Investment Pacts With China, South Korea, India, And Switzerland Updated By Mexico

The process of updating four Investment Promotion and Protection Agreements (APPRIs) with South Korea, China, India, and Switzerland has been started by the Mexican government, Mexico News Daily reported.

According to the Economy Ministry, it is only the commencement of a plan to reform the majority of the country's current APPRIs, many of which are in fact over their expiration dates.

An APPRI is an international agreement that encourages the flow of capital across borders and offers security to foreign investors' business dealings. APPRIs support foreign direct investment and increase Mexico's ability to draw in outside funding. Additionally, they enhance the circumstances for Mexican investors overseas.

Hong Kong signed an APPRI with Mexico in 2021, joining nations like Germany, China, South Korea, Spain, France, Italy, Turkey, the United Kingdom, and Sweden as the 30th nation to do so. 25 of the 30 APPRIs that Mexico has signed, though, have already expired.

Even some of the current APPRIs, which were signed before 2000 and are regarded as having outdated safeguards, is expected to be renegotiated at some point by Mexico. According to the Economy Ministry, Mexico and Switzerland inked their first APPRI in 1996. The 25 expired agreements have mostly just sat idle, with neither party making any attempts to withdraw. India is an exception, which ended its pact with Mexico in 2019 after it had expired in 2018.

According to César Guerra, Director of Trade and Access Consulting, while each of the agreements is unique, they all aim to protect foreign investors by providing legal mechanisms that enable them to file a claim under the APPRI (similar to the claim process under the USMCA) if they believe the Mexican government is not treating them fairly.

The Mexican government is especially working to update the older accords with new clauses addressing corporate social responsibility and sustainable investment. Additionally, it attempts to strengthen the dispute-resolution process between Mexico and foreign investors in order to reduce frivolous claims and increase transparency. Additionally, it aims to control third-party financing and appoint unbiased and independent arbitrators in case of conflicts.

In May 2022, the World Trade Organization (WTO) reported that Mexico had entered into 23 new international trade agreements, making it the No. 7 world economy in terms of agreements signed.