For decades now, Mexico has faced a battery of lawsuits under trade and investment treaties that allow private foreign investors to bypass domestic courts and sue governments in international arbitration tribunals.
It’s high time for President Claudia Sheinbaum to join with other Latin American leaders who are rejecting this corporate-driven, anti-democratic system.
One of the largest suits Mexico has ever faced is a pending claim from Alabama-based Vulcan Materials Company. In 2022, the Mexican government found evidence that Vulcan’s limestone quarrying operation on the Yucatán coast was causing severe damage to underground water tables and local ecosystems. The government halted operations and declared the area a protected natural zone.
Vulcan retaliated against the government’s efforts to protect the environment and public health by filing a claim for $1.9 billion in compensation. The company claims that Mexico’s actions violate the investment rules of the United States-Mexico-Canada Agreement.
With this case still pending, the U.S. House of Representatives has just ratcheted up pressure on the Mexican government by passing a bill to impose sanctions on governments that seize U.S. corporate assets.
In rare bipartisan action, the Defending American Property Abroad Act of 2026 passed by a vote of 247 (including 41 Democrats) to 164. The bill’s champion, Texas Republican August Pfluger, referenced the Vulcan case in his celebratory press release. The Senate has not yet voted on the bill.
On top of the Vulcan case, Mexico is facing a number of other expensive lawsuits over the government’s actions to ensure that their people benefit from extraction of lithium and other strategic minerals — instead of letting foreign corporations suck this natural resource wealth out of the country.
If Sheinbaum decides to finally take a stand, she would have important allies.
On March 25, Colombian President Gustavo Petro announced that his country, in the face of similar challenges to its sovereignty, will withdraw from the international arbitration system.
The Colombian leader’s historic decision comes after years of civil society advocacy. In 2023, more than 300 organizations called on the Colombian government to lead in the dismantling of a system that empowers transnational corporations, particularly in extractives industries, to destroy lives, ecosystems, and communities in which they operate.
A few weeks ago, 220 economic and legal experts, including renowned economists Joseph Stiglitz, Ha-Joon Chang, and Thomas Piketty, sent Petro a letter urging him to take this action. The letter also calls on him to use the upcoming First International Conference on Transitioning Away from Fossil Fuels in Colombia to galvanize coordinated international action to reject the investor-state system.
Enrique Daza, a founder of the Colombian Network Against Free Trade, had also recently sharply criticized the Colombian government for conducting officials reviews of its trade agreements with the United States and the European Union but without these reviews leading to a clear break with the arbitration system. Daza, a tireless fighter for Colombian sovereignty and fair trade in the hemisphere, died just days before Petro’s March 28 announcement.
Brazil would also be a strong partner. Latin America’s largest economy has never signed a trade agreement or investment treaty that gives private foreign investors recourse to supranational arbitration bodies. Sheinbaum’s just-announced meetingwith Brazilian President Luiz Inácio Lula da Silva this summer offers an opportunity to move forward.
Mexico, Brazil, and Colombia account for between 65 percent and 70 percent of the total GDP of Latin America and the Caribbean. This represents a far more powerful potential economic bloc than the rightwing governments from the region that have allied with President Donald Trump in his new so-called “Shield of the Americas.” These conservative-led nations account for not more than a quarter of the region’s combined GDP.
In terms of population, Brazil, Colombia, and Mexico are home to about 400 million inhabitants (60 percent of the region), while the “Shield” countries have just 160 million (24 percent).
No country can take on a system that benefits powerful transnational corporate interests alone. But together these three powerful nations could strike a strong blow to these anti-democratic rules and begin building an alternative that respects the rights of national governments to act in the interest of their own people and the environment.
This piece was originally published in La Jornada.
