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Ecuador minister says US political interference unacceptable


Ecuador minister says US political interference unacceptable

May 17, 2006

QUITO (MarketWatch) — Finance Minister Diego Borja said Wednesday that the U.S. decision to break off free trade talks with Ecuador after the government canceled Occidental Petroleum Corp.’s (OXY) contracts was unacceptable political interference.

"It draws my attention that the U.S. government has assumed as its own a problem between the Ecuadorean state and U.S. company. It is not possible that on the one hand it pushes a trade negotiation and on the other hand seeks to interfere politically in an internal matter. This is unacceptable," Borja told journalists.

On Monday, Ecuador canceled Occidental’s operating contracts in the country after a long-running dispute, saying the company had broken contractual terms.

Government officials have said Occidental must hand over all its assets in the country to Ecuador, without any cost to the state oil company, Petroleos del Ecuador.

Despite the tense relations between the governments after Occidental’s contract was canceled, Borja remains optimistic that the U.S. won’t take away Ecuador’s preferential tariffs before they expire in December. He’s also hopeful that prior to definitively breaking of free trade talks, the U.S. will take into account Ecuador’s efforts in the battle against drugs.

Borja said that in the war on drugs, spearheaded by the U.S. government, Ecuador has even used its own resources.

"If any country has been successful in this struggle, it has been Ecuador," said Borja, who underscored that Occidental’s contract was canceled because it violated the terms of that contract and Ecuadorean law.

Government Minister Felipe Vega said that the U.S. attitude was "unacceptable blackmail."

Meanwhile, Principal Deputy Assistant Secretary of State for Western Hemisphere, Charles Shapiro, said that the U.S. is disappointed over Ecuador’s decision on Occidental.

Shapiro said that the U.S. is seeking clarification from Ecuadorean Foreign Minister Francisco Carrion and that Ecuador’s ambassador to Washington was called to the State Department.

"We have more information, and we must process this information. Of course Occidental can turn to the Bilateral Investment Treaty," said Shapiro in statements to the press published Wednesday by the U.S. Embassy in Quito.

 source: MarketWatch