U.S. trade preferences should not be awarded to nations where corruption runs rampant and American companies are preyed upon. Today, the Senate Finance Committee becomes the second congressional committee this week to consider whether to renew the Andean Trade Preference Act. The committee ought to exclude the government of Ecuador from some or all of the act’s benefits.
Since 1991, the Andean Trade Preference Act has promoted trade with Colombia, Bolivia, Peru and Ecuador, but when Congress renewed it last year, it explicitly called for semi-annual reviews of Ecuador’s status as a result of numerous disturbing developments there. This year, Congress should get tougher still because governance in Quito is deteriorating.
On Tuesday, Transparency International released its 2009 Corruption Perceptions Index, which the organization describes as “a measure of domestic, public sector corruption.” Ecuador flunked. On a 10-point scale, with 10 being the least corrupt, Ecuador scored an awful 2.2. According to Transparency International’s measures, any score below 3.0 amounts to “rampant corruption.” That put it 28th out of 31 nations in the Americas. Out of 180 nations rated worldwide, Ecuador ranked as more corrupt than 145.
In recent months, Ecuador’s government, led by President Rafael Correa, has waived the patent rights of U.S. drug manufacturers, been exposed for apparently harboring terrorists operating against U.S. ally Colombia and for accepting campaign donations from them, cozied up to Venezuelan Marxist dictator Hugo Chavez, threatened to shut down the independent TV station Teleamazonas, and seized oil fields owned by the Anglo-French company Perenco Corp. It did the same thing to the American Occidental Petroleum Corp. in 2006.
Ecuador also has engaged in what amounts to almost extortionate tactics in a $27 billion lawsuit against American oil company Chevron about supposed environmental damage for which Ecuador’s government already absolved Texaco (now part of Chevron) back in 1998.
This summer, the Ecuadoran judge who had been presiding over the case was forced to step down after being caught on videotape in an alleged bribery scheme that purportedly involved Mr. Correa’s sister, Pierina.
The U.S. State Department, the World Bank, the United Nations and the International Bar Association all have denounced Ecuador’s court system or overall government as unreliable or corrupt. Such a record merits not trade preferences but, if anything, trade sanctions.
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