The government of Ecuador appears willing to walk away from preferential trade access to U.S. markets for mangoes and other agricultural commodities over a blowup over the search for a fugitive from the U.S.
Potentially doing harm to their own fresh produce exporters, Ecuador’s leaders said June 27 that the country would unilaterally back out of a trade pact with the U.S.
Ecuador’s leftist government has been under fire from several U.S. lawmakers for considering the request of granting refuge to American Edward Snowden. Members of Congress threatened to drop Ecuador from a preferential trade pact later this summer when it is up for renewal.
Snowden, a former contractor for the National Security Agency now believed to be in Russia, is being sought by U.S. authorities for leaking sensitive national security secrets.
Quoted by in the Quito-based newspaper El Comercio, Ecuador’s Minister of Communications Fernando Alvarado said that the country “doesn’t trade its principles or give them up for commercial interests, no matter how important.” Claiming U.S. blackmail over the trade pact and the Snowden issue, Alvarado said Ecuador “unilaterally and irrevocably renounces those trade preferences.”
A spokesman for the Office of the U.S. Trade Representative could not be reached for comment about Ecuador’s statement.
Ecuador’s biggest fresh produce export item to the U.S. is bananas, although the U.S. has no tariff on fresh banana imports from any country. U.S. imports of Ecuador’s bananas rated at about $410 million in 2012, down from $469 million in 2011.
However, among Ecuador’s fresh produce suppliers, mango exporters stand to be hurt the most by the loss in U.S. preferential trade treatment.
U.S. imports of Ecuadorian mangoes totaled $37 million in 2012, up from $23 million in 2011 and $18 million in 2010.
Holding out hope for a resolution to the issue, Larry Nienkirk, president of mango importer Splendid Products LLC, Burlingame, Calif., said Ecuador’s preferred trade status comes up for debate before Congress every three or four years. Nienkirk said that Ecuador mango season typically start in late October and finishes in early February.
Ecuador also exports a substantial volume of frozen broccoli and cauliflower, according to U.S. Department of Agriculture trade statistics.
William Watson, executive director of the Orlando, Fla.-based National Mango Board, said the current tariff-free trade preferences for Ecuador mangoes expire at the end of July and must be renewed by Congress.
Without the trade preferences given by the U.S., the U.S. tariff on mangoes would rise from zero to 6.6 cents per kilogram if the trade pact is voided. That translate to about 28 cents per carton, Watson said.
Watson said Ecuador has three mango packinghouses and as many as 20 exporters.
While Ecuador is given duty-free access to the U.S. for many of its exports to the U.S. under the Andean Trade Promotion and Drug Eradication Act, it does not grant the same tariff-free access to the U.S. fresh produce, according to Mark Powers, vice president of the Northwest Horticultural Council, Yakima, Wash.
Powers said Ecuador is a limited market for U.S. apples, taking only about 50,000 to 100,000 cartons per year. U.S. apple exports must pay a duty of about 17% to access the market in Ecuador, Powers said.
“There was hope that Ecuador would roll into one of the free trade agreements but it never really happened,” he said.