Ecuador’s possible scrapping of a bilateral investment treaty with the United States could lead to loss of American investment in the country, Washington’s envoy warned Monday.
“If the bilateral investment treaty is canceled that would obviously have a negative effect because US companies would be afraid to invest,” Ambassador Adam Namm said in an interview published in the local economic weekly Lideres.
Namm comments referred to the government’s recent decision to carry out a review of its 26 international accords in response to concerns they undermine Ecuador’s economic sovereignty.
A commission conducting the review is due to report its findings in mid 2014.
The government had already indicated it considers certain similar agreements with France, Germany, Britain, Ireland and Sweden to be over.
The US ambassador underscored the “great value” of such accords for foreign companies, saying they allow for any disputes to be handled by international arbitration courts.
This, Namm added, “generates protection and confidence.”
Correa, however, sees such US or European-based tribunals as biased in favor of multinational companies and has proposed the creation of arbitration centers in South America.
In September, an arbitration panel in the Hague gave US oil giant Chevron an important procedural victory in its battle against a $19 billion fine by Ecuador for polluting the Amazon basin region.
Correa has called for a global boycott of the California-based company and warned of the risk of a state bankruptcy if the panel decides in favor of it.
Washington, often criticized by Correa, is Ecuador’s main trading partner with exchanges in 2013 that could reach $17 billion, according to Namm.
According to the State Department, the two countries have had a bilateral investment treaty in force since 1997.
[Image via Agence France-Presse]