February 18, 2008 / 6:28 PM / 12 years ago

Ecuador trade breaks should be for good-US lawmaker

QUITO, Feb 18 (Reuters) - A top U.S. lawmaker on Monday said trade preferences to Ecuador for fighting drug trafficking should be made permanent once a spat over the seizure of assets owned by U.S. oil company Occidental Petroleum has been resolved.

Rep. Eliot Engel, a New York Democrat who chairs a Western Hemisphere subcommittee in the House of Representatives, said duty-free access to the U.S. market is key to fighting poverty in Ecuador, which borders the world’s top cocaine producers Colombia and Peru.

Ecuador has been engaged in a legal dispute with Occidental Petroleum (OXY.N) since the government seized the company’s assets in the country in 2006.

“People like me ultimately want to make it permanent after those issues are worked through,” Engel said of the trade preference deal after meeting with left wing President Rafael Correa in Quito.

Since 1991, the United States has allowed tariff-free access for thousands of products from Ecuador, Bolivia, Colombia and Peru in return for evidence they are tackling drug cartels.

The Andean Trade Preference Act was due to expire in February but is likely to be renewed until the end of this year after a U.S. House of Representatives committee gave the green light last week.

Republicans agreed to the 10-month renewal, but said Bolivia and Ecuador’s actions against U.S. investors remain a concern.

Other lawmakers have said they are worried by Correa’s decision to eject U.S military from a key coastal base used for anti-drug operations in the region when its lease expires in 2009.

Correa, an ally of Venezuela’s anti-U.S. leader Hugo Chavez, has said he does not recognize the jurisdiction of the international court arbitrating the Occidental dispute and has no plans to seek a full free-trade deal with Washington.

However, the U.S.-trained economist says Ecuador’s success in battling the trafficking of cocaine through its borders should be rewarded with trade benefits for the Andean nation.

He said the tariff breaks are also an incentive for thousands of farmers to keep away from planting coca, the plant used to make cocaine. (Reporting by Alonso Soto; editing by Frank Jack Daniel and Dan Grebler)

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