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South Korean Minister of Foreign Affairs Cho Hyun and Mexican Secretary of Foreign Affairs Roberto Velasco Álvarez pose for a commemorative photo after exchanging a memorandum of understanding on scholarships and academic exchanges at the National Palace in Mexico City on the 24th local time, with President Lee Jae-myung and Mexican President Claudia Sheinbaum in attendance. / Yonhap

South Korea and Mexico have concluded negotiations to revise their bilateral investment treaty to bolster protections for mutual investors. By broadening safeguards over capital recovery, loss compensation, and fund transfers for South Korean enterprises operating in Mexico, the two nations have laid an institutional foundation to expand bilateral investment.

According to the Ministry of Foreign Affairs on the 25th, the South Korean foreign ministry and the Mexican Ministry of Economy finalized talks on the 23rd to amend the Agreement between the Government of the Republic of Korea and the Government of the United Mexican States for the Promotion and Reciprocal Protection of Investments.

The two countries have been pursuing revision talks since 2019 to modernize the existing treaty, which was signed in 2000 and took effect in 2002, to reflect evolving global investment dynamics. An agreement was reached seven years after negotiations commenced.

A bilateral investment treaty establishes legal standards to safeguard and promote foreign investment within host nations. As of this month, South Korea has concluded 102 bilateral investment treaties, with 85 currently in force.

The core of the revised treaty clarifies the host nation's legitimate regulatory authority while substantially strengthening tangible protections for South Korean investors. Dispute settlement procedures were improved to curb indiscriminate lawsuits from shell companies, and the transfer of investment funds is guaranteed even during foreign exchange crises. The pact also introduces a new treaty-based route of recourse against excessive tax measures.

Mexico represents South Korea's largest trading and investment partner in Latin America. Bilateral trade reached $20.6 billion last year, with South Korean exports totaling $12.1 billion and imports reaching $8.5 billion. South Korea's cumulative investment in Mexico stood at $13.5 billion through last year.

With numerous South Korean companies active in Mexico, the Ministry of Foreign Affairs expressed expectation that this revision will serve to reinforce the legal framework safeguarding bilateral investments. Both sides agreed to advance domestic procedures to ensure the swift signing and entry into force of the revised agreement, while confirming commitments to expand related cooperation.

                                                                                                            Mok Yong-jae