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Assange Asylum Wins Correa Anti-U.S. Cachet As Trade To Suffer

By Nathan Gil & Eric Martin

AS/COA's Vice President Eric Farnsworth comments on the outlook for Ecuador´s trade preferences with the U.S. after the Andean country granted asylum to WikiLeaks’ founder Julian Assange.

Ecuador President Rafael Correa is emerging from the shadow of Venezuelan mentor Hugo Chavez as his decision to grant asylum to WikiLeaks’ founder Julian Assange plunges relations with the U.S. to new lows.

While such a tactic may boost his chances of re-election in February, the political gain may spell economic loss for Ecuador, as harboring Assange sparks reprisals from the South American nation’s top trade partner, said Cynthia Arnson, Latin America program director at the Woodrow Wilson International Center for Scholars.

Ecuador’s economy, about the size of Nebraska’s, benefitted from $1.7 billion in duty-free exports to the U.S. last year under the Andean Trade Promotion and Drug Eradication Act. Protecting Assange, who published classified U.S. military cables over the internet, is the latest in a series of conflicts with the U.S., including ties with Iran, which top U.S. lawmakers say justify re-imposing tariffs when the trade preferences expire in July.

“This latest move completely undermines the relationship with the U.S. and virtually guarantees that Ecuador will be removed from the Andean trade preference benefits,” Arnson said in a phone interview from Washington.

Ecuador is the last remaining beneficiary of the Andean trade preferences, which originally included Colombia, Peru and Bolivia. Colombia and Peru have since signed free-trade agreements with the U.S., and Bolivia was suspended in 2008 for failure to cooperate with the U.S. on anti-drug efforts.

The expiration of the trade preferences won’t push Ecuador into recession because the nation can still export oil to the U.S. and Asia, said Eric Farnsworth, vice president of the Council of the Americas in Washington. Many of Ecuador’s exports under the Andean preferences are also eligible for the Generalized System of Preferences, another tariff exemption program, he said, although the U.S. could rescind those benefits, too, as it did this year for Argentina in retaliation for their failure to pay damages owed U.S. companies….

“You can fiddle around with Assange at your embassy in London,” Farnsworth said, “but you’re giving up trade in Asia….”

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