U.S. senator says Snowden case risks Ecuador trade status

WASHINGTON (Reuters) - The head of the U.S. Senate Foreign Relations Committee said on Wednesday he would seek to end preferential treatment for Ecuadorean goods if the South American nation offers political asylum to fugitive former spy agency contractor Edward Snowden.

Senator Robert Menendez, chairman of the foreign relations panel, warned in a statement that accepting Snowden "would severely jeopardize" preferential trade access the United States provides to Ecuador under two programs that are up for renewal in Congress.

"Our government will not reward countries for bad behavior," Menendez said.

Snowden was in hiding on Wednesday at an airport in Moscow awaiting a ruling on his request for asylum from the South American country's leftist government. The United States wants him extradited to face charges that he stole and leaked details of secret U.S. government surveillance programs.

Menendez also called on Russia to stop sheltering Snowden and turn him over to the United States.

The New Jersey Democrat, an influential voice on trade issues as leader of the foreign relations panel, said he would lead the effort to prevent the renewal of Ecuador's duty-free access to U.S. markets under the Generalized System of Preferences program, which expires on July 31.

He also promised to block renewal of the Andean Trade Promotion and Drug Eradication Act, which also expires at the end of next month.

An OPEC nation, 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.

While Ecuador could find other markets for its oil, termination of the benefits could hurt the cut flower industry, which has blossomed under the program and employs more than 100,000 workers, many of them women.

Ecuador is the only recipient of trade benefits under the long-time Andean program. Peru and Colombia have free trade pacts with the United States and Bolivia was suspended several years ago.

Last year, five major U.S. business groups urged Ecuador be suspended from the program because they said it failed to provide adequate protections for investors.

Faced with the likelihood the Andean program would not be renewed, Ecuador has been lobbying the Obama administration to provide duty-free treatment for additional goods under the Generalized System of Preferences program to lessen the blow.

(Editing by Sandra Maler, David Brunnstrom and Stacey Joyce)