Ecuador-U.S. trade in the balance after Snowden row

Aug. 16, 2013 at 6:04 PM   |   Comments

QUITO, Ecuador, Aug. 16 (UPI) -- Ecuador's trade with the United States is in the balance after a diplomatic row over the OPEC country's offer to grant former U.S. spy agency contractor Edward Snowden asylum before he got permission to stay in Russia.

Ecuador drew U.S. ire over its reported asylum offer to Snowden and made matters worse by renouncing benefits it has enjoyed since 1991 on about $5.7 billion a year of exports to the United States. Ecuadorian exports have included crude oil, seafood, flowers, fruit and vegetables.

Those exports are likely to continue but may now be subject to heavy taxation, with little indication that the trade arrangements can be patched up or previous privileges restored any time soon.

U.S. congressional opposition to Ecuador seems likely to block any early restoration of Ecuador's trade status.

Ecuador was able to export oil and other merchandise to the United States under the Andean Trade Preference Act, signed about 22 years ago and no longer considered valid.

The row began with U.S. lawmakers warning Ecuador it could lose trade privileges if it granted Snowden asylum. It escalated as Ecuador responded to U.S. warnings by renouncing the trade privileges.

Ecuador's reported offer to give Snowden asylum never got anywhere, but the diplomatic row dealt a further blow to already fraught relations between the two countries. In November 2012, Ecuador offered political asylum to WikiLeaks activist Julian Assange, who is staying at the country's embassy in London.

Despite diplomatic tensions, Ecuador has close trade ties with the United States and has about 100 U.S. companies active in different sectors in the country. About 15,000 U.S. citizens reside in Ecuador and more than 24,000 visit the country each year. Up to 200,000 Ecuador nationals live and work in the United States.

A deepening of the diplomatic tiff would likely cause widespread damage to both trade and social ties, analysts said. Ecuador's rebuff to the United States was not unanimously backed by everyone in the administration of President Rafael Correa.

But an undercurrent of dissent over the Snowden affair and the continued impasse over Assange's indefinite stay at the London Embassy went unheeded.

Correa's anti-U.S. rhetoric has won him approval of the left-wing political elite in Quito but business leaders said the economy would be hurt by an end to U.S. trade privileges. There have been warnings of large-scale job losses, especially in small businesses that depend on exports to the United States. The sector most likely to be hit is said to be Ecuador's cut flower export industry.

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