Washington: The European Union and Mexico have  announced a major update to their free trade pact signed nearly two decades ago, a development that will allow almost all goods, including agricultural products, to move between Europe and Mexico duty-free.

The deal, which has yet to be formally signed, is expected to increase trade in dairy, pork, services, digital goods and medicines between the economies. It will also give Mexico greater access to an advanced consumer market, as negotiations with the Trump administration over the modernisation of the North American Free Trade Agreement still appear to be on uncertain ground.

And it sends a message to President Donald Trump that some of the United States' closest trading partners are moving ahead with deals of their own — potentially leaving US exporters on the losing end in foreign markets.

In its announcement, Mexico said the agreement would help modernise its commercial relationship.

Jean-Claude Juncker, president of the European Commission, said in a statement that "trade can and should be a win-win process, and today's agreement shows just that." He added, "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."