blocs, as Europe forges ahead with setting up new trade links around the world ahead of Brexit.

The deal, inked at the weekend, took two years to negotiate and eliminates tariffs practically across the board, including the agriculture.

The British government has staked its economic fortunes on negotiating new free trade deals around the world, but also hopes to piggy-back on the dozens of deals already signed by the EU which the UK currently benefits from. Liam Fox, the UK trade secretary, visited Mexico in July last year, stating that he hoped to “replicate” the then pending EU deal for Britain after it leaves the bloc.

The latest agreement also gives some clues to the requirements the EU could impose on Britain when Theresa May seeks to negotiate a free trade agreement with the bloc after Brexit.

The Mexican government has agreed to recognise 240 “geographical indications” – regional products protected by EU rules like Champagne – and ban Mexican imitations from using the same names. The UK government has been resisting signing up to such rules, with a view to signing a deal with the US, which regards them as protectionism.

The deal also includes a passage on financial services, but provisions are based on the idea of “equivalence” which City of London bosses have said would be insufficient for UK firms because it can be revoked by the EU at any time if rules are not deemed to meet European standards.

In less than two years the EU and Mexico have delivered a deal fit for the economic and political challenges of the 21st century Cecilia Malmström, EU trade commissioner

“Trade can and should be a win-win process and today's agreement shows just that,” European Commission President Jean-Claude Juncker said.

“Mexico and the EU worked together and reached a mutually beneficial outcome. We did it as partners who are willing to discuss, to defend their interests while at the same time being willing to compromise to meet each other's expectations. With this agreement, Mexico joins Canada, Japan and Singapore in the growing list of partners willing to work with the EU in defending open, fair and rules-based trade.”

Cecilia Malmström, the EU’s trade commissioner added: “In less than two years the EU and Mexico have delivered a deal fit for the economic and political challenges of the 21st century.

Liam Fox visited Mexico to drum up trade for Brexit Britain in July 2017 (Reuters)

“We now open a new chapter in our long and fruitful relationship, boosting trade and creating jobs. Today's agreement also sends a strong message to other partners that it is possible to modernise existing trade relations when both partners share a clear belief in the merits of openness, and of free and fair trade.”

The deal also opens up Mexican government procurement to EU companies, and slashes tariffs on European goods such as pasta, pork, cheese, chocolate, and milk powder. A previous trade deal signed 21 years ago mostly covers industrial goods.

Crawford Falconer says other countries could try to renegotiate trade deals with UK

Mexico is expected to get better access for products including orange juice, tuna, asparagus, honey, egg white albumin, and meats.

“It needed to be more ambitious in the agricultural sector, it needed to be more ambitious in services, it needed to be more ambitious in many of the elements that in the end we managed to agree on after two years of work,” Mexican Economy Minister Ildefonso Guajardo said.

Brexit so far: in pictures Show all 53 1 /53 Brexit so far: in pictures Brexit so far: in pictures Brexit campaign Boris Johnson led the VoteLeave campaign PA Brexit so far: in pictures Brexit campaign Boris Johnson MP, Labour MP Gisela Stuart and UKIP MP Douglas Carswell address the people of Stafford in Market Square during the Vote Leave Brexit Battle Bus tour on 17 May 2016. Their lead line on the tour was: “We send the EU £350 million a week, let's fund our NHS instead.” Getty Brexit so far: in pictures Voting day A man shelters from the rain as he arrives at a polling station in London on 23 June 2016. Millions of Britons voted in the referendum on whether to stay in or leave the European Union AFP/Getty Brexit so far: in pictures Referendum results Leader of Ukip, Nigel Farage, reacts at the Leave EU referendum party at Millbank Tower in central London as results indicated that it was likely the UK would leave the European Union AFP/Getty Brexit so far: in pictures Protesting the result A young couple painted as EU flags and a man with a sign reading “I’m not leaving” protest outside Downing Street against the voters decision to leave the EU on 24 June 2016 Getty Brexit so far: in pictures David Cameron resigns British Prime Minister David Cameron resigns on the steps of 10 Downing Street on 24 June 2016 after the results of the EU referendum were declared and the United Kingdom voted to leave the European Union Getty Brexit so far: in pictures Theresa May Becomes the new Conservative Party leader Theresa May receives a kiss from her husband Philip, after becoming the new Conservative Party leader on 11 July 2016. May became Prime Minister two days later and although she voted to remain in the referendum was keen to lead Britain’s Brexit talks after her only rival in the race to succeed David Cameron pulled out unexpectedly. May was left as the only contender standing after the withdrawal from the leadership race of Andrea Leadsom, who faced criticism for suggesting she was more qualified to be prime minister because she had children AFP/Getty Brexit so far: in pictures Lancaster House keynote speech on Brexit British Prime Minister Theresa May delivers her keynote speech on Brexit at Lancaster House in London on 17 January 2017. Where she spoke about her offer to introduce a transition period after the UK formally leaves the European Union in March 2019. Despite repeating the pro-Brexit mantra of “no deal is better than a bad deal”, the Prime Minister claimed she wanted a “tone of trust” between the negotiators and said Britain was leaving the EU but not Europe. 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May and Macron agreed a new border security deal, through which the UK will pay more to France to stop migrants trying to reach British shores on 18 January 2018 AFP/Getty Brexit so far: in pictures Transition period agreed The UK and EU agree terms for Brexit transition period on 19 March, 2018 Reuters Brexit so far: in pictures No agreement on Irish border The EU and UK however failed to reach an agreement on the Irish border during the successful talks on other Brexit issues AFP/Getty Brexit so far: in pictures EU attacks May’s ‘fantasy’ strategy For months after the March deal is struck there is little significant progress in talks. 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Getty Brexit so far: in pictures People's Vote march As the People's Vote campaign and The Independent's Final Say campaign gain traction, 700,000 people turn out in London to demand a final say on the UK's Brexit deal on October 20 2018 PA Brexit so far: in pictures More resignations As the Prime Minister settles on a Brexit deal, Brexit secretary Dominic Raab resigns along with Work and Pensions secretary Esther McVey and many other ministers Getty Brexit so far: in pictures Final Say petitions delivered to Downing Street People's Vote supporting MPs Chukka Umunna, Justine Greening and Caroline Lucas and The Independent editor Christian Broughton deliver over a million signatures in favour of a People's Vote to the Prime Minister at 10 Downing Street on December 3 2018 PA Brexit so far: in pictures May delays vote On December 10, the Prime Minister delayed the vote on her Brexit deal as it was near certain not to pass through the Commons due to Tory rebels and lack of DUP support AFP/Getty Brexit so far: in pictures No confidence motion Tory MPs triggered a confidence vote in the Prime Minister on December 12. She won by 200 votes to 117 Reuters Brexit so far: in pictures Commons rejects the deal Following the delay, the Prime Minister's deal was rejected in the Commons by a historic 230 votes AFP Brexit so far: in pictures Corbyn tables a no confidence motion Following the rejection of the Prime Minister's deal, opposition leader Jeremy Corbyn tabled a motion of no confidence in the government, which the government won by a margin of 19 AFP/Getty Brexit so far: in pictures Plan B The Prime Minister won the support of the commons to return to Brussels to renegotiate the backstop on January 29. In the same sitting, MPs also voted against a no-deal Brexit in a non-legally binding motion PA Brexit so far: in pictures EU council president savages Brexit campaigners who failed to plan for departure: ‘Special place in hell’ There is a “special place in hell” for pro-Brexit campaigners who demanded Britain leave the EU without explaining how it should happen, Donald Tusk has said. 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The prime minister did not appear in parliament to see another defeat PA Brexit so far: in pictures Labour and Conservative MPs resign and create the Independent Group Back row of Chris Leslie, Gavin Shuker, Chuka Umunna and Mike Gapes, middle row of Angela Smith, Luciana Berger and Ann Coffey and front row of Sarah Wollaston, Heidi Allen, Anna Soubry and Joan Ryan PA Brexit so far: in pictures Non-biding votes on amendments to Brexit motion On February 27 he house held a series of votes, unanimously calling for the UK and EU to guarantee citizens rights in a no-deal scenario AFP/Getty Brexit so far: in pictures Attorney General publishes legal advice A hammer blow for May as Geoffrey Cox said her renegotiated deal can still leave UK in backstop against its will. Mr Cox did say the prime minister’s efforts had reduced the risk of the UK being trapped in the backstop indefinitely. MPs went on to vote against her deal by 391 to 242 UK Parliament/PA Brexit so far: in pictures No-deal off the table MPs rejected a no-deal Brexit by 43 votes on March 13, with cabinet ministers rebelling in another humiliating defeat for Theresa May. A day later they voted in favour of the prime minister seeking an extension to Article 50 AFP/Getty Brexit so far: in pictures House speaker bans May from third Commons vote on same Brexit deal John Bercow sensationally told Theresa May he would stop her making another attempt to pass her Brexit deal unless she has secured changes. The Speaker said a further ‘meaningful vote’ would be ruled out of order if the motion was “the same or substantially the same’ – under an ancient convention to stop the government bullying parliament on issues MPs have rejected Parliament Live Brexit so far: in pictures May writes to Tusk The prime minister wrote to Donald Tusk, president of the European Council, to ask for a three-month extension to give her more time to try to get her deal through parliament. However the European Commission advises the EU27 should offer a short extension to May 23 or a longer one meaning the UK would participate in European elections 10 Downing Street/AFP/Getty Brexit so far: in pictures European Council summit Theresa May’s request to extend triggering Article 50 until the end of June was rejected by the EU, and instead offered a shorter time frame. She accepted the offer of a delay until May 22 if her withdrawal deal is approved by Parliament. If MPs rejected it for a third time, the EU said Britain must propose a new plan by April 12. Ms May said she will not support a long delay because it would mean Britain participating in elections for the European Parliament Getty Brexit so far: in pictures Brussels confirms preparations for a no-deal Brexit are completed They warned that it is “increasingly likely” the UK will crash out. In a statement the European Commission (EC) said “preparedness and contingency work”, which the EC has been conducting since December 2017, was now finished. The announcement came days after EU leaders agreed to a request by Theresa May to extend the UK’s Brexit date AFP Brexit so far: in pictures May resigns British Prime Minister Theresa May reacts as she delivers a statement in London, Britain, May 24, 2019. REUTERS/Simon Dawson SIMON DAWSON Reuters

EU officials said earlier this year that the bloc should accelerate talks with Mexico, among other countries, in response to threats by Donald Trump to impose tariffs on EU goods. Mexico’s government is also pursuing the deal under the pretext of diversifying the country’s trade away from the US, which is taking an increasingly hard protectionist line under the right-wing president.