Ecuador’s trade status under fire from industry groups, congressmen

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Michael Bastasch Contributor
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Last week industry groups called on the Office of the U.S. Trade Representative to withdraw or suspend Ecuador’s trade benefits.

Ecuador currently receives a special status under the  Andean Trade Promotion and Drug Eradication Act, which grants four South American countries duty-free access to a wide range of exports in order to help them fight drug production and trafficking by fostering economic development.

“Ecuador has demonstrated its lack of regard for due process and the rights of U.S. persons who have invested in Ecuador,” writes Edward B. Scott, vice president and general counsel of Chevron, in a letter to the Office of the United States Trade Representative.

“Accordingly, the President should promptly withdraw or suspend Ecuador’s beneficiary country designation,” Scott concluded.

The U.S. Chamber of Commerce and the National Association of Manufacturers have also called into question Ecuador’s eligibility for trade preferences.

“Trade preferences like this are a privilege, not a right, and Ecuador has continued to flout its international investment commitments,” writes the Chamber of Commerce.

“The rule of law in Ecuador has continued to deteriorate and until the government of Ecuador demonstrates the political will to meet the criteria set forth by the ATPA, their benefits should be withdrawn,” the Chamber added.

“To continue granting Ecuador preferential treatment under ATPA despite its failure to meet such standards,” writes Jessica Lemos, director of international trade policy for the National Association of Manufacturers, “would send a dangerous message to other nations that they can disregard the basic eligibility criteria without consequences, thereby diminishing the incentive that nations have to live up to their international obligations.”

Enacted in 1994, the Andean Trade Preference Act aimed to help Bolivia, Colombia, Ecuador and Peru fight against drug production and trafficking by helping their economies. In 2002, ATPA was renewed and amended and became the ATPDEA.

Bolivia was suspended from the ATPA in 2008 because it failed to meet eligibility criteria, and Peru and Colombia have since left the program due to the approval of Free Trade Agreements with the U.S.

Ecuador is the only country still receiving trade preferences under the ATPA. Ecuador’s benefits expire on July 31, 2013 and must be renewed before then.

Even members of Congress have called into question Ecuador’s trade status for its treatment of U.S. companies and poor record on human rights.

Indiana Republican Sen. Richard Lugar wrote the U.S. Trade Representative, expressing concerns over Ecuador’s failure to comply with court orders issued by an international court, saying that “the Ecuadorian government was wrong to accuse Chevron of being responsible for environmental and social harms in the Oriente region of Ecuador.”

Chevron has been locked in an $18 billion legal battle with environmental groups over environmental damage allegedly caused by Texaco Petroleum Company from 1964 to 1992 while it operated in partnership with the state-owned oil company PetroEcuador — though Chevron did not acquire Texaco until 2001.

“The Chevron thing is essentially one of [Ecuadorian President Rafael Correa’s] personal projects to shake down an American company using the corrupt courts in Ecuador,” Roger Noriega, former ambassador to the Organization of American States and former Assistant Secretary of State, told The Daily Caller News Foundation.

“That very transparent campaign has been noticed by U.S. federal judges… they recognize that Correa’s kangaroo courts are being used to persecute and shake down Chevron,” Noriega added.

In late July, Florida Republican Rep. Connie Mack introduced bipartisan legislation condemning the human rights and democracy record of the Correa administration, and also the government’s business and security practices.

Florida Republican Rep. Ileana Ros-Lehtinen, chairman of the House Foreign Affairs Committee, also sent a letter in August to the State Department urging them not to extend trade benefits to Ecuador because of its human rights record, poor business practices and cozying up to U.S. adversaries.

“As Correa continues his power grab at the expense of the Ecuadorian people, he has positioned himself as a close ally of the dangerous Iranian regime, threatens USAID programs, and continues to undermine U.S. interests in the region,” Ros-Lehtinen wrote.

“Additionally, U.S. companies face an increasingly difficult business environment, including high levels of corruption in the judicial branch which has resulted in a lack of safeguards against the threat of expropriation,” she continued.

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