Ending ZEDEs could hit investment in Honduras

Significance While many countries declare free trade zones or development areas, offering tax exemptions or other benefits in the hope of attracting investment, the ZEDE regime grants an extraordinary level of autonomy over the legal, fiscal, and security regimes within the zones. Impacts Castro’s lack of alternatives to a Chinese FTA will help Beijing extract favourable terms on investment deals. Officials may turn a blind eye to environmental and human rights issues to fast-track project announcements. A desire to maintain influence in Honduras could cause Washington to overlook links between the political elite and organised crime.