Dispute resolution procedures improved

Scope of protection expanded

President Lee Jae Myung and Mexican President Claudia Sheinbaum shake hands following a joint press statement at the National Palace in Mexico City on Thursday (local time). [Yonhap]
President Lee Jae Myung and Mexican President Claudia Sheinbaum shake hands following a joint press statement at the National Palace in Mexico City on Thursday (local time). [Yonhap]

South Korea's Ministry of Foreign Affairs said Friday that negotiations to revise the investment promotion and protection agreement between the governments of South Korea and Mexico concluded on Wednesday.

The two countries' trade ministries had been working to modernize the existing bilateral investment treaty — signed in 2000 and entered into force in 2002 — to bring it in line with the changed international investment environment. The revised agreement came seven years after negotiations began in 2019.

The updated treaty clarifies the host country's legitimate right to regulate while strengthening substantive protections for South Korean investors, including provisions on the repatriation of investment proceeds and compensation for losses. It also improves dispute resolution procedures by preventing indiscriminate lawsuits by shell companies, and expands the scope of protection — guaranteeing the transfer of investment funds even during a financial crisis and establishing new treaty-based remedies against excessive tax measures.

Both sides said the revision would provide investors from both countries with a more transparent and stable investment environment and contribute to further expanding investment and economic cooperation between the two countries. Mexico is South Korea's largest trading and investment partner in Latin America, with a significant number of South Korean companies operating there, making the conclusion of the revised text an opportunity to further strengthen the legal foundation for bilateral investment protection.

The two sides agreed to proceed with their respective domestic procedures to bring the revised agreement to signature and into force as soon as possible.

South Korea said it would continue pursuing the conclusion and revision of investment protection agreements to safeguard the overseas investments of its citizens and companies, create stable conditions for outbound investment, and attract greater foreign investment into the country.

Meanwhile, Culture Minister Choi Hwi-young and Park Jin-young, co-chair of the Popular Culture Exchange Committee, met with Mexican Culture Minister Claudia Curiel de Icaza at the National Museum of Textiles in Mexico City on Thursday (local time) to discuss avenues for cultural cooperation.


youknow@heraldcorp.com