- The Washington Times - Sunday, December 10, 2006

LIMA, Peru (AP) — Ecuadoran President-elect Rafael Correa said yesterday that he will not sign a free-trade agreement with the United States but will seek extended trade preferences under a counternarcotics agreement.

Trade agreement talks between the U.S. and Ecuador derailed in May after Ecuador canceled the operating contract of California-based Occidental Petroleum Corp.

Mr. Correa told reporters that he was dissatisfied with the U.S. House of Representatives’ approval of a six-month extension of the Andean Trade Promotion and Drug Eradication Act, a package of trade benefits in exchange for counternarcotics activities.

These benefits should “last as long as the anti-drug fight lasts,” Mr. Correa said upon arriving in Ecuador, adding that his Andean country will negotiate a long-term extension of the package with the next U.S. Congress.

Before leaving Lima, where he met with Peruvian counterpart Alan Garcia after the second South American Community of Nations summit in Bolivia, Mr. Correa told Peru’s Radioprogramas that the bilateral U.S. free-trade pact would be “tremendously harmful” to Ecuador.

The Andean country adopted the dollar as its currency in 2000 to halt hyperinflation. But Mr. Correa says that a trade agreement with the U.S. — like the ones Colombia and Peru have signed — could create “incalculable” damage for Ecuador because the country cannot control its currency’s value.

“We don’t have a national currency; we have the dollar,” he told Radioprogramas. “If as a result of the agreement Peru and Colombia have a problem in the external sector, they reduce the currency’s value and correct the imbalance. Ecuador can’t do that, and the consequences could be incalculable.”

Although critical of the decision to adopt the dollar, Mr. Correa, who takes office Jan. 15, has reassured Ecuadorans that he intends to maintain the dollar as Ecuador’s official currency for the next four years.

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