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ECUADOR REFUTES CHEVRON ARGUMENTS

Today, January 15th, the Subcommittee on General System of Preferences (GSP), an agency of the Office of the United States Trade Representative (USTR), held a hearing to evaluate Chevron’s 2012 request to withdraw or suspend Ecuador’s GSP benefits for allegedly flouting arbitration awards.

During the hearing, Francisco Borja, Ecuadorian Ambassador to the United States, reiterated Ecuador’s commitment to work for a fair and mutually beneficial bilateral relationship with the United States and highlighted the recent signing of an unprecedented agreement with the Department of Justice to defend the rights of Ecuadorians in the United States.

“We also have a fruitful cooperation with concrete results in areas, such as maritime interdiction, judicial cooperation, and in our common goal to fight terrorism and drug trafficking, as well as significant developments in the bilateral trade relationship. These are just some of the subjects in our broad bilateral agenda that we are committed to moving forward,” stressed Ambassador Borja.

In his speech before the subcommittee, Ambassador Borja stated to be “genuinely concerned for the fact that a private company is trying to weaken the strong ties between our two nations.” Ecuador calls for the legal issues between Chevron and Ecuador to be resolved by the pertinent tribunals in charge of such disputes.

Finally, Ambassador Borja emphasized that “Ecuador has always met its arbitration obligations and our complying history proves we meet the eligibility criteria of the GSP.”

Chevron claims that Ecuador has failed to comply with various arbitration awards issued by The Hague Tribunal in regards to the private litigation between the Company and the indigenous communities of the Ecuadorian Amazon. During the hearing the legal team from the Ecuadorian Embassy demonstrated that Chevron has a track record of trying to negatively affect the commercial relationship between Ecuador and the United States; and that with this new attempt, it seeks to influence the outcome of the pending arbitration process, that the partial arbitration awards that Chevron is claiming are subject to change and are not a reason to end the preferential treatment because the GSP refers to final arbitration awards; that Ecuador has been compliant of its international obligations, and that the payments that Chevron is claiming are part of a pending case.

Ecuador’s lawyer, Eric Bloom, stated that Ecuador has been compliant of all the US requirements regarding arbitration awards and that Ecuadorian courts have acted according to the law and in good faith. Bloom also stated that “the validity of the interim awards is under revision,” so currently there is no breach of obligations. “Chevron is asking the USTR to determine Ecuador’s tariff preferences in the middle of a dispute,” he added. Bloom urged the Subcommittee “to let the legal process continue its course and to refrain from pre-judging issues that are being contested at the moment.”

The USTR does not have a set deadline to make a decision on this petition. Ecuador will continue to be a beneficiary of the GSP while the process is still open. The Ecuadorian-American Chamber of Commerce (AMCHAM), which brings together American companies that operate in Ecuador, and the Ecuadorian Federation of Exporters (Fedexpor), have supported Ecuador’s position in letters sent to the USTR, highlighting the benefits that the GSP generates in both countries.

The GSP is a tariff preferences system that benefits more than 120 countries, whereby Ecuador exports fruits, natural fruit juice, vegetables, seafood, wood, flowers, electric conductors, ceramics, and other goods to the United Stated with preferential tariffs through the GSP. This program has helped Ecuador diversify its exports and has facilitated new industry development and investment, which also has generated significant employment and income opportunities for vulnerable sectors of the mountain region and those areas near to our borders, prone to illegal activities related to transnational crimes.

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