Honduras is set to withdraw from the World Bank’s International Center for Settlement of Investment Disputes (ICSID) on August 25, a significant departure from its trade and investment policies of the past four decades. President Xiomara Castro's decision, announced in early March, comes amidst ongoing ICSID claims totaling at least $12 billion USD, equivalent to 40% of GDP or nearly three-quarters of the national budget. The move raises legal complexities as Honduras is party to multiple trade agreements, including CAFTA-DR, which specifies ICSID as the dispute forum. The government's rationale for withdrawal remains unclear, though concerns over investor-state dispute procedures have been voiced. Private-sector groups criticize the decision, anticipating economic repercussions and legal challenges. Meanwhile, discussions with China for a free-trade agreement suggest a strategic shift in Honduras' economic alliances. Despite skepticism about the move's long-term impact, it underscores the Castro administration's stance on national sovereignty and economic policy.
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