Update on Ecuador and the ATPA

I have previously noted the efforts by Chevron to tie the renewal of Ecuador’s preferential trade status under the Andean Trade Preference Act to the Lago Agrio litigation. The Office of the US Trade Representative recently issued a new request for public comment as it prepares a report to Congress on the operation of the ATPA program.

Several commenters submitted views to the USTR. Alfredo Lardizabal, CEO of MIC Food, supported renewal of the ATPA preferences. His company, which employs 20 people, imports “frozen plantain and yucca products,” feared that non-renewal would hurt his business. Olmedo Zambrano, general manager of Ecuadoran firm Eurofish S.A., took the same view; his company exports “tuna in pouch” to the United States and would take a hit if Ecuador lost its preference. Other comments from businesses were similar.

And then there was Chevron. As it did before, Chevron focused on Ecuador’s failure to comply with the award in the BIT arbitration; one of the statutory criteria for ATPA preferences is whether Ecuador “failed to act in good faith in recognizing as binding or in enforcing arbitral awards in favor of United States citizens or a corporation, partnership, or association which is 50 percent or more beneficially owned by United States citizens, which have been made by arbitrators appointed for each case or by permanent arbitral bodies to which the parties involved have submitted their dispute.”

We will continue to follow this corner of the saga.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

6 thoughts on “Update on Ecuador and the ATPA

  1. How on earth is it fair and objective to cover this issue by linking to and quoting from Chevron’s submission, while simply ignoring the directly contrary submissionsand the Ec plaintiffs? The comments from Ecuadorian and American small businesses (apparently considered as acceptable collateral damage by Chevron in its pressure campagin against the ROE) are important, but as used here they just add to the appearance that you went out of your way to cover all viewpoints, when in fact you did not.

    1. That’s a fair point, Aaron. The truth is I didn’t realize you could “scroll down” on the docket page I was looking at and didn’t see the other comments! I have, however, covered the Ecuadoran perspective on this issue previously. I wish you would not attribute nefarious motives to me, but I suppose that’s up to you!

      1. Ok—the “scroll down” explanation didn’t occur to me, so my apologies. It is indeed an old debate at this point, although it’s frustrating that I don’t believe I’ve seen a substantive response anywhere from Chevron or its lobbyists and professors, or from the international arbitration community, as to what the Ecuadorian court ought to have done in the face of the conflict between human rights and investment law obligations that it identified. The suggestions are simply (i) pretend a conflict doesn’t exist, pure head-in-the-sand; or (ii) just submit to the demands. Neither takes the issue seriously.

        1. No worries!

          Maybe this is simplistic: isn’t the answer that Ecuador should have made the human rights arguments to the arbitral tribunal? Maybe the tribunal got the issue wrong, but that’s the risk you take when you agree to arbitrate. It’s not as though there are two competing orders out there, one compelling Ecuador to suspend the judgment and one compelling Ecuador not to suspend the judgment. There is only one order out there, so it seems to me that Ecuador’s obligation is clear. I get the point that due to Ecuador’s internal law Ecuador says it could not comply with the order. That’s precisely the situation the US found itself in in the Medellin case. But don’t you agree that impossibility that stems from domestic law problems (federalism in Medellin, separation of powers in this case) doesn’t relieve a state of its international law obligations? Again, maybe this seems to simplistic, but it seems like a pretty simple issue to me.

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