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US-Andean countries

In May 2004, the US began negotiations with Colombia, Ecuador and Peru to reach some form of FTA with the three Andean countries — and later, if US plans worked out, Bolivia as well.

According to initial media reports, “There are three different scenarios under discussion about how to structure the free trade agreement with the US. The first would be one plurilateral agreement between the four countries. The second would be individual bilateral agreements between the US and each of the three Andean countries. The third would be an agreement between the three Andean Community of Nations (CAN) members, who have obligations within CAN, and the US. The US prefers the arrangement used in the CAFTA agreement, i.e. one plurilateral agreement among all parties. This option is not viable through CAN because not all CAN members are involved in this FTA process with the US. Therefore, according to the head of the Colombian delegation, what may emerge is a plurilateral agreement between the US and a special bloc comprising Colombia, Ecuador, and Peru.“

Since then, a number of special tensions have marked these FTA discussions. One is that the Andean countries have been reluctant to go beyond their WTO obligations in terms of intellectual property rights. The governments have kept expressing strong concerns about biodiversity, traditional knowledge, and access to medicines. Another overwhelming concern has been with regard to agriculture, where the Andean countries are reluctant to liberalize their markets on bilateral terms if the US will not agree to reduce domestic subsidies. An underlying concern has been how the FTA would interact with Andean Community law; that is, which of the two would take precedence.
Regarding the US side, Washington’s lack of flexibility has been pointed out by many as a hallmark of the process. For that reason, many people refuse to call these “negotiations“.

Indigenous peoples, farmers’ organizations, labour unions, and other social movements have been heavily mobilizing to stop this FTA. The FTA has been seen from the start as a thorough capitulation to US economic and geopolitical interests. In Colombia, Ecuador, and Peru, different sectors have pushed for national referenda on the FTA in their respective countries — and on several occasions organized their own.

In late September 2005, the US issued an ultimatum to sign an agreement by 20 November 2005 — before the 2006 electoral process in all three Andean countries and the mid-2007 expiry of Bush’s “fast track“ trade negotiating authority. No agreement was reached by end November, with Colombia and Ecuador holding back on several grounds and Peru saying it would proceed alone.

Since Peru signed a bilateral trade deal with the US in December 2005 and bilateral negotiations continuing with Colombia as of that date (until the US-Colombia deal came into force in March 2012), information on subsequent events is presented separately under US-Peru and US-Colombia.

As to Ecuador, Quito’s cancellation of a contract with Occidental Petroleum (Oxy) in May 2006 sounded the death knell for negotiations around a US-Ecuador FTA. With this decision, the government of Ecuador obeyed its law and the demands of the majority of Ecuadorans, who had been calling for an end to the negotiations and for Oxy’s departure.

last update: May 2012

Ecuador minister says US political interference unacceptable
Finance Minister Diego Borja said that the US decision to break off free trade talks with Ecuador after the government canceled Occidental Petroleum Corp’s (OXY) contracts was unacceptable political interference.
White House axes free trade talks with Ecuador
The Bush administration announced Tuesday it has broken off negotiations on a free trade agreement with Ecuador after that government’s decision to annul an operating contract with Occidental Petroleum Corp.
Ecuador sends military to seized oil facilities
Ecuadorean President Alfredo Palacio sent troops to guard oil facilities seized from Occidental Petroleum Corp. as they are transferred to state control, officials said Tuesday.
US-Ecuador free trade agreement frozen
Ecuador’s chief trade negotiator, Manuel Chiriboga, admitted that a huge "uncertainty" surrounds the future of the free trade negotiations with United States suspended since the end of March.
Iglesias: Minister repeats demand that Bogotá, Lima drop deals with Washington
Light Industry and Trade Minister María Cristina Iglesias reiterated the government’s position that Colombia and Peru would have to abandon the bilateral trade deals they recently signed with the United States if Venezuela were to stay in the Andean Community of Nations.
Industry minister: Venezuela will never ink FTA with the US
"We will never initial a Free Trade Agreement (with the United States,) as they put men in the background and focus on the North," Venezuelan Light Industries and Commerce minister María Cristina Iglesias said Tuesday.
FTA daggers leave Andeans gasping
Venezuelan Minister for Integration and Foreign Trade Gustavo Márquez said on Monday that the countries which signed Free Trade Agreements with the US are responsible for the failure of the Andean Community of Nations (CAN).
US: Ecuador oil-tax law violates treaty
A US Embassy spokeswoman said Friday that a newly approved oil-tax law designed to cut into windfall profits of foreign oil producers, like US-based Occidental Petroleum Corp, violates a bilateral investment treaty.
US warns Ecuador free-trade pact at risk
The United States warned Ecuador on Thursday that a proposed free-trade agreement was at risk unless Quito acted on a growing list of investment and other concerns.
Ecuador seeks to salvage free trade deal
Ecuador’s ambassador to Washington return to Quito for consultations on how to overcome an impasse with US free trade negotiators over an oil-tax bill designed to cut into foreign windfall crude profits.