Ecuador’s withdrawal from a US trade agreement exemplifies Ecuador’s emergence as a leader in Latin America, which is divided in its relations with the United States. On Thursday, Ecuador unilaterally left the Andean Trade Preference and Drug Eradication Act, a preferential trade agreement with the United States. Quito meant to pre-empt what was likely to be a showdown with the U.S. Congress over the agreement’s renewal. Though tensions between the two countries had been growing for months, animosities peaked recently when Washington threatened to cancel the agreement over the possibility that Ecuador may offer asylum for former Booz Allen Hamilton employee Edward Snowden.
Ending the agreement is a superficial, albeit highly symbolic, gesture that reveals much about Ecuador’s geopolitical position in Latin America. Latin America is loosely grouped into two economic blocs and political ideologies. One such bloc, the Pacific Alliance, brings Peru, Chile, Mexico and Colombia together under a free trade regime. The Common Market of the South, also known as Mercosur, brings together Brazil, Argentina, Uruguay and Venezuela. In his efforts to lead Ecuador away from a pro-U.S. policy, President Rafael Correa has aligned more closely with the latter bloc. Correa seeks Mercosur membership as a long-term alternative to trade with the United States, which has traditionally dominated Ecuador’s trade and its politics.
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As he disengages the United States, Correa is emerging as the region’s most powerful leftist leader. Many current Latin American political leaders, some of whom criticize U.S. foreign policy, face domestic political challenges. Venezuela remains divided after Nicolas Maduro’s hotly contested presidential election in April. Argentine President Cristina Fernandez de Kirchner faces a decline in support among the middle class — the very group that brought her husband Nestor Kirchner to power in 2003. In such a political environment, Correa appears to be the informal leader of the Latin American political left.
Correa’s international prominence stems from his ability to effectively consolidate political control of a fractious state after his election in 2007. In the late 1990s and early 2000s, Ecuador’s economy collapsed, and the ensuing political instability led to the failures of several governments and to two coups. Correa has provided the political stability the country lacked for a decade prior to his rule. Along with increased social spending, this stability gave Correa substantial political support that other leftist leaders do not have. Moreover, Ecuador’s considerable revenue from oil exports — particularly to the United States — enabled the government to act without concern for opposition groups.
Correa’s popularity allowed Ecuador to act more aggressively in the international arena. Correa was able to unilaterally withdraw from ATPDEA because the decision affected few constituents loyal to him. The business community that opposed the move is not among Correa’s supporters, so he had little to lose in the move. Similarly, the Ecuadorian government has sought membership in Mercosur and has reached out to China and Iran for economic and political ties despite opposition from domestic groups and the United States.
Despite Correa’s actions, the decision to cancel ATPDEA does not fundamentally change Ecuador’s current economic relationship with the United States. U.S Congressional opposition against the preferential trade agreement would probably have halted its renewal anyway (it was set to expire July 31). Ecuador’s considerable trade links to the United States will continue for the foreseeable future because USs refineries on the West Coast are a natural market for Ecuadorian oil. Ecuador thus will continue its somewhat paradoxical foreign policy of opposing the United States rhetorically while depending on its energy market economically.