LatinNews Daily - 2 August 2023

In brief: Costa Rica trade agreement constitutional, says Ecuador’s gov’t

* The trade agreement signed between Costa Rica and Ecuador in March is constitutional, Ecuador’s ministry of production, foreign trade, investment and fisheries has announced. This comes after Ecuador’s constitutional court (CC) said on 31 July that some articles of the agreement should be renegotiated, as they violate constitutional requirements. A statement by the ministry stated that the agreement “fully complies with the principles and guarantees” of Ecuador’s constitution. The statement accused the court of “expanding its power of interpretation” and of lacking coherence, as the court’s nine members were split, approving the ruling with a vote of five to four. The constitutional court ruled that a number of the agreement’s articles require Ecuador to relinquish its “sovereign jurisdiction” by allowing for international arbitration in disputes between the state and private individuals or legal entities. For example, the agreement opens the possibility for dispute resolution through the International Centre for Settlement of Investment Disputes (ICSID), an institution of the World Bank. The court ruled that this possibility is incompatible with article 422 of Ecuador’s constitution, which protects the country’s “sovereign jurisdiction” in the case of such disputes. According to the production ministry, the agreement signed on 1 March between Costa Rica’s President Rodrigo Chaves and Ecuador’s President Guillermo Lasso will lift tariffs on exports from both countries for approximately 97% of products.

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