Foreign Ministry pushes for the Free Trade negotiations, while targeting Colombian border issues

In recent times, Ecuador’s Foreign Affairs Ministry has implemented aggressive initiatives to enhance the country’s international image in political and economic arenas. To affirm Ecuador’s commitment to fighting terrorism on all levels and in all manifestations, the ministry expressed the country’s solidarity and condolences to the United States after this year’s tragic events of September 11th. In its message, the ministry stressed that Ecuadorians are devoted to the prevalence of peace and respect for human rights. Ecuador’s leaders, as all world leaders, must face the reality that international economic relationships are growing in a world facing war and terrorism.

“Ecuador is a country in the midst of development,” declared Foreign Minister Heinz Moeller during debates held at the United Nations General Assembly on November 11th. He went on to say that Ecuador’s foreign policy makers must adapt internal structures to meet the demands of a competitive world that in the past have not effectively acknowledged disparities between highly industrialized economies and those in great need of foreign investment and latest technologies. Moreover, he stated that the gap created between developed and developing countries is growing, owing to financial problems linked to instability of short-term capital, an inability to decrease external debt, and barriers that hinder a truly open international trading system.

Free Trade Area of the Americas
Fortunately, Ecuador’s economic challenges make way for many opportunities. In recognition of its commitment to free trade and equal opportunity, Ecuador was selected to preside over Free Trade Area of the Americas (FTAA), enacted by the 1994 Summit of the Americas held in Miami. An 18-month period extending from April 2001 to October 2002, FTAA calls for creating a free trade zone of 34 countries from Alaska to Tierra del Fuego (to exclude Cuba) and a common market for more than 800 million inhabitants. Ecuador has assumed presidency of FTAA at a crucial time, when the 34 members prepare for negotiations of already presented initiatives. Ecuador’s goal has been to establish the method and modality by which nine groups will individually negotiate market access, investment, services, buying from the public sector, dispute resolution, agriculture, intellectual property, subsidies/antidumping/compensation rights and competition policy.

According to Mentor Villagomez, who directs the presidency of FTAA, “the principal criterion is based on a single undertaking commitment, where nothing is agreed until everything is agreed upon.” Mr. Villagomez, who is also the economic sub-secretary of the Foreign Affairs Ministry, suggests that the FTAA’s most significant advances have been identifying methods of applying differentiated special commercialization treatment to members of the FTAA, and the approval of a program that fosters cooperation and financial assistance for training and infrastructure development in order to improve competitiveness among members.

In the opinion of Minister of Commerce Richard Moss, Ecuador faces new challenges and opportunities as a direct result of FTAA. For this reason, his Ministry is making efforts to convince all economic sectors that through productivity and competitive business practices they can benefit from emerging global trends.

As the FTAA and globalization become more important, small and medium-sized enterprises fear their existence may be threatened. Therefore, Ecuador’s associations and chambers are preparing their members, especially those involved with export of goods and services, for coping with liberalization of trade barriers.

The Foreign Ministry is not only promoting the free trade zone in the Americas, it is also working to strengthen the Andean Community while pushing forward the integration of South America through trade, infrastructure and interconnection. “The Pacific Rim represents an important market for Ecuador, given that it generates 40% of world exports and 38% of the imports,” says Patricio Zuquilanda, Executive Director of the National Committee for the Pacific Economic Cooperation Council. Ecuador is taking all the steps necessary to enter the Asian-Pacific Free Commerce Area and obtain access to a market of 2.4 billion people. The committee is now considering how Ecuador will handle Asian-Pacific competition, which is characterized by high productivity at very low costs.

Northern border with Colombia
Another serious problem facing Ecuador concerns Colombia, its neighbor to the north. The government must determine how to protect its northern frontier region from repercussions of Plan Colombia, such as the displacement of drug plantations to Ecuadorian territory. Plan Colombia, developed by Colombia’s president, Andres Pastrana, lays out fundamental strategies for dealing with Colombia’s major challenges — restoring peace, ending drug wars and strengthening its economy and democracy. Plan Colombia is a $7.5 billion program for which the U.S. government is currently providing $1.3 billion on top of more than $1 billion of previously approved funds. Although the plan is commendable and beneficial to Colombia, it poses significant threats to the peaceful inhabitants of Ecuador’s border provinces.

Foreign Minister Moeller emphasizes that Ecuador fully supports President Pastrana’s initiatives and believes that his efforts should be a top priority for the international community. Moreover, he believes that support should be shown not only to Colombia, but to the entire region, which is directly influenced by events in Colombia. He also points out that Ecuador has clearly shown its commitment to the fight against drug production and trafficking by joining with the United States in promoting initiatives of the 10-year agreement both nations signed in 1999. The agreement allows the U.S. to use the Ecuadorian military base at Manta for the purpose of surveillance and monitoring illegal drug activity in the region. (In accordance with the agreement, the U.S. renovated the base’s runway, making it the longest in South America — 3,129 meters long and 35 meters wide.)

As an avid promoter of peace, the government of Ecuador has developed a non-violent approach to dealing with border issues, even in cases where there is evidence of infiltrations by narco-guerrilla and other informal groups into Ecuadorian territory. The Northern Development Unit (UDENOR) is the government division that implements programs focused on sustaining socio-economic stability in the region without military components.

According to Vinicio Jaramillo, Executive President of UDENOR, Ecuador, which has never been a coca producer, is experiencing the negative effects of Colombia’s narco-guerrilla activities. When drug production in Bolivia was attacked, it moved to Peru, and when Peruvians succeeded in controlling production, it moved to Colombia. Jaramillo’s concern is that “the problem is mostly attacked in Colombia, and Ecuador is very vulnerable, given that 90% of the petroleum fields are located at 50 kilometers from the border with Colombia.”

UDENOR actively addresses the needs of the five border provinces inhabited by nearly 900,000 people. It receives funds from donations and is currently working with USAID on an $8 million program to enhance the infrastructure and improve health, water and sanitation services in the northern area’s poorest communities. The program also includes an ongoing land-titling plan for farmers. According to Lars Klassen, Director of USAID Ecuador, a $30 million budget increase has been approved for 2002 to support programs that USAID is implementing with UDENOR and in collaboration with the International Organization for Migration. He points out that it is of the utmost importance to address poverty in the region as well as feelings of isolation among its people.

According to Mr. Jaramillo, the core purpose of UDENOR is to eliminate poverty and create commercial activities in the region of the five border provinces. To that end, UDENOR is providing them with viable crops and production incentives to offset potential temptations for farmers to plant coca.

To strengthen security in the area, Ecuador’s Armed Forces are reinforcing frontier protection and surveillance. According to Almirante Fernando Donoso, Commander General of the Marine, “this has forced us to change our efforts, modify our infrastructure and armament, and redesign our strategies to adequately confront the situation in the border with Colombia.”

In the past, Ecuador concentrated on protecting its border to the south with Peru and kept its northern border with Colombia open. In the opinion of Lieutenant General Oswaldo Dominguez, Ecuador’s Air Force Commander, the free flow between the two countries led to the rise of communities formed by Ecuadorian-Colombian families, which today makes border control a complicated issue. He also believes that the government of Ecuador must reassess its military policy and assign funds to military forces to develop high-tech surveillance systems and intelligence. He sees this as mandatory to achieving successful control of the Colombian border and eradicating drug production and trafficking in Ecuadorian territory.