Andean Trade Preferences for Ecuador Should be Revoked Immediately

By September 17, 2012Trade

As the Office of the U.S. Trade Representative (USTR) conducts its annual review to determine whether Ecuador still qualifies for trade preferences under the Andean Trade Preferences Act (ATPA), the NAM has urged USTR to examine carefully whether Ecuador has lived up to its ATPA eligibility requirements. 

The NAM has long been concerned with Ecuador’s repudiation of its legal obligations and its breaches of the basic rule of law.  In May, the NAM recommended to USTR that Ecuador be granted three additional months to prove its ability and willingness to live up to its ATPA obligations.

Regrettably, those three months have passed and Ecuador’s actions with respect to U.S. companies or ensuring the rule of law have not improved.  Indeed, Ecuador has taken action in the past months directly contrary to international arbitration awards issued pursuant to the U.S.-Ecuador Bilateral Investment Treaty.  As a result, Ecuador is out of compliance with the mandatory ATPA eligibility requirements and its benefits under ATPA should be promptly revoked.

U.S. preference programs should not be treated as an entitlement, but rather as a partnership between the United States and nations willing to live up to the specified eligibility criteria, which includes abiding by basic standards of the rule of law and protection for U.S. investment.

To continue granting Ecuador preferential treatment under ATPA despite its failure to meet such standards, would send a dangerous message to other nations that they can disregard the basic eligibility criteria without consequences, thereby diminishing the incentive that nations have to live up to their international obligations.

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

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