COHA: Ecuador On A Tightrope

On June 7, 2007, the Council on Hemispheric Affairs (COHA) was invited to participate in a meeting with Ecuador’s foreign minister, Maria Fernanda Espinosa. In spite of a very thoughtful and earnest presentation, it was fully apparent that, for mainly economic reasons, the left-leaning Rafael Correa administration is anxious to mount a two-court strategy in order to preserve a beneficial economic relationship with Washington while still qualifying as a pink tide country. COHA also recently had as a visitor Ecuador’s attorney general, José Xavier Garaicoa Ortiz, who, in coordination with this strategy, emphasized the importance of careful and correct ties with Washington, except on several leading edge foreign policy issues. Ortiz’s presentation became somewhat more firm when he stated that Ecuador would not, under any circumstances, be renewing the agreement allowing a U.S. military base in Manta, Ecuador and expects to take a hard but conciliatory stand on the border security issue, particularly in regard to Colombia. Meanwhile, President Correa preaches a somewhat more strident and autonomous position in concert with President Hugo Chavez and some of Venezuela’s and Ecuador’s other allies.

Ecuador Seeks Considerations from Washington
Although Ecuador, on economic grounds, has completely ruled out a Free Trade Agreement (FTA) with the U.S., at the same time, it is intent on preserving social cohesion and political stability with its neighboring Andean Community (CAN) countries, as well as Washington. Ecuador hopes that the U.S. Congress will reinstate the Andean Trade Promotion and Drug Eradication Act (ATPDEA) for a more sustained period of time rather than the two-year period being touted by the Bush Administration. The Trade Promotion Act was first established to recognize the sacrifices made by the Andean populations to combat narcotraffiking. The effects of the ATPDEA have reflected a reciprocally-beneficial relationship between the U.S. and Ecuador, a fact that was emphasized during the COHA conversations with both the Ecuadorian foreign minister and attorney general. Additionally there were utterances by other cabinet and mid-level officials, who apparently have been instructed by the president to take a softer line on what otherwise could be construed as contentious issues.

ATPDEA Very Important to Correa
As Ecuadorian officials are quick to stress, ATPDEA yields a number of summary benefits for the U.S. which should not be minimized: primarily it acts as a buffer to prevent unrestricted migration into the U.S. at zero cost for U.S. taxpayers. Also, 75 percent of the funds spent by the U.S. in Ecuador revert back to the U.S. as a result of Ecuador’s in-country purchases. In Ecuador, ATPDEA is calculated to have generated about 350,000 jobs as well as to serve as a barrier against employment in the illegal drug industry. Moreover, according to Bernardo Traversari, Executive Director of the Ecuadorian-American Chamber of Commerce and a member of foreign minister Espinosa’s delegation, “wages in these industries are higher than those paid in Colombia to workers cultivating illegal drugs, which from a labor standpoint, is very important because it provides less temptation to fall into illegal activities.” Evidently, ATPDEA contributes heavily to Ecuador’s position as a drug-free country among surrounding nations that are better known as Olympic-ranked players in the illicit drug business.

According to Espinosa, “Ecuador remains a drug-free country despite its geographic position.” But the ramifications of being in this position very much depend on the continuation of ATPDEA. Ecuador indirectly relies on some funding from the U.S. for aid in stabilizing its borders with fractious neighboring countries, particularly Colombia where anti-drug fumigants regularly float over the northern border, adversely affecting the health of Ecuadorian nationals. As a result, Ecuador bears most of the cost of maintaining 13 fixed security check points and 30,000 troops to protect the border. Jeff Sheedy, CEO of Textiles La Escala and President of the Ecuadorian Textile Association, made Ecuador’s reliance on ATPDEA perfectly obvious when he said, “1.5 million people depend on this industry in Ecuador, which is an equivalent of 37 million people in the United States who would be affected by a change in ATPDEA.”

Correa and Manta
Ultimately, President Correa’s more bravo statements may have been better fashioned for the Latin American market than for Washington. It is evident from talking with Espinosa and her delegation, as well as in an earlier visit with the country’s attorney general, that the Quito government is functioning on a very careful level of diplomacy that is meant to generate the best advantages for the Correa Administration from almost all of Ecuador’s associations. President Correa’s often radical speeches contrast with Espinosa’s and Attorney General Ortiz’s markedly more guarded approach. For example, Correa announced recently that his country will not be renewing the Manta base agreement with the U.S. military, which will deny Washington the continual use of a Forward Operating Location (FOL) in Ecuador, whose main objective is drug-trafficking surveillance.

It was risky for Ecuador to so adamantly refuse a continued U.S. military presence on its territory after the Manta lease expires, seeing as it could invite a chilly U.S. response to Ecuador’s push to extend ATPDEA for a longer rather than shorter period. In addition, Ecuador has announced it will not participate in this year’s UNITAS Pacific military exercises. UNITAS Pacific is an annual naval regatta that traditionally involves elements of the fleets of Chile, Peru, Ecuador, Colombia, and the U.S. UNITAS Pacific drills have been carried out uninterrupted since 1959. If Manta is an irritant to U.S.-Ecuadorian relations, the latter’s recent and abrupt cancellation of hosting this year’s UNITAS Pacific exercises may signal that relations between the Correa administration and Washington could continue to be bumpy in the near future, in spite of Ecuador’s best efforts, if the U.S. decides to punish Ecuador for its perceived insolence against Washington’s ego. In a tit-for-tat exchange, Correa’s tactics fully reveal Ecuador’s sensitivity over issues of sovereignty, by its firm stance on military matters with the U.S. such as Manta and UNITAS Pacific, while espousing a calculated moderate position on other bilateral issues.

Warm Abrazo on Some Issues; Cool Handshake on Others
Foreign Minister Espinosa emphasized to COHA that, “Ecuador aims to have the best relationship with all countries and to be a neutral convener in the region that can bridge different interests. Ecuador wants to maintain its strong historical ties with the United States, but will not leave aside the interests of its Latin American brothers and sisters. We have an excellent relationship with our neighboring countries, including Venezuela.” To a large extent, this cautious approach displays the well thought out ambiguity of U.S.-Ecuadorian relations, or at least a bifurcation in Ecuador’s geopolitical position, based upon the fact that Ecuador is not blessed with almost unlimited oil reserves, yet still needs access to a major market like the U.S. While Ecuador’s heart may remain in Caracas, the hard reality is that a beneficial economic relationship with the U.S. is essential.

This analysis was prepared by COHA Research Associate Anna Gangadharan
June 19th, 2007
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The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being “one of the nation’s most respected bodies of scholars and policy makers.” For more information, please see our web page at www.coha.org; or contact our Washington offices by phone (202) 223-4975, fax (202) 223-4979, or email coha @coha.org.

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