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Judi Lynn

(161,324 posts)
Fri Oct 28, 2022, 09:03 PM Oct 2022

U.S. Pressuring New Left-Wing Honduras Government

After the Honduran government fulfilled a campaign promise by moving to end an extreme form of special economic zone, two U.S. senators threatened to withdraw foreign aid to the country.



People demonstrate against a proposed economic development zone that would forcibly relocate coastal communities from La Ceiba, in Honduras, May 31, 2021.

Honduran President Xiomara Castro, who took office in January, promised on the campaign trail to abolish special economic zones known as ZEDEs (“Economic Development and Employment Zones” in English), where private investors have outsized power to shape labor laws, judicial systems, and local governance. These zones have garnered fierce opposition in Honduras for undermining the basic tenets of democracy.

In April, she achieved a major win when the Congress of Honduras unanimously voted to repeal the law that allows for ZEDEs, and to abolish the current ones, though the latter has to be ratified next year. But the forces who want to keep ZEDEs in operation are retaliating, and they’ve found allies on Capitol Hill.

Earlier this month, Sens. Bill Hagerty (R-TN) and Ben Cardin (D-MD) called on U.S. Secretary of State Antony Blinken to act against the Honduran government for moving to get rid of ZEDEs. In doing so, the senators are citing the findings of an influential think tank, the Center for Strategic and International Studies (CSIS), which has received direct support from a U.S.-based company that is invested in one of the ZEDEs.

The senators are not the first federal players to rebuke the Honduran government. In July, the State Department issued its own condemnation of Castro’s move to eliminate ZEDEs, and intimated that the government could be violating two trade agreements, the Dominican Republic–Central America Free Trade Agreement (CAFTA-DR) and a U.S.-Honduras bilateral investment treaty (BIT). “The government has exposed itself to potentially significant liability and fueled concerns about the government’s commitment to commercial rule of law,” the State Department’s “investment climate statement” asserts.


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