Credit: REUTERS/LUISA GONZALEZQUITO, June 21 (Reuters) - Ecuador said on Monday that it had signed an agreement to rejoin the World Bank's arbitration tribunal more than a decade after it left, part of recently installed President Guillermo Lasso's strategy to attract more investment to the Andean nation.
Lasso, a conservative former banker who took office on May 24, says the move to join the International Centre for Settlement of Investment Disputes (ICSID) will revive the oil-producing South American country's economy, which suffered a recession in 2020 due to the impact of the coronavirus pandemic.
"This important step will allow Ecuador to establish new trade partners, and to strengthen the relationships with those it already has," Lasso's office said in a statement. "The agreement will help attract responsible investors committed to contribute to the country's development."
The statement added that some countries with whom it is evaluating free trade agreements, such as Mexico, have conditioned any potential deal on Ecuador joining ICSID. Lasso is seeking to bring Ecuador into the Pacific Alliance trade bloc consisting of Chile, Colombia, Mexico and Peru.
Ecuador had left the in 2009, with former leftist President Rafael Correa arguing Ecuador's membership was tantamount to the state's "ceding of sovereign jurisdiction" to an international body. That came after several oil companies brought cases against Ecuador to ICSID over a 2007 change in the tax rules that they said conflicted their production contracts.
The law reserved up to 99% of excess income from crude sales for state coffers. Ecuador earlier this month said it would pay French oil company Perenco $374 million to satisfy an ICSID award over the 2007 decree.
In a news release, the World Bank said Ecuador's re-entry must still be "ratified." The country's constitution says the National Assembly must ratify international alliances. Lasso's allies lack an outright majority in the National Assembly.
(Reporting by Alexandra Valencia Writing by Luc Cohen; Editing by Aurora Ellis)
((luc.cohen@thomsonreuters.com; +58 424 133 7696; Reuters Messaging: Twitter: @cohenluc))
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