Ecuador Must Live Up to Its Obligations Under Trade and Investment Agreements

By June 27, 2012Trade

Late last week the National Association of Manufacturers (NAM) sent a letter to Deputy National Security Advisor for International Economic Affairs Michael Froman about manufacturers concerns over Ecuador’s disregard of its obligations under the Bilateral Investment Treaty (BIT) and recent findings of the International Tribunal.

The NAM believes that Ecuador is not in compliance and meeting its obligations of the BIT and should be given three months to show it is willing to comply. One needs to look no further than the claim filed against the Government of Ecuador by Chevron for violations under the United States-Ecuador BIT. Below is an excerpt from the letter to Mr. Froman:

The highly visible case in point is the international arbitration claim against the Government of Ecuador (GOE) filed by Chevron for violations of the Ecuadorian government’s obligations under the United States-Ecuador Bilateral Investment Treaty (BIT). Ecuador had issued an $18 billion judgment against Chevron, in a case in which fraud has been documented by at least seven courts in the United States. The BIT arbitral panel has issued several awards directing the GOE to take measures to prevent enforcement of this judgment pending final disposition of the case by the BIT panel. Further, early this year the International Tribunal made additional rulings rejecting all of Ecuador’s objections and also issued for the second time an order directing Ecuador to take all measures necessary to suspend the enforcement and recognition within and without Ecuador, of the judgment.

Manufacturers believe it’s critical that all nations adhere to the rules of trade and investment agreements. Ecuador must live up to its Andean Trade Preference Act (ATPA) eligibility requirements or lose its preferences.

The NAM is asking the Administration to give Ecuador three months to meet the requirements and standards or it should be removed from the ATPA, resulting in a loss of trade preferences. If Ecuador is able to continue to receive preferences while failing to meet such standards it sends a dangerous message to other developing nations.

Leave a Reply