The EU–Mexico Global Agreement
On 22 May 2026, the European Union and Mexico signed the Modernised Global Agreement (MGA) and an accompanying interim Trade Agreement (iTA). The MGA modernizes the original EU–Mexico Economic Partnership, Political Coordination and Cooperation Agreement (commonly known as the "Global Agreement") which entered into force in 2000. The MGA is yet to be ratified by the Mexican Senate.
The Original Global Agreement (2000)
The Global Agreement was signed on 8 December 1997, and came into force in 2000. It did not contain dedicated provisions on areas now considered essential, such as data protection, investment protection at the EU level, and enforceable sustainable development commitments. Investment protection between EU Member States and Mexico was instead governed by a network of approximately 14 bilateral investment treaties (BITs) between individual EU Member States and Mexico.
The Modernised Global Agreement (2026)
The modernised treaty, formally titled the "Political, Economic and Cooperation Strategic Partnership Agreement," is significantly broader in scope than its predecessor. It is laid out in two parallel legal instruments: (a) the MGA itself, which includes a political and cooperation pillar as well as a trade and investment pillar (including investment protection); and (b) an interim Trade Agreement covering matters of exclusive EU competence, which will expire once the MGA is fully ratified.
Key Features of the MGA
Investment Protection
The MGA consolidates investment protection at the EU level within Chapter 10 (Investment), which includes substantive protections such as fair and equitable treatment, protections against expropriation, provisions on transfers, and compensation for losses. The MGA expressly recognises the right to regulate in the public interest and clarifies that the mere exercise of regulatory powers does not constitute a breach of the treaty's investment protections. Upon the entry into force of the MGA, the existing bilateral investment treaties between EU Member States and Mexico will be superseded.
State-to-State Dispute Settlement
The MGA contains a dedicated state-to-state Dispute Settlement chapter (Chapter 31), accompanied by detailed Rules of Procedure and a Code of Conduct. The modernised mechanism is designed to address disputes on the interpretation or application of the MGA's trade and investment provisions, with the objective of establishing "an effective, fair and predictable dispute settlement mechanism". The Trade and Sustainable Development chapter's commitments are subject to their own specific dispute settlement procedure, enforceable by independent expert panels. The Global Agreement's dispute resolution provisions were more limited in scope.
Investor-State Dispute Settlement (ISDS): From Ad Hoc Arbitration to the Investment Court System
This is the most significant structural change in the modernised treaty. Under the original framework, investor-state disputes were resolved through ad hoc arbitration under the applicable bilateral investment treaties, typically under ICSID or UNCITRAL rules, with each party entitled to appoint its own co-arbitrator.
The MGA replaces this system with a permanent Investment Court System (ICS). The key features are as follows:
- Mandatory pre-arbitral steps. Before proceeding to the Tribunal, the investor must first engage in consultations with the respondent State.
- Permanent Tribunal. The ICS establishes a permanent first-instance Tribunal comprising nine members—three nationals of EU Member States, three nationals of Mexico, and three nationals of third countries—appointed by the Joint Council for five-year terms. Cases are heard in divisions of three members, with one EU national, one Mexican national, and a third-country national as chair. This removes the parties' traditional right to appoint their own arbitrators.
- Appeal Tribunal. A permanent Appeal Tribunal, comprising six members, is empowered to review first-instance decisions on grounds of errors in the interpretation of the law, manifest errors in the appreciation of facts, improper constitution, excess of powers, corruption, serious breaches of due process, and failure to state reasons.
Transition Provisions
The existing bilateral investment treaties between EU Member States and Mexico remain fully operative until the MGA enters into. The MGA provides that, upon its entry into force, the existing BITs listed in Annex 10-C will be terminated and superseded.
