Thursday, January 24, 2008

Trade with Bolivia and Ecuador

Here is the transcript from yesterday’s press conference by Thomas Shannon, the Assistant Secretary of State for Western Hemisphere Affairs. He is going with Condoleezza Rice and 10 members of Congress (all Democrats) to Colombia to drum up support for the FTA.

He said a lot about the importance of FTAs, mentioning not only Colombia but Peru and Panama several times. He got a little more vague when it came to trade preferences with Bolivia and Ecuador:

ASSISSTANT SECRETARY SULLIVAN: The answer is we are working with the Congress with regard to making sure that particularly, the countries that we either just passed a free trade agreement with, Peru, or Colombia, looking for passage soon, is that that duty-free trade continues uninterrupted. So the answer is yes with regard to passage on a relatively short-term basis and that’s something that the Administration is working with Congress on.

With regard to Colombia and Peru, as you know, the ATPA is four countries and there have been some issues with regard to investor issues in Ecuador and Bolivia where we think further discussions between those governments, the Administration, and discussions with the Congress on how those benefits under ATPA would or should or could be extended is something that we are looking at right now.

QUESTION: Can I follow up on that after you? Well, I mean, you seem to imply that the Administration will not ask for the renewal for Bolivia and Ecuador, that there could be a lapse there. I mean, is that -- can you clarify that a little bit? There could be a lapse of time for those preferences for those countries?

ASSISSTANT SECRETARY SULLIVAN: I’ll let Assistant Secretary Shannon clarify.

ASSISTANT SECRETARY SHANNON: Yeah -- no, we’re not implying anything at this point in time. All we’re saying is that, you know, in our discussions with Congress -- and ultimately it’s a congressional decision. You know, because we passed a free trade agreement with Peru and because we’re in the process of trying to pass one with Colombia, the importance of extending benefits are obvious. There’s no doubt that ATPA has had a huge positive impact in Ecuador and in Bolivia and has met significant U.S. interests, including kind of enhancing trading relationships, but also building small- and medium-sized enterprises that create jobs. And this is something we’re aware of, it’s something we look at very closely.

But as Assistant Secretary Sullivan noted, there are some issues related to the statutory criteria of these agreements that we’re looking at closely and discussing with Ecuador and Bolivia and that we have an ongoing discussion with our own Congress on. So we’re -- we weren’t intending to imply anything. We want to underscore the importance and, from our point of view, the success of ATPA as a preference program. But we have due diligence that we still need to do.

Despite the protestations of not implying anything, the lawyer-speak of “statutory criteria” and “due diligence” is suggestive, not to mention the reference to “investor issues.” The Andean Trade Promotion and Drug Eradication Act (ATPDEA) expires at the end of February, and it would be a mistake to let it lapse.

11 comments:

boz 9:18 AM  

Failing to renew ATPDEA with Bolivia and Ecuador would be a huge mistake. Those preferences have created jobs and economic development in those countries. Taking it away will do a lot to harm long term US relations and won't provide any benefits to the US.

Anonymous,  10:06 AM  

I will be surprised if this congress approves any FTA at all, considering the position taken by all democratic candidates in the campaign.

Tambopaxi 11:12 AM  

Boz, while you're right from an objective perspective, Correa simply doesn't have any fans in the U.S. Congress.

Right from the start, he made it clear that he'd never do a FTA with the U.S.. He singled out the Bilateral Investment Treaty with the U.S. for special criticism and eventual cancellation without metioning that there over a dozen other similar treaties with European countries (which remain in force), and he and his Foreign Ministers (the current one and the last one) have repeatedly announced that the Correa government will not ask for an extension of the ATPDEA - and this agenda doesn't include plan to let the Manta agreement lapse next year since it's viewed as impinging on Ecuador's sovereignty.

His U.S. PhD notwithstanding, Correa has made it clear that he does not like the U.S. and that he'd really prefer to steer Ecuador's trade elsewhere, notably to Europe and China.

Notwithstanding THAT position, The U.S. is Ecuador's biggest trading partner, and the business community here, knowing that, is trying its best (and pretty much on its own) to see if they can get the U.S. Congress to give them a break.

I've mentioned before that Correa is not emotionally intelligent and this is another example of where he lets his dislike of the U.S. override his stated policy goal of generating more jobs in Ecuador. It's regrettable to say the least, but that's the kind of guy Correa is....

Anonymous,  9:09 PM  

It seems to me that the 'blame', if there is any, belongs with the US State Department. This smells like a "We'll show you, you socialist bastards. No free trade for you!" Before the right-wingers jump on that statement, think about the ideologues that Bush has stacked in the State Department and then tell me that that smell in the air is not emanating from Foggy Bottom.

boz 5:24 PM  

Anonymous,
This Congress did approve the Peru FTA, proving that Democrats are willing to work on free trade agreements that also protect labor and environmental standards.

Tambopaxi,
If Correa's foreign ministry has specifically said it doesn't want a renewal of ATPDEA, I'd be surprised. It is almost all benefits and no drawbacks for Ecuador. Even President Morales in Bolivia has specifically lobbied for it considering the benefits that it brings. If Correa is going against ATPDEA, that would be a really dumb position and would cause me to reassess what I think of him.

Anonymous,  7:45 PM  

Yes, this congress approved Peru's FTA before the primaries. Now it's different. Came on, you know that.

Bosque 8:06 PM  

Anyone who talks to Castro automatically goes on the US "crap list", this is how it is right now. Maybe later when the world leaders grow up and learn to trade for the purpose of trade and not politics.

Tambopaxi 5:11 AM  

Boz,

Correa and his Foreign Ministers have said that they won't ask for an extension of the ATPDEA.

They have not, repeat, not, said that they're specifically against the arrangement on its merits. Their argument against asking for an extension is that they won't demean themselves and their country by asking (or appearing to have to ask) the U.S. for the extension. (I'd provide examples of these statements, but I don't have the technical capability of doing the nice link things everyone else does.) In essence, they don't want to appear to be begging the neo-liberal empire for help on this.

These same people, though, have made it clear that they're willing to let other Ecuadorians lobby Congress on the extension and that's why I mention the role of the local business community in these efforts.

I understand as well that there have been low profile contacts/efforts on this issue between some government personnel and the U.S. Embassy on this, so some common sense seems to be in play somewhere. This is the principal reason, btw, that Shannon and Sullivan have been vague, i.e., dialogue between the two governments on trade arrangements is not at a complete standstill.

The obstacle is that Correa won't keep his mouth shut and he keeps making these, screw you, I'm not asking for anything, statements. These sorts of things tend to piss off the Americans and people in Congress, hence my remark about no fans of Correa there.

Correa's a very smart guy, intellectually, with his U of Illinois PhD to show for it, so he knows full well the points you make about the value of the ATPDEA.

His problem is that he's an immature loudmouth who can't resist the chance to play to his perceived leftist supporters and take a dig at the gringos. In doing this, he puts at risk an extension of the treaty, as well as jobs dependent on that arrangement. This is why I call him intellectually smart, emotionally dumb in that he jeopardizes his own stated policy of generating new jobs so as to keep Ecuadorians at home. The policy is good and logical, but pissing off the very parties who might help him with those jobs is not the way the achieve your policy.

Greg Weeks 3:32 PM  

Tambopaxi, it sounds like Ecuador is doing exactly what it should--no country should be forced to beg, and it is reasonable to use lower level contacts to work it out.

Tambopaxi 6:03 AM  

Greg, I beg (so to speak) to differ.

Correa is doing exactly what he should NOT be doing when it comes to making public statements about trade activities that potentially generate jobs, repeat, jobs is his country.

Ecuador needs jobs in country and many of those jobs depend on export and import relations with the U.S. Those relations are not the result of gringo plots, they're the result of Ecuadorian business folks looking for markets and the biggest, closest, most stable markets for Ecuador are in the States, whether Correa likes it or not (and he doesn't). In sum, Ecuador NEEDS the States.

Conversely, the States does need Ecuador as a trading partner. The entire economy here (about $27b last year) doesn't even amount to the State government budget of my home State of California. Within that same context all of the trade with Ecuador is.... well, it's not much (and Ecuador ran a trade surplus with the States last year, btw).

So the States, which had worked hard on a TLC with the last administration here, has taken the stance, Don't want a TLC? OK. Don't want a BIT? OK. Don't want Manta? OK. Don't want to ask for an extension of the ATPDEA? OK. I mean, talk about accomodating, that's the gringos.

And people like Shannon and Sullivan (their subordinates, anyway) are even more accomodating at the low level: they're working with Ecuadorians to try do something which might generate jobs here.

That work will be for naught, though, if Correa doesn't tone it down and stop misrepresenting the American position in his public statements. The States doesn't want him to beg (or come to it on his knees, as he puts it). Frankly, trade wise, the States doesn't care and it doesn't have to, but Correa should care all of this, and if he really does, he should not risk pissing off the U.S. Congress, which is what he's doing so far...

Greg Weeks 7:57 AM  

To be more convinced, I would need to see his recent statements about ATPDEA (in English, anyway, as local statements left untranslated wouldn't be noticed in Congress). I also think he's off the radar of most members, who ignore his statements and just see him vaguely as a leftist threat.

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