Free Trade Agreement between Mexico and Central America

• Short title: Central America - Mexico FTA (2011)
• Parties: 1. Mexico; 2. CACM (Central American Common Market)
• Treaty type: Treaties with Investment Provisions
• Status: In force
• Date of signature: 22/11/2011
• Date of entry into force: 01/09/2012
• Treaty investment chapter text: es
• IIA content: Mapped
• Additional notes: More information and the text of all chapters of the Agreement can be found here.

Relationships with other agreements

Type	Agreement
Replacing	Mexico - Nicaragua FTA (1997)

Mapped treaty elements

Preamble

• Reference to right to regulate (e.g. regulatory autonomy, policy space, flexibility to introduce new regulations): Yes
• Reference to sustainable development: Yes
• Reference to social investment aspects (e.g. human rights, labour, health, CSR, poverty reduction): Yes
• Reference to environmental aspects (e.g. plant or animal life, biodiversity, climate change): No

Scope and Definitions

• Definition of investment
  • Type of definition: Asset-based definition
  • Limitations to the definition of investment
    • Excludes portfolio investment: No
    • Excludes other specific assets (e.g. sovereign debt, ordinary commercial transactions, etc.): Yes
    • Lists required characteristics of investment: Yes
    • Contains "in accordance with host State laws" requirement: Yes
    • Sets out closed (exhaustive) list of covered assets: No
• Definition of investor
  • Definition included: Yes
  • Specifying natural persons covered
    • Includes permanent residents: No
    • Excludes dual nationals: No
  • Specifying legal entities covered
    • Includes requirement of substantial business activity: Yes
    • Defines ownership and control of legal entities: No
• Denial of benefits (DoB)
  • DoB clause included: Yes
  • Content of the DoB clause
    • "Substantive business operations" criterion: Yes
    • Applies to investors from States with no diplomatic relations or under economic/trade restrictions: No
    • Discretionary ("Party may deny") or mandatory ("benefits shall be denied"): Unilaterally discretionary
• Substantive scope of the treaty
  • Limiting substantive scope of the treaty
    • Excludes taxation: Yes
    • Excludes subsidies, grants: No
    • Excludes government procurement: No
    • Excludes other subject matter: Yes
• Temporal scope of the treaty
  • Investments covered: Applies to both pre-existing and post-BIT investments
  • Disputes covered: Carves out pre-existing disputes

Standards of Treatment

• National treatment (NT)
  • Type of NT clause: Pre- and post-establishment
  • Reference to "like circumstances" (or similar): Yes
• Most-favoured-nation (MFN) treatment
  • Type of MFN clause: Pre- and post-establishment
  • Exceptions from MFN obligation
    • Economic integration agreements: Yes
    • Taxation treaties: Yes
    • Procedural issues (ISDS): Yes
• Fair and equitable treatment (FET)
  • Type of FET clause: FET qualified
  • FET qualified
    • By reference to international law: CIL/minimum standard of treatment
    • By listing FET elements (exhaustive or indicative list): Yes
  • FET modifiers: None
• Full protection and security: Standard
• Prohibition on unreasonable, arbitrary or discriminatory measures: No
• Expropriation
  • Scope of measures covered: Indirect expropriation mentioned
  • Refining expropriation clause
    • Indirect expropriation defined: Yes
    • Carve-out for general regulatory measures: Yes
    • Carve-out for compulsory licenses in conformity with WTO: Yes
• Protection from strife
  • Specifications
    • Relative right to compensation (comparator): MFN and NT
    • Absolute right to compensation in certain circumstances: No
• Transfer of funds
  • Includes transfer of funds: Yes
  • Exceptions to the transfer of funds obligation
    • Balance-of-payments exception: Yes
    • Other specific exceptions (e.g. to protect creditors, etc.): Yes
• Prohibition of performance requirements (PRs)
  • Includes prohibition of PRs: Explicit PR clause
  • Type of PR clause: List of prohibited PRs
• Umbrella clause: No
• Entry and sojourn of personnel (subject to local laws): Yes
• Senior management (nationality): Yes

Other Clauses

• Transparency
  • Directed at States (obligation to publish laws and regulations): Yes
  • Directed at investors: Yes
• Health and environment (any mentioning in the text, except preamble): Yes
• Labour standards (any mentioning in the text, except preamble): No
• Right to regulate (any mentioning in the text of this or similar concepts, except preamble): Yes
• Corporate social responsibility (any mentioning in the text, except preamble): No
• Corruption (any mentioning in the text, except preamble): No
• Not lowering of standards (typically environment and/or labour standards): Yes
• Subrogation clause: Yes
• Non-derogation clause (in case of IIA’s conflict with other norms, more favourable rules apply to investors): No
• Investment promotion
  • Reference to specific promotion activities in text of agreement (not preamble): Yes

Exceptions

• Essential security exception
  • Exception included: Yes
  • Exception defined (exceptional circumstances described in more detail): Yes
  • Exception self-judging: Yes
• General public policy exceptions
  • Public health and environment: No
  • Other public policy exceptions (e.g. cultural heritage, public order, etc.): No
• Prudential carve-out (concerns financial measures): No
• Scheduling and reservations (in treaty texts and annexes): Negative-list reservations

State-State Dispute Settlement (SSDS)

• SSDS included: Yes

Investor-State Dispute Settlement (ISDS)

• ISDS included: Yes
• Alternatives to arbitration: Voluntary ADR (conciliation / mediation)
• Scope and consent
  • Scope of claims: general approach (chapeau paragraph of ISDS clause): Covers treaty claims only
  • Limitations to the scope of ISDS
    • Limitation of provisions subject to ISDS: No
    • Exclusion of policy areas from ISDS: No
    • Special mechanism for taxation or prudential measures: Yes
  • Type of consent to arbitration: Provides express or implied consent
• Forums
  • ISDS forum options
    • Domestic courts of the host State: No
    • ICSID: Yes
    • UNCITRAL: Yes
    • Other forums: Yes
  • Relationship between forums: "Fork in the road"
• Other specific ISDS features
  • Limitation period for submission of claims: Yes
  • Provisional measures: Yes
  • Consolidation of claims: Yes
  • Limited remedies (specifying available types of remedies): Yes
  • Treaty interpretation
    • Affirms binding interpretation by contracting parties or their joint committee: Yes
    • Requires certain questions to be submitted to contracting parties (renvoi): Yes
    • Regulates submissions by non-disputing State party: Yes
  • Transparency in arbitral proceedings
    • Requires documents to be made publicly available: Yes
    • Requires hearings to be open to the public: Yes
    • Regulates amicus curiae submissions by third (non-disputing) parties: Yes

Institutional Issues

• Mechanism for consultations between State parties: No
• Institutional framework (committee): Yes
• Technical cooperation/capacity building: No

Treaty Duration, Amendment and Termination

• Treaty duration
  • Years of initial treaty term: Indefinite
• Automatic renewal: Indefinite term
• Amendment and termination
  • Unilateral termination
    • Includes modalities for unilateral termination: Yes
    • Length of notice period: Six months prior notice
  • Includes modalities for amendment or renegotiation: Yes
  • "Survival"/"sunset" clause length: None

• Originally mapped: 02-2024
• Mapped by: UNCTAD