The Mexican government is working to modernize four of its Agreements for the Promotion and Protection of Investments (APPRIs) with South Korea, China, India, and Switzerland. These agreements, which are designed to provide legal protection for foreign investment in Mexico, were originally signed before the year 2000. However, the vast majority of these agreements have now expired or are due to expire, and the Mexican government has therefore undertaken a process of modernization to reflect the latest developments in international investment law.
One of the key goals of this modernization process is to include provisions on corporate social responsibility and sustainable investments in the APPRIs, as well as to improve the investor-State dispute settlement mechanism. The government is seeking to make the dispute resolution process more transparent and to ensure the independence and impartiality of arbitrators. It is also looking to clarify the language of certain provisions and to include new provisions that will provide greater legal certainty for foreign investors.
Mexico currently has a network of 30 APPRIs in force, as well as 12 free trade agreements with investment clauses, an Investment Cooperation and Facilitation Agreement (ACFI), and 60 agreements on double taxation. The country also participates in the Constitutive Agreement of the Multilateral Investment Guarantee Agency (MIGA) and the Agreement on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Agreement).
By modernizing its APPRIs, the Mexican government hopes to improve the foreign direct investment (FDI) climate in the country and to attract more productive foreign capital to its economy. The modernization process will also help to improve conditions for Mexican investors abroad and to diversify the FDI flows that the country receives. Overall, the modernization of the APPRIs is expected to help to consolidate a more favorable legal framework for investment in Mexico and to maintain and improve the country’s competitive position as a recipient of FDI among developing countries.