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Congress to let U.S. trade benefits for Ecuador expire

WASHINGTON (Reuters) – Ecuador, which renounced longtime U.S. trade benefits last month, is on the verge of getting its wish when the program expires next week, congressional aides said on Thursday.

Key committees in both the Senate and the House of Representatives have no plans to move legislation to renew the 22-year-old Andean Trade Preference Act, the aides said.

Ecuador, which angered U.S. lawmakers by flirting with offering asylum to former U.S. spy agency contractor Edward Snowden, has received duty-free treatment for many of its goods since 1991 under the Andean program.

After a senior U.S. lawmaker threatened Congress would revoke the trade benefits if Ecuador took in Snowden, who is wanted by the United States for revealing details of its intelligence programs, Ecuador responded by renouncing the benefits.

An OPEC nation of 15 million people, Ecuador exported $5.4 billion worth of oil, $166 million of cut flowers, $122 million of fruits and vegetables and $80 million of tuna to the United States under the Andean trade program in 2012.

Termination of the benefits could hurt Ecuador’s cut flower industry, which has blossomed under the program and employs more than 100,000 workers, many of them women.

The Andean program originally also included Bolivia, Colombia and Peru. But Bolivia was kicked out a few years ago when Washington determined it was no longer cooperating in its war on drugs. Colombia and Peru now have free-trade agreements with the United States and no longer need the program.

That makes Ecuador the only remaining beneficiary under the program, which expires on July 31.

Ed Gresser, a trade policy specialist at the GlobalWorks Foundation, said it would be unusual for the United States to run a trade benefit program for just one country.

“I don’t see ATPA being renewed. This would be the first U.S. trade preference program to fade out,” Gresser said.

Ecuador can still receive duty-free treatment for many of its goods under a separate program known as the Generalized System of Preferences, or GSP.

However, some goods eligible for duty-free treatment under the Andean program are not covered under GSP.

Recognizing the Andean program was unlikely to be renewed, Ecuador earlier asked the United States to add cut roses, frozen broccoli and preserved artichokes to the GSP program.

In June, just after Ecuador renounced its trade benefits, the U.S. Trade Representative’s office said a decision on those requests had been deferred.

In addition, it accepted a petition from Chevron, which has a long-running legal battle with Ecuador, that could lead to the Andean country’s suspension from GSP.

By Doug Palmer – Reuters, July 25, 2013


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