U.S., Ecuador: Cooperation Persists Despite Tensions

On July 31, 2013, the Andean Trade Promotion and Drug Eradication Act — a preferential trade agreement between Ecuador and the United States — is set to expire. The agreement gives many Ecuadorian products duty-free access to U.S. markets in exchange for Ecuador's cooperation on counternarcotics efforts. There is some support in the U.S. government for letting the agreement expire to chastise Ecuador for certain actions it has taken against U.S. interests.

While U.S.-Ecuadorian relations have been tense over the past several years, the two parties still cooperate in key areas. If relations between Ecuador and the United States deteriorate further, some trade and investment relationships could be at risk. But because Ecuador is reliant on the United States for trade and because the United States wants counternarcotics operations in Ecuador to continue, a complete breakdown in bilateral relations is unlikely. And since Ecuador's exports are dominated by oil, if the trade agreement were allowed to expire, the direct economic impact on Ecuador would be relatively limited.