Mexico: follow Honduras or Ecuador?
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by Manuel Pérez Rocha* | 11 March 2024
Mexico: follow Honduras or Ecuador?
The Secretary of Foreign Affairs, Alicia Bárcena, said with aplomb, before the plenary session of the last Celac summit, on March 1, in the Caribbean islands of Saint Vincent and the Grenadines: “We need a new style of development, which overcome extractivism, that we commit to industrialization with sustainability; that we commit to food and energy self-sufficiency with our own resources.” She added that Mexico is “recovering its sovereignty and the role of the State”.
Bárcena’s speech coincides with the Kingstown Declaration, signed by the 33 countries that make up Celac, which focuses on strengthening regional integration. But there is a crucial point in it that welcomes the adoption of the United Nations General Assembly Resolution against “Unilateral economic measures as a means of exerting political and economic pressure on developing countries”. However, it seems to continue to be a taboo subject in Celac to recognize that the greatest coercive measure to exert economic and political pressure is, in practice, free trade agreements (FTAs) and bilateral investment treaties (BITs) - which underpin transnational extractive corporations in their insatiable ambition to take over our natural resources.
The president of Honduras, Xiomara Castro, did have the audacity to denounce the “tax havens and international arbitration centers that violate our sovereignty and impoverish our people”, during the ceremony of assumption by Honduras of the pro tempore presidency of Celac. It was not mere speech; On February 24, her government sent the World Bank a notice of denunciation of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. In other words, Honduras will leave the ICSID!
Honduras was the second most in-demand country in the region in 2023 (nine), only after Mexico (10). The most exorbitant was filed by the American company Próspera, for 10.7 billion dollars, after the repeal of the euphemistically called employment and development zones (ZEDE), also called “model cities”, which are private tax havens, free of observe national laws, created under the drug dictatorship of the now on trial Juan Orlando Hernández.
The Platform of Social and Civil Organizations Latin America Better without FTA, currently coordinated by Chilean organizations, supports Honduras declaring that “the departure of the ICSID is a clear and forceful signal of the government of democratic refoundation led by President Castro, to call into question the privileges of foreign investors”. It is recommended that Honduras dismantle the scaffolding of corporate neocolonialism, reviewing its current Investment Protection and Promotion Law of 2011, as well as the FTAs and BITs of which it is a part, since they are current instruments that include the possibility of foreign investors suing to the State in other arbitration centers, beyond the ICSID.
Ecuador, in the opposite direction to Honduras, re-entered the ICSID in 2021, under the government of banker Guillermo Lasso. He had retired in 2009 during the presidency of Rafael Correa, when he was facing corporate lawsuits – mainly oil companies – for more than 10.8 billion dollars. Ecuador’s re-entry into the ICSID is a true setback as described by members of the Commission for the Comprehensive Citizen Audit of the Reciprocal Investment Protection Treaties and the International Investment Arbitration System (Caitisa.org), which began in October of 2013 and concluded that Ecuador’s entry into the ICSID was harmful. “We had entered into an investment protection network where the interests of transnational corporations were above human rights and those of nature” .
Now right-wing President Daniel Noboa has called for a referendum on April 21 on issues from security to migration. But one is about the modification of article 422 of the 2008 Constitution that prohibits the government, based on Caitisa’s conclusions, from signing new international agreements that include supranational lawsuit mechanisms for foreign investors, including in the FTA with the US that they so desire. the new conservative governments of Ecuador. The question in the referendum is tricky: “Do you agree that the Ecuadorian State promotes foreign investment and recognizes international arbitration as a method to resolve investment disputes […] so that foreign investors are offered a “appropriate environment of legal security that generates greater employment opportunities and strengthens dollarization?”
In 2018, the Secretary of Economy Ildefonso Guajardo, in the last breaths of the Peña Nieto government, signed the ICSID agreement, which Mexico had resisted entering, with the same trap that "the signing of this instrument will strengthen the position of Mexico as a safe, reliable and attractive country for investments, which protects and promotes foreign investment, providing greater legal certainty to national investors abroad and foreigners in our country”. In reality, the objective was to leave the incoming Q4 government tied to the interests of the large transnationals. The question for the next government is: will it continue the neoliberal model under the FTAs and BITs that pledge our sovereignty in courts like the ICSID? Or will he act with courage and firmness like Castro, and join him in beginning a regional process of dismantling and liberating these neocolonial treaties and supranational courts?
*Researcher at the Institute for Policy Studies www.ips-dc.org and Associate at the Transnational Institute www.tni.org
