If there was any doubt that Ecuador's pugnacious President Rafael Correa would back down in the rapidly escalating diplomatic spat over NSA leaker Edward Snowden, recent events will certainly put such notions to rest. Thumbing his nose once again at the Obama administration, Correa has just announced that his government will unilaterally give up special U.S. trade preferences under the so-called Andean Trade Promotion and Drug Eradication Act or ATPA. Originally, the measure was designed to counteract drug-trafficking by providing export opportunities to poor Andean nations. Under the act, Ecuador exports billions in tax free goods every year to the U.S. including tropical fruits, flowers and petroleum.
After Correa audaciously offered to provide diplomatic asylum to Snowden, the mainstream media, legislators from both sides of the aisle as well as conservative think tanks called for Ecuador to be punished for its impudence and cut off from the ATPA. Correa, however, says Ecuador will not submit to such "blackmail" and threats. Hardly intimidated by the Beltway establishment, defiant Correa has announced for good measure that he will send the U.S. millions of dollars for use in human rights training. Taunting Washington, Ecuador's Minister of Communications declared that the money could be used to avoid "espionage, torture, extrajudicial killings and other acts that denigrate humanity."
For Ecuador, the Snowden affair has all the elements of an epic David and Goliath story pitting the Colossus of the North against a small and impoverished South American nation. While it's unclear how the Snowden imbroglio will play out in Ecuador itself, many will surely rally to Correa's defense. For decades, Ecuador has smarted under Washington's influence and ongoing CIA intervention [for a further accounting of such history, see my earlier article here]. As a result, fiery populism plays well here.
Nationalist Backlash Against the U.S.?
Furthermore, Ecuadorans have little regard for "neo-liberal" style economic austerity which exacted a heavy social toll on the country and contributed to chronic political instability. Indeed, it was precisely such political instability which propelled leftist Correa to power in 2006. Since that time, the maverick politician has challenged Washington in the military, diplomatic and economic spheres, and now seems poised to inherit the South American populist mantle from recently deceased Hugo Chávez.
To be sure, Correa hardly ingratiated himself with Washington when he harbored WikiLeaks founder Julian Assange, a man who has spent more than a year holed up at the Ecuadoran Embassy in London. However, unlike Snowden, Assange is not a U.S. national and has never been formally charged by the Department of Justice. By offering to shelter Snowden, Correa has signaled that he is willing to take an economic hit over ATPA and the President also risks further opposition from his country's powerful export elite. Just how did we get to this point?
U.S. Business Lobby vs. Correa
Correa's recent moves cap an action-packed year of diplomatic friction. Indeed, as early as last August I wrote that U.S. business groups had lobbied the Obama administration to cut off trade benefits to Ecuador. The indignant companies had been spurred to action after Correa tried to hold Chevron responsible for its oil damage in the Ecuadoran Amazon. However, Quito's harboring of Assange probably added ammunition to ongoing lobbying efforts. Eric Farnsworth, Vice President of the Council of Americas, a group representing U.S. companies doing business throughout the hemisphere, told Reuters that Correa's harboring of Assange was not "a move destined to win many new friends in Washington." Moreover, the President of the National Foreign Trade Council brazenly remarked that the Assange imbroglio "would provide the excuse (to suspend benefits) if the administration is looking for one to do it."
In Washington, the Ecuadoran Ambassador grew puzzled by the business lobbying. "Ecuador is the only country in the Andean region with zero coca cultivation," he said. While the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Foreign Trade Council and the Business Roundtable alleged that Ecuador had violated investor rights, there was no specific explanation for cutting off trade preferences. Ecuador, the Ambassador argued, had observed proper protocol in regard to all its pending investor disputes.
Back in Quito meanwhile, the Ecuadoran business sector was also growing jittery. A full 350,000 jobs depended on ATPA, including the flower industry, broccoli, tuna and other sectors. Fearful lest Ecuador lose its special trading privileges, businessmen alerted Correa to the risks of harboring Assange. Correa, however, was hardly impressed and remarked that if he were reelected in the upcoming presidential election he would never knuckle under to economic blackmail. "Let them have their ATPA," the feisty President declared, "and we'll give them a few million dollars for a course on ethics and human rights."
In February of this year, Correa got his wish and cruised to electoral victory. Feeling emboldened by his new mandate, the President said that ATPA had turned into a "vulgar foreign policy instrument: if you behave well, we continue the agreement; if you behave badly, we take away the privileges. We can't continue to live like this." Preparing his countrymen for a possible cutoff, Correa remarked that regardless of ATPA Ecuador would continue to export its goods to the U.S.
The economic impact of an ATPA cutoff, Correa has argued, would be minimal and amount to less than $24 million in losses. What is more, Correa adds, the government is prepared to provide economic support to vulnerable industries such as fresh roses, canned tuna and broccoli. Not everyone, however, is reassured by the President's words. Indeed, the President of Ecuador's Agricultural Chamber told the Associated Press that loss of preferential trading provisions would exert a heavy toll. The flower industry, he said, "constitutes an escape valve from social pressure, unemployment and under-employment."
Fast forward to the Snowden scandal, and it was not long before the Beltway establishment began to threaten Ecuador with retaliation. Take for example hawkish Florida Republican Senator Ileana Ros-Lehtinen who declared that Correa's conduct would not stand. Democrats, however, have proven equally bullish. Sandy Levin, the top Democrat on the House Ways and Means Committee, said that if Correa offered asylum to Snowden there "would be no basis" for renewing trade preferences. Another Democrat, Senator Bob Menéndez of New Jersey, chimed in for good measure, declaring that Washington was ready to punish Ecuador if Correa chose to snub the colossus of the north. Joining in the fray, conservative Heritage foundation has also been leading the charge against Quito.
The Snowden affair has also generated a heated debate in the media, and predictably enough Fox News has weighed in against Correa. The Washington Post, too, has gone on the war path, remarking "when it comes to anti-American chutzpah, there's no beating Rafael Correa, the autocratic leader of tiny, impoverished Ecuador." Mincing no words, the Post adds, "as it happens, the preferences will expire next month unless renewed by Congress. If Mr. Correa welcomes Mr. Snowden, there will be an easy way to demonstrate that Yanqui-baiting has its price." It turns out the Post has long been on Correa's case: a year ago, the paper issued an almost identical threat when Correa was considering its asylum request for Julian Assange. Commenting on the Post's relentless Ecuador bashing, Fairness and Accuracy in Reporting muses, "it's good that someone at the Post's editorial page knows how to copy and paste."
Hardly amused by the Post's ongoing campaign, Correa has taken to Twitter no less in an effort to counteract the mainstream media. Tweeting to his million followers, Correa said the media had put up a smokescreen and was doing its utmost to distract the public from Snowden's main disclosures. In Quito, members of Correa's own Aliaza País party have backed up the President while echoing his nationalist rhetoric. The political opposition, meanwhile, argues that Correa is hypocritical for offering asylum to Snowden while simultaneously cracking down on free expression at home.
Having opened a veritable Pandora's box of trouble, can Correa thrive and ride a nationalist wave of indignation, or will he be brought down by domestic and international forces? Perhaps, Correa reasons that Ecuador had little chance of having its ATPA status renewed, and so Ecuador risked little by beating Washington to the punch. Nevertheless, Correa has galvanized the American establishment against him yet further, not to mention Ecuador's export elite.
The Guardian of London suggests that Correa is also putting great strains on his own political coalition, with some leftists embracing Snowden and other centrists fearing economic and diplomatic fallout. "Some in the government," the paper writes, "are believed to be annoyed that Julian Assange, the WikiLeaks founder who has sheltered at Ecuador's London embassy to avoid extradition, has seized the limelight in the Snowden saga." According to the paper, Assange caught Quito by surprise when he recently announced that Ecuador had provided Snowden with a safe-conduct pass to travel from Hong Kong to Moscow.
By offering shelter to first Assange and now Snowden, Correa has embarked on a high stakes game. The pugnacious president is constantly upping the ante, casting Ecuador's plight as a David and Goliath struggle against the odds. So far, playing the nationalist card has suited Correa well, though Ecuador's President may find that playing with fire carries significant risk.
Nikolas Kozloff is the author of Revolution! South America and the Rise of the New Left. Follow him on Twitter here.