Civil organizations oppose the new EU-Mexico trade agreement

First modification: 07/05/2022 – 12:20

On April 28, 2020, negotiations concluded to modernize the Free Trade Agreement between the European Union and Mexico (TLCEUM), a bilateral agreement that has existed for more than two decades and is currently undergoing legal review. The new version of the TLCUEM must be submitted soon to the Mexican Senate for ratification.

However, in an open letter (full text here), 120 Mexican and European civil organizations call not to ratify said global agreement.

“Part of these changes have to do with giving more protection to transnational investors. It would be a totally contradictory action to what the Mexican government has said so far: it is trying to recover more sovereignty over some sectors, for example, energy”, estimates Lucía Bárcena, a researcher at the Transnational Institute (TNI) in Amsterdam, a center for analysis on trade and investment policies, and signatory of the letter against updating the Agreement.

Bárcena describes the new agreement as a “blank check for transnationals” and considers that “they would have much more pressure on the Mexican government.”

The organizations that denounce the updating of the agreement between the EU and Mexico are particularly concerned about the investment chapter.

“One of the things that this chapter provides is access to international arbitration to resolve possible disputes that arise between States and transnational companies,” explains Bárcena. And he adds: “This is a mechanism that has already been demonstrated in the past, including against Mexico, which are sometimes transnational companies that, due to some type of legislation or measure that the government has approved and that may go against their private interests , who have initiated this type of demands”.

“Mexico is the third country in Latin America with the most investment arbitration claims. The investors who are suing come from Canada, the United States or Europe. The Agreement could open doors to many more lawsuits for measures that are not always contractual matters. Most of the time we are talking about issues of public policy such as a law in favor of the environment or a law that places limits on energy prices. From the investor’s point of view, it could be seen as a measure that goes against their private benefits,” warns Bárcena.