Ministry of Economy, Trade and Industry
Font Size Change
S
M
L

Joint Press Release with the Ministry of Foreign AffairsSigning of the Japan-Uruguay Investment Agreement

On January 26, 2015, H.E. Ms. Keiko Tanaka, Ambassador Extraordinary and Plenipotentiary of Japan to Uruguay, and H.E. Mr. Luis Alberto Porto, Acting Minister of Foreign Affairs of the Oriental Republic of Uruguay, signed the Agreement between Japan and the Oriental Republic of Uruguay for the Liberalization, Promotion and Protection of Investment (Japan-Uruguay Investment Agreement) in Montevideo, Uruguay.

1. Purpose and effects of the Japan-Uruguay Investment Agreement

1) Investment protection and development of an investment environment

The Agreement stipulates rules for investment protection and development of an investment environment. Improving the legal stability of the investment environment in Uruguay is expected to facilitate investment activities by Japanese enterprises in the country.

2) Strengthening the Japan-Uruguay relationship

Among South American countries, Uruguay has the highest GDP per capita in addition to the lowest level of political corruption. This Agreement is the first investment agreement between Japan and a member country of MERCOSUR. As Uruguay serves as a distribution hub for MERCOSUR’s impressive market, many Japanese companies are highly interested in the country as an overseas base through which to develop business. Considering this situation, the agreement is expected to contribute to strengthening the bilateral economic relationship.

2. Key points of the agreement

The Agreement includes the following provisions in order to improve the legal stability of the investment environment:

1) National treatment

The Agreement stipulates an obligation under which a contracting country should treat an investor of the other contracting country and such investor's investments no less favorably than the contracting country's own investors and their investments.

2) Most-favored-nation treatment

The Agreement stipulates an obligation under which a contracting country should treat an investor of the other contracting country and such investor's investments no less favorably than investors of a third country and their investments.

3) Extensive prohibition of the performance requirements

As a condition for investments and investment activities of an investor of the other contracting country, this provision prohibits the contracting country from requiring the investor to provide the former with certain performance, including local-content requirements, export requirements, and technology transfer requirements.

4) Investment protection provisions, including compensation in expropriation, protection from strife, and free transfers

5) Settlement of investment disputes between the contracting countries and investors

When an investor suffers damage from the contracting country that the investor has invested in due to that country’s breaching of its obligation under the Agreement, the investor may submit the dispute with the country to an international arbitration procedure for settlement.

References

1: MERCOSUR

MERCOSUR is a customs union comprised of Brazil, Argentina, Uruguay, Paraguay, Venezuela, and Bolivia. It has established a free trade zone with the basic principle of zero tariffs imposed on trade within the union. The union has a GDP of approximately 3.2 trillion dollars and a population of approximately 290 million.

2: Background of the negotiations

In November 2012, both sides agreed to start negotiations on an investment agreement. After having held nine meetings for negotiations, in November 2014, they concluded a substantial agreement.

3: Articles of the Japan-Uruguay Investment Agreement are to be announced on the websites of the Ministry of Economy, Trade and Industry (METI) and the Ministry of Foreign Affairs (MOFA):

Ministry of Economy, Trade and Industry (METI) and the Ministry of Foreign Affairs (MOFA): METI website on Economic Partnership Agreements (EPA)/Free Trade Agreements (FTA) (investment agreements):
http://www.meti.go.jp/english/policy/external_economy/trade/FTA_EPA/index.html

Release date

January 27, 2015

Divisions in charge

  • Information on Uruguay and the regions
    Latin America and Caribbean Office, Trade Policy Bureau
  • In formation on the Japan-Uruguay Investment Agreement
    Economic Partnership Division, Trade Policy Bureau

Related Information

IIA

Regional Affairs / Uruguay

Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
Copyright Ministry of Economy, Trade and Industry. All Rights Reserved.