Ecuador Not Renewing Pact with US

The Houston Chronicle

QUITO, Ecuador — Ecuador's new leftist president has decided not to
renew a bilateral investment treaty with the United States, the
country's foreign minister said Monday, just days before a senior U.S.
official is due to visit.

Maria Fernanda Espinosa said President Rafael Correa, a U.S.-trained
economist, will not renew the agreement that expires this week, but is
"totally open" to discussing "an alternative that mutually guarantees
the investments of each country."

The announcement came less than a week before U.S. Deputy Secretary of
State John Negroponte is scheduled to visit the country.

The treaty, signed in 1993, is meant to encourage and protect investments.

Ecuador "has not formally notified" U.S. authorities about terminating
the agreement, a spokesman at the U.S. Embassy in Quito told The
Associated Press.

"We were surprised to hear about this in the media," Michael Greenwald
said. "There had been no formal notification of an intent to terminate
or even of any concerns about the treaty."

Last year, Occidental Petroleum Corp. cited the treaty when it sought
$1 billion in damages over Ecuador's cancellation of the
California-based company's oil-production contract. The arbitration
claim before the World Bank's International Center for Settlement of
Investment Disputes in Washington has not been resolved.

Espinosa said Sunday the treaty "has really caused many problems for
our country" and "does not respect national interests," although she
did not elaborate.

Some Ecuadorean executives worry that Correa's decision will cause the
U.S. to deny Ecuador another extension of the Andean Trade Promotion
and Drug Eradication Act, a package of trade benefits offered in
exchange for cooperation in counter-drug activities. The act expired
Dec. 31, but was extended for six months.

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