Nearing a fourth year as the leader of the union of Southern states, Spain is taking steps to remove itself from the union.
In doing so, the country is moving away from a status quo where it is the only major union country in the Americas, but has a high unemployment rate and a long, rocky relationship with its biggest trading partner, the United Kingdom.
That’s why, on Tuesday, President Mariano Rajoy announced that Spain would formally exit the union, as part of a historic deal that includes a number of concessions for the European Union, including a reduction in the amount of trade barriers.
Rajoy also announced that he will begin negotiations with the European Commission on the creation of a single market in goods and services.
But he’s already got a new rival: Mexico, which is also set to leave the union next year.
Rajós plan to replace Spain with Mexico as the main trade partner has the support of Mexico’s President Felipe Calderón.
And Calderón’s popularity with Mexican voters has surged in recent months.
As a result, in a sign of just how much support Calderón still has among his countrys most loyal voters, his Popular Party, a populist party that has been in power for more than 30 years, is already running candidates in three out of five of the countrys 18 congressional districts, and is likely to make a big splash in the upcoming legislative elections.
But Mexico has been less than enthusiastic about Mexico becoming a permanent member of the Union.
Calderón, for his part, has made Mexico a cornerstone of his reform agenda, including the elimination of the nations top corporate tax rate of 35 percent, which would create a powerful incentive for companies to move operations and jobs to Mexico.
“The people of Mexico are very angry with the government in Madrid and with Calderón,” Mexican economist Carlos Alberto Díaz told Axios.
“It seems like they’re ready to put the country in a situation where it’s like, ‘I don’t need you anymore, I can get whatever I want.'”
In his remarks on Tuesday to the news media, Calderón was also expected to make Mexico the main beneficiary of the trade deal with the EU, which includes some of the biggest deals in the history of the bloc.
The deal is a major win for Mexico, whose trade deficit with the United State has fallen dramatically since the end of NAFTA in December.
As part of the deal, Mexico will get $50 billion to help with the transition of its manufacturing to the EU from 2018, and to finance infrastructure projects that Mexico has set aside for its citizens.
But, in order to get the money, Mexico has to agree to a number goals that include: lowering tariffs on everything from cars to electronics to trucks and rail vehicles, raising the minimum wage, and boosting government spending on health and education.
And while some of those goals are not as ambitious as those for the United Nations, it’s clear that Mexico will have to come to terms with some of its past missteps and come up with some kind of compromise to get its trade deficit down to sustainable levels.
Mexico is a big market for the U.S. But for the first time, Mexico is also an important market for Mexico’s partners, which have a strong appetite for U.K.-based products and services and are concerned about the impact of the Brexit vote on their economies.
Mexico’s negotiators have been working to reduce trade barriers in the past, and this will allow the United states to sell to Mexico products that are already there and which can be manufactured in the country, the people familiar with the negotiations said.
Mexico has already agreed to the creation a joint U.N.-Mexican trade committee to monitor the implementation of the agreement.
But a formal agreement could be months away, as the two sides are still in the midst of negotiating over the details.