The Institutional Program of the Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT) 2025–2030, published by the Secretariat of the Navy in the Official Gazette of the Federation, represents one of the most ambitious regional development strategies in contemporary Mexico. Its primary objective is to consolidate a multimodal logistics platform that integrates ports, railways, highways, and industrial hubs across the south-southeast of the country. Through this plan, the federal government aims to transform a historically marginalized region into a competitive node for international trade, fostering territorial cohesion, productive diversification, and social inclusion.

Historical Background and Strategic Importance

The idea of linking the Gulf of Mexico with the Pacific Ocean through the Isthmus of Tehuantepec is not new. As early as the 19th century, various governments and entrepreneurs envisioned the potential of this narrow land corridor as a trade route connecting two oceans. The trans-isthmian route was inaugurated in 1907, offering an alternative to maritime routes that connected the east and west coasts of the Americas. However, its strategic significance declined after the opening of the Panama Canal in 1914, which quickly became the dominant interoceanic passage.

Throughout the 20th century, successive Mexican administrations revisited the idea, proposing projects such as the Puebla-Panama Plan in the early 2000s and the Special Economic Zones during the mid-2010s. Yet, these initiatives failed to establish a lasting logistics model due to fragmented planning, insufficient investment, and weak institutional coordination. The creation of the CIIT in 2019 marked a turning point. Its incorporation into the Secretariat of the Navy in 2023 and the reform enacted in May 2025 provided the corridor with a clear operational structure, defined powers, and a dedicated budget—essential elements for its long-term consolidation.

Territorial Scope and Demographic Potential

The CIIT’s area of influence encompasses 120 municipalities: 46 in Oaxaca, 33 in Veracruz, 31 in Chiapas, and 10 in Tabasco. Together, they cover nearly 22% of Mexico’s southern territory and are home to approximately 5.1 million inhabitants. Notably, 64% of this population is of working age, while 23% are young people aged 15-29—a demographic advantage that can fuel labor supply and innovation.

However, the region still faces significant structural challenges. Informality affects up to 80% of the workforce in states such as Oaxaca and Chiapas, and multidimensional poverty remains widespread. Despite progress—2.3 million people moved out of poverty between 2018 and 2024—income inequality, limited access to quality education, and infrastructure deficits continue to hinder equitable development. The CIIT’s socioeconomic strategy seeks to reverse these conditions by linking investment projects with inclusive employment and training programs.

Strategic Objectives and Policy Lines

The Institutional Program defines four main objectives that together form the backbone of the CIIT’s strategy:

Increase port operational capacity: The modernization of the ports of Coatzacoalcos, Salina Cruz, Dos Bocas, and Puerto Chiapas aims to expand handling capacity and improve competitiveness. The plan includes technological upgrades, dredging operations, and digital platforms to streamline logistics and customs processes. These ports are projected to strengthen connectivity with 82 international ports, including 15 of the world’s top 100.

Optimize mobility for people and goods: The program includes the rehabilitation of 1,200 kilometers of railway lines (Z, K, and FA), the expansion of the Trans-Isthmic Highway 185, and integration with the Maya Train and other national transport corridors. These projects will reduce transportation times, lower costs, and create new logistical linkages between the Pacific and the Gulf coasts.

Promote balanced economic growth: Through the creation of 12 Development Poles for Wellbeing (PODEBI), the CIIT aims to attract private investment and generate formal employment. These zones will offer fiscal incentives, access to energy and water infrastructure, and simplified administrative procedures. Each pole will specialize in different industries, from agribusiness and renewable energy to advanced manufacturing and logistics services.

Strengthen interinstitutional coordination: The program emphasizes the alignment of federal, state, and municipal policies. It also promotes social participation and transparent monitoring to ensure that development benefits reach local communities.

Economic Trends and Employment Generation

Between 2013 and 2018, the CIIT states experienced negative or stagnant economic growth. However, the 2019–2024 period marked a clear turnaround, with Oaxaca, Chiapas, and Tabasco showing significant progress. The number of formal jobs increased from 32,703 to 107,981 across the four states, a remarkable improvement in a region long characterized by informality and seasonal employment. Oaxaca in particular recorded positive growth in 22 of the last 24 years, although its contribution to the national economy remains limited at around 1%.

The CIIT seeks to consolidate this progress by linking infrastructure investment with vocational training and industrial development. Partnerships with educational institutions, including technological universities and polytechnic institutes, aim to align academic curricula with the needs of new industries established in the PODEBI zones.

Logistics Performance and Infrastructure Development

In 2024, the ports included in the CIIT handled around 21% of national cargo. Salina Cruz accounted for 4% of traffic in the Pacific basin, while Coatzacoalcos and Dos Bocas together represented 16.8% in the Gulf of Mexico. These figures underline the corridor’s growing relevance in Mexico’s maritime network.

Railway connectivity is centered on the Isthmus of Tehuantepec Railway (FIT), which operates three main lines: Z, K, and FA. The rehabilitation of these routes enhances multimodal integration, enabling the transfer of goods between trains, trucks, and ships. On the road network, Highway 185 has been expanded by 96.7 kilometers, including six new bridges and fifteen vehicle crossings, benefiting approximately 950,000 residents and improving regional accessibility.

Industrial Development and Private Investment

The PODEBI zones represent a cornerstone of the CIIT’s productive model. Strategically located along the corridor, they aim to attract national and foreign investment through preferential fiscal treatment and access to upgraded infrastructure. Each zone will promote a specific productive vocation: agro-industrial clusters in Oaxaca, petrochemical and logistics complexes in Veracruz, and renewable energy hubs in Chiapas and Tabasco.

In addition, the federal government has introduced digital tools to simplify business registration, facilitate land use management, and accelerate environmental permits. This is expected to reduce red tape and increase investor confidence. Early investors have already shown interest in sectors such as electronics assembly, automotive components, and green hydrogen production.

Toward a Comprehensive Regional Transformation

The Institutional Program of the CIIT 2025–2030 presents a coherent and long-term vision for the Isthmus of Tehuantepec. Its approach goes beyond physical infrastructure by integrating workforce training, trade facilitation, customs modernization, and social inclusion. If effectively implemented, the program could generate over 150,000 new formal jobs by 2030 and increase regional GDP by up to 2.5 percentage points annually.

Ultimately, the success of the Interoceanic Corridor will depend on interinstitutional coordination, sustained public and private investment, and the ability to translate logistics improvements into tangible opportunities for local communities. By linking ports, railways, highways, and industrial zones, the CIIT has the potential to reshape Mexico’s territorial dynamics—turning a once peripheral region into a vital logistics hub that strengthens national integration and enhances the country’s role in global trade networks.

The news of ongoing negotiations on a trade agreement between Argentina and the United States has dominated the headlines of political and economic media in recent weeks. Promoted by its advocates as a historic opportunity to integrate Argentina more deeply into the world economy, the proposed trade pact is now the subject of scrutiny. Industry analysts and sectoral leaders express concerns that the agreement, rather than boosting the country’s exports, could bring more risks than benefits to the national industrial fabric.

This trade relationship is based on unequal terms. The expression refers to the inequality between two countries at different levels of industrial development, production capacities, and technological advancement.

Negotiating Asymmetries

Although no official statement has been made, the Argentine government announced the trade agreement between Argentina and the United States as an initiative that could be considered “historic.” Negotiators reportedly seek a deal involving mutual tariff cuts and preferential access to certain sectors. In theory, such an arrangement could diversify and increase Argentina’s exports of agricultural and energy products and provide a new opening for North American investors in infrastructure, logistics, and technology. However, delving deeper into the numbers and sectoral distribution, one can see that the relationship between Argentina and the United States unveils a scenario of competition rather than complementarity.

Argentina’s trade balance is illustrative in this regard. For the period up to August 2025, the main destinations for Argentine exports were Brazil (USD 8.186 billion), China (USD 5.173 billion), the United States (USD 4.696 billion), Chile (USD 4.429 billion), and India (USD 3.408 billion). Shipments to the U.S. were led by fuel and energy, crude oil, gold, aluminum, and hormones. In exchange, it buys from the United States refined petroleum and gas, vaccines, and polymers. The profile of these products shows not only a clear technological gap between the two economies but also more than a relationship of commercial complementarity. Argentina exports raw or semi-elaborated material to feed the U.S. productive process while importing manufactured goods with higher added value. It is a paradigmatic case of the old-fashioned dependency model in which industrialization and knowledge creation are concentrated in the more developed partner.

Industrial sectors

Argentina’s productive fabric also faces challenges with this trade agreement between Argentina and the United States. A significant portion of Argentina’s economy, especially the automotive, petrochemical, pharmaceutical, and metal-mechanical industries, competes directly with its American counterparts. The United States has clear advantages in terms of production capacity, energy costs, and innovation.

The provinces of Buenos Aires (PBA) would be the most vulnerable in the event of a relaxation of tariff barriers, as they concentrate the country’s largest industrial belt. Buenos Aires is responsible for around a quarter of the national export basket of manufactured goods. These are predominantly transport equipment and auto parts, which are sold mostly to Mercosur markets. The opening of these sectors to direct competition from U.S. producers would put at risk tens of thousands of jobs, especially in municipalities linked to these factories and supplier chains. Argentine manufacturers of automobiles and auto parts, in particular, could lose competitiveness without the protection mechanisms currently in place within Mercosur. U.S. cars and spare parts are cheaper and technologically more advanced, which would displace Argentine producers and contribute to deindustrialization in a productive pole that underpins a large part of the national employment structure.

Mercosur Commitments

Mercosur, with which Argentina maintains a strong trade relationship, poses another set of challenges to the trade agreement between Argentina and the United States. As a customs union, Mercosur’s rules prevent members from signing bilateral free trade agreements on their own, without exceptions negotiated at the bloc level. Such a move could create diplomatic tensions within Mercosur, where past attempts by individual member states to sign external deals have been rebuffed.

The unequal negotiating position could also lead to the imposition of “asymmetric” conditions on the Argentine side. The U.S. free trade agreements include clauses on the protection of intellectual property, security of investments, dispute settlement mechanisms, and alignment of regulatory frameworks. This could limit Argentina’s policy autonomy and subject it to potential lawsuits under international arbitration rules. The inclusion of “sunset clauses” or “negative lists” (which would exempt sensitive sectors from liberalization) could, in theory, reduce the impact. However, the application and enforcement of these lists are often the subject of complex bureaucratic processes. Argentina’s negotiating leverage will be limited, and it may not be able to extract such guarantees.

Winners and Losers

Nonetheless, it would be overly simplistic to predict that everything that comes out of a trade agreement between Argentina and the United States would necessarily have a negative impact on the national economy. On the contrary, and as already mentioned, certain sectors could gain from an expansion in their access to the U.S. market. Argentina’s energy sector could be one of the great beneficiaries of a trade agreement between Argentina and the United States, with the opening of the U.S. market to liquefied natural gas (LNG) exports, lithium, or biofuels. On the other hand, the agrifood industry could find better conditions for its products, such as soybean meal, corn, wine, or citrus.

Likewise, extractive industries, and especially lithium mining in the provinces of Jujuy, Salta, and Catamarca, could benefit from new U.S. investments due to Washington’s interest in diversifying the supply of minerals necessary for its green energy technologies. In the same way, biotechnology and renewable energy projects may also find a better scenario for financing if the agreement includes formulas to encourage capital flows and technology transfers. The benefits, however, are not distributed equally across the board. If in the primary sector there are gains to be expected, the secondary sector, and especially the services sector, risks being left in the shade. Such an agreement could polarize Argentina even more, accentuating internal economic asymmetries that separate an export-promoted and currency-rich geography from industrial provinces like Buenos Aires, closer to the real economy.

Strategic Safeguards

If Argentina wants to take advantage of the opportunities that a trade agreement between Argentina and the United States could provide, it will need to strategically secure certain conditions during the negotiation process. These include phased liberalization with gradual tariff reductions that give domestic industries time to adjust; explicit exclusion of sensitive sectors such as the automotive and pharmaceutical sectors from immediate liberalization; reciprocity guarantees on investments that require U.S. investments to enter to incorporate value into the local chain, not to substitute it; technology transfer mechanisms that promote joint ventures and research and development partnerships, not just simple import substitution; and clauses preventing social and ecological dumping by guaranteeing fair labor and sustainability practices.

Without such conditions, the agreement would only increase Argentina’s dependency on raw material exports and weaken its industrial capacity.

Friendship Agreement or Rivalry

In sum, the trade agreement between Argentina and the United States could be a gateway or a booby trap. On the one hand, if the process is well managed, it can diversify Argentina’s export basket, attract investment, and open a direct line of negotiation with the most powerful economy on the planet. On the other hand, a poorly structured agreement could deepen structural imbalances, weaken the country’s productive apparatus, and reduce its policy space. For Argentina, the key will be to negotiate its position as a sovereign state that defends its national interest, prioritizes productive development, and re-industrializes as a primary national objective and not as a short-term diplomatic or political objective. The risks of a poorly done agreement include the possibility of opening up the country to deindustrialization, massive job losses, and fiscal exposure to uncontrollable risks. A well-structured and strategically balanced agreement, on the other hand, could be a key step towards a long-awaited process of modernization and sustainable development. In short, whether the United States is a true strategic ally or a potential rival will be defined by Argentina and its ability to assert its economic interests, defend its industries, and demand reciprocity in the opening of markets and the exchange of knowledge. Much is at stake, and the outcome of these negotiations will shape Argentina’s future role in the international economic order for generations to come.

In July of 2025, the Legislative Assembly approved a new piece of legislation, known as the Robotics Law, which is why El Salvador is the first country in the world to adopt a legal regime of its own to regulate this new technology. The purpose of the new regulation is to drive technological modernization, attract foreign investment, and develop new educational programs in the area of artificial intelligence (AI).

This move seeks to not only become a reference in the region but also to lay the foundations of an ambitious process of economic transformation that will move away from the chronic dependence on remittances and low added–value sectors.

The process contemplates, among other elements, the attraction of foreign capital, the modernization of national production, and the development of a highly qualified workforce. But it also implies the overcoming of deep structural problems, such as the multimillion-dollar investment that it initially requires, the need to upgrade technological infrastructure, and the urgency of designing a series of policies to prevent automation from aggravating existing social inequality.

Diversifying the Salvadoran Economy

One of the first benefits of this legal package will be economic diversification. To date, more than 20% of Gross Domestic Product (GDP) in El Salvador depends on the amount of remittances sent by Salvadorans residing abroad, and a large part of its exports comes from activities of low added value, such as agriculture or the maquila industry.

With the entry into force of the new framework, the Executive Branch hopes to open the door for high–added value activities such as industrial automation, robotics applied to health, and smart agriculture, among others.

In the first case, agricultural robots would be implemented for crop monitoring, intelligent irrigation management, or pest detection using sensors, among others. The idea is to help improve productivity, reduce costs, and, in this way, improve competitiveness in foreign markets.

In the case of industry, the installation of automated assembly lines could improve the efficiency of maquilas, but at the same time, diversify production to goods with greater technological complexity.

Pulling in Foreign Investment

But the ambition of El Salvador is even greater, because with this regulation, it wants to position itself as a regional technological benchmark. The mere existence of a specific norm that regulates and provides legal certainty for the operation of robots and AI systems is, in itself, an incentive for international companies interested in expanding into the region.

In a global environment in which technology companies are interested in regulatory frameworks and also in macroeconomic stability, El Salvador is in a good position to capture new capital. If it succeeds in attracting multinationals from robotics or automation, this would result in the creation of quality jobs, the transfer of knowledge, and new value chains. In this way, robotics in El Salvador is already one of the central pillars of the country’s long–term strategy for economic diversification.

Advancing in Key Sectors

The new legislation, meanwhile, opens the way to improvements in strategic areas:

• In health: surgical or rehabilitation robots could reduce waiting times and expand care to both private and public hospitals.
• In industry: automation would improve maquila productivity and transform them into centers of advanced manufacturing.
• In public services: robots could be used for urban cleaning, infrastructure maintenance, and environmental monitoring, among others, optimizing the spending of state resources.

Each of these advances will not only improve efficiency but will also help to increase the country’s competitiveness compared to its regional neighbors.

Education and Human Capital

A central axis of this strategy is talent generation. The norm is being accompanied by educational programs in AI and robotics for children, young people, and professionals. The main objective is to prepare new generations to participate in a globalized job market where technological skills are in increasing demand.

In this way, training local engineers and technicians, among others, would reduce the need to hire foreign consultants and also open the possibility for El Salvador to export technological services. But beyond that, it would create a virtuous cycle in which education boosts innovation and, in turn, stimulates the generation of wealth. Robotics in El Salvador will depend increasingly on a qualified workforce capable of designing, operating, and maintaining complex systems.

The Costs of Modernization

But there is a price to pay for all this. The construction of research laboratories, the installation of advanced digital infrastructure, such as 5G networks or data centers, and the execution of training programs will require billions of dollars in public and private investment.

At present, the Central American nation dedicates only about 0.2% of its GDP to research and development (R&D). By way of comparison, South Korea invests more than 4.5%. For this ambitious plan to take off, it will be necessary to multiply the budgetary efforts, as well as to capture foreign capital willing to finance the transition.

Another challenge has to do with the risk of social inequality. If robotics projects are concentrated only in major urban centers such as San Salvador or Santa Tecla, this could lead to leaving out rural areas. For this reason, it will be necessary for the government to promote that innovations reach small farmers or microentrepreneurs.

In addition, concern is also expressed about a possible loss of jobs, since automation will end up replacing tasks of routine character in manufacturing or services, with the risk that thousands of low–qualified workers are left without work. The solution to this problem is in the design of labor retraining policies that prepare workers for new occupations related to the operation, programming, and maintenance of robotic systems.

The Regulatory and Ethical Challenge

As a pioneer in the region, El Salvador has raised complex questions for the future. In case of doubt: who will be responsible if a surgical robot fails during an operation? Or how can we protect the data that machines are generating? What are the limits of the use of automated systems for security or surveillance?

The new law, in this regard, is only a first step. The country will have to update it in the coming years to address ethical and technical dilemmas that will arise. Without an adequate regulatory framework, there is the risk that innovation ends up running ahead of the regulation, creating uncertainty among both citizens and investors.

Balance

Economists are clear: the potential for growth is very high. If everything is done correctly, robotics could add an additional 2% or 3% to annual GDP growth over the next decade.

The counterpoint, however, is that in the short and medium term, the cost will be high—several percentage points of GDP over the next five years—to finance the expansion of the infrastructure, the training programs, and the design and application of a new regulatory structure. The risk–reward equation is clear: on the one hand, the investment is high, with high uncertainty. But on the other hand, the risk of continuing with an undiversified economy would be much higher in the medium term.

The approval of the Robotics Law has been a milestone in the history of El Salvador. Beyond being a gesture of modernity, what it represents is a commitment to a new economic model based on innovation and technology. In the end, the future of robotics in El Salvador will depend on the capacity for balance, between investment, inclusion, and education, to make sure that the benefits of automation are enjoyed in a fair way by all sectors of society.

CloudHQ, one of the world’s leading data center developers, has announced a significant $4.8 billion investment for the Mexico Plan that will lead to the development of six new data centers in Querétaro, Mexico. This large-scale infrastructure plan was confirmed by the Federal Government of Mexico’s Secretary of Economy and the Ministry of Economy. The $4.8 billion data center project will provide six large-scale data centers spanning 52 hectares and is one of the most significant private technology investments in Mexico’s history. “This means jobs with high added value. We are talking about 7,200 direct jobs and 900 indirect jobs that these six data centers will generate in Querétaro,” President Claudia Sheinbaum Pardo said. President Sheinbaum continued to note that, “Mexico is determined to receive large-scale investments of this type that have to do with the new productive specialization and the transformation that is currently underway in the country, whose objective is to move it towards greater productivity, greater capacity to manage and store data, and therefore, also towards greater international competitiveness.” As for the company, CloudHQ’s Chief Operating Officer, Keith Patrick Harney, announced that the six data centers combined will have a capacity of 900 megawatts (MW). The first phase of the project, representing 200 MW, has already been captured with support from the Federal Electricity Commission (CFE) and the National Center for Energy Control (Cenace), with a prior investment of $250 million.

Plans for an AI Future

According to the President of Mexico, this strategic investment in six new data centers will help the country to become one of the most important regional hubs for artificial intelligence, big data, and cloud computing in Latin America. As Sheinbaum said, “the data centers will be the basis for the future in artificial intelligence, they will be what gives us that possibility of an accelerated digital transformation of the country, which will allow us to strengthen automation, intelligent manufacturing, cybersecurity, data analysis, and the great industries of the future, like, for example, artificial intelligence.” The AI- and data-driven future that President Sheinbaum has discussed over the last few years also directly aligns with this Mexico Plan, which enables the country to host digital operations required by the global operations of foreign companies. One of the other factors Sheinbaum has noted for Mexico — and for this $4.8 billion investment — is energy. Sheinbaum has said, regarding the new Mexico Plan for 6 data centers, “It is one of the main factors, both in its availability and in sustainability issues. On this, we are working very closely with CFE and Cenace to provide competitive advantages in energy to companies like CloudHQ, which, as I mentioned, makes it a sustainable operation in that dimension.” Querétaro Governor Mauricio Kuri González, has also been present and noted, in a statement, that federal and local authorities have coordinated efforts to build an infrastructure strategy that will not only support the CloudHQ project but also other technology-related investments across the state. The strategy includes energy distribution, roads, and highways for access, as well as job training programs to connect local workers and communities to the new digital economy. Querétaro is already a target state for foreign investment from global technology companies, and now one of the largest technology clusters in Mexico after hosting the first six data centers of CloudHQ’s Mexico Plan.

CloudHQ’s Sustainability Focus

CloudHQ’s COO also announced their data center plans and the company’s commitment to sustainable development. Harney also noted, during the press event, that the first phase of 200MW has already been locked in with the CFE and Cenace and has been previously invested in with $250 million. The COO then also announced a number of other steps, including water-free cooling systems, along with compliance with the LEED gold and silver standards in the building and development of the six data centers. CloudHQ’s CEO, Pierre Fabre, in a release, noted that this relationship with the Mexican government will be important, saying, “We are proud of our relationship with the President of Mexico, which is already very productive, and we see that today we can work hand in hand for the country’s development.”

Preparing the New Generation

While the infrastructure for data centers and new technologies is important, the Mexican government is also looking for ways to connect and integrate local talent. As the Secretary of Economy, Marcelo Ebrard Casaubon, noted, “The country is not just focused on receiving foreign investment but also preparing Mexico for an economic model in which artificial intelligence plays a relevant role in our daily lives.” The secretary added, “We are talking about the 6G networks, which will take us in the short term, of course, because in the medium term we are going to be much more connected, with artificial intelligence in transport and telecommunications, which is what we see in airplanes, in their trip systems, even in your refrigerator if it is connected to the internet, or in your cell phone with ChatGPT, all of that will require the type of data centers that we are about to build and start operating.” The Ministry of Economy in Mexico has been working with the Secretariat of Public Education (SEP) in preparation and implementation of a training and job placement program for recent university graduates. These training programs will be focused on being able to work, operate, and maintain these types of digital infrastructure developments.

In recent months, Free Trade Zones in Uruguay have expressed their strong opposition to the introduction of the Domestic Complementary Minimum Tax, known as the Global Minimum Tax of 15% that has been proposed in the draft Budget Law for the four-year period of 2025 to 2029. In a formal statement issued by the entity, they affirm that the inclusion of Articles 628 and 662 in the Budget Law would put at risk the stability of the free trade zone regime and consequently, the predictability and legal certainty to which our country is accustomed; it would expose the country to international litigation processes and place Uruguay at a disadvantage with its main competitors in the region.

In this blog post, we want to delve into the points raised by the Chamber in this important debate, analyze the risks and benefits of applying the Domestic Complementary Minimum Tax, and explain why Free Trade Zones continue to be a key pillar of the country’s economic model.

Forty Years Fostering Competitiveness

It is not the first time that Free Trade Zones in Uruguay express their discontent with a measure they deem harmful to the stability of the regime. As stated, the free trade zone framework in the country was defined by the democratic authorities that returned to the country in 1985, as a State policy, meaning a policy that is not meant to change with the incoming governments.

One of the main purposes of the free trade zone regime, then and now, is to contribute to the competitiveness of the country in order to attract and retain high-value investments. The economic value added by the free trade zones can be measured in several ways. According to data from the Chamber of Free Trade Zones in Uruguay, in recent years, they have accounted for approximately 6.6% of GDP, 40% of total exports, and have indirectly created and directly maintained more than 66,000 jobs. But the contribution of the system extends beyond these figures, and it is based on them that they once again call for the stability of this key engine of the economy.

Uruguay has been recognized in recent years as a benchmark for the installation of new operations by international companies, in part because of the appeal and added value of the free trade zone system, through which companies with different business models and aimed at both national and international markets, in industries such as manufacturing, logistics, technology or global services, choose Uruguay as a platform to carry out their operations on a regional or even global scale.

The ecosystem of innovation, technological transfer, and management that they bring to the country becomes key in strengthening human capital and the productive fabric of the country.

On the other hand, the entry of multinational companies into Uruguay and the arrival of foreign professionals who work in them generate a positive multiplier effect on several sectors (housing, education, health, and others) and, with that, also increase economic activity in the country.

But that is not all, as Free Trade Zones claim that Uruguay is not losing revenue with the regime. On the contrary, using data provided by the Chamber of Free Trade Zones of Uruguay, every dollar of tax exemption in free trade zones generates more than seven dollars in added value for the national economy.

In other words, businesses that operate in the country under this regime not only purchase and subcontract nationally (generating income and jobs for Uruguayan suppliers), but they also contribute to the maintenance and improvement of infrastructure and generate additional economic activity in other sectors and with domestic companies that are dependent on export-oriented companies and their needs.

Legal Uncertainty and Contractual Risks

The Chamber’s statement also highlights that, in addition to the reasons mentioned above, the application of the tax, by including the provision of a Domestic Complementary Minimum Tax, would alter legal certainty, one of the values on which Uruguay has built its success in recent decades to attract foreign investment.

Specifically, Article 628 of the draft Budget Law for the period 2025-2029 includes a provision to modify Article 19 of Law No. 15,921, which means that, if approved, the Domestic Complementary Minimum Tax will no longer be subject to the tax exemptions enjoyed by companies with free trade zone authorization.

In this regard, the statement specifically affirms that “neither Article 628 nor Article 662 provides sufficient legal guarantees on the rights of companies with already signed contracts, violating acquired rights and predictability.”

The stability and clarity of the legal framework are not just semantic or technical issues. Companies decide to invest or expand in Uruguay based on these conditions. Any change that endangers this legal predictability can have negative repercussions on the credibility of the country. 

International Disputes

In the statement by the Free Trade Zones in Uruguay, another risk they highlight in the event that the change is approved is that the country would be exposed to international litigation processes, not only with investors that they contract with under free trade zone laws, but also under investment protection treaties.

The fact is that free trade zone contracts as well as investment protection treaties are not exempt from these clauses, and any change that does not respect the legal certainty to which these companies are entitled is exposed to being challenged in international forums.

Uruguay’s Free Trade Zones conclude this section of their formal statement, arguing that in addition to the above risks, the mere announcement of the new tax has already generated adverse publicity abroad, with international investors following developments in the country closely.

Threats to investment and jobs

The position of Uruguay’s Free Trade Zones is that the application of the proposed tax will lead to a reduction in new investment and may even lead to the dismantling of some companies already in the country, which would directly affect jobs, exports, and Uruguay’s competitiveness as a platform to serve the region and the world.

On the other hand, the statement points out that no other country in the region, except for Brazil, has approved the new tax, which means that to apply it now would place Uruguay at a competitive disadvantage within the Latin American region, where countries compete to attract high-quality foreign direct investment.

Does Uruguay have to apply the tax now?

Another argument made in the Chamber’s statement is that Uruguay is under no obligation to apply the new tax in the coming years.

In fact, the entity points out that large countries such as the United States, China, and India have not done so. The fact is that, in June, the G7 countries, which had promoted the measure, agreed to freeze its implementation.

In addition, several European countries that have implemented the tax in recent years have already admitted, in light of their experiences, that they regret having done so due to its negative impact on their economies. The OECD, the intergovernmental body that has promoted this type of measure, has not put pressure on Uruguay to do so either.

In this context, for Uruguay’s Free Trade Zones, the application of the new tax without a strategic purpose would be hasty, precipitate, and unnecessary. On the contrary, it is important to take a prudent approach, monitoring how the international debate on the subject evolves and acting at the appropriate time and when all the technical studies and positions are analyzed.

Free Trade Zones in Uruguay: A Permanent Pillar of Development

The position of Uruguay’s Free Trade Zones on the matter is based on the considerations mentioned above and, in its final paragraphs, reaffirms that free trade zones must remain a permanent pillar of the country’s development. The added value of the industry to the country, in terms of exports, high-quality job creation, and its role in integrating Uruguay into global value chains, has been proven over time.

In that sense, the Chamber of Free Trade Zones of Uruguay asks the National Parliament to eliminate Articles 628 and 662 of the 2025-2029 Draft Budget Law so that, together, they can preserve employment and competitiveness and Uruguay’s reputation in the region and the world. And it warns that protecting the stability of the free trade zone system is the only way to continue to have credibility and continue growing in the coming years.