Laa121003 atpdea ecuador oct 2012

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Futuro de las preferencias comerciales andinas para Ecuador

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Laa121003 atpdea ecuador oct 2012

  1. 1. www.thedialogue.org Wednesday, October 3, 2012 FEATURED Q&A BOARD OF ADVISORS Is Ecuador in Danger of Losing U.S. Trade Preferences? Diego Arria Jon Huenemann U.S. industry groups, including Q Director, Vice President, sumers and businesses with increased Columbus Group U.S. & Intl Affairs, the U.S. Chamber of Commerce freedom for Ecuadorean products that Philip Morris and the National Association of have been recognized as low cost and high Genaro Arriagada International Nonresident Senior Manufacturers, earlier this quality, without competing with U.S. Fellow, James R. Jones month called on the Obama administration products. The ATPA is also in the security Inter-American Co-chair, to suspend Ecuadors trade benefits under interests of the United States and the Dialogue Manatt Jones the Andean Trade Preference Act. The entire hemisphere, as it remains an Global Strategies LLC groups say Ecuador has flouted due important tool for Ecuadors fight against Joyce Chang Global Head of Craig Kelly process and failed to respect the rights of narcotics trade in the Andean region. Emerging Markets Vice President, Americans who have invested in the South Contrary to the claims of Chevron and its Research, JPMorgan The Cohen Group American country. Is Ecuador in danger of partners that it supports financially, Chase & Co. losing U.S. trade preferences? What is the Ecuador has always acted in good faith John Maisto W. Bowman Cutter Director, current investment climate in the country? Former Partner, Continued on page 2 U.S. Education Finance What would be the consequences for E.M. Warburg Group Pincus Ecuadors economy if it loses the trade Nicolás Mariscal preferences? Dirk Donath Chairman, Managing Director, Grupo Marhnos Nathalie Cely, Ecuadors A Eton Park Capital Management Thomas F. ambassador to the United McLarty III States: "As many local U.S. busi- Jane Eddy President, nesses have attested to via letters Managing Director, McLarty Associates Corporate & Govt. to the U.S. Trade Representative, the U.S.- Ratings Group, Carlos Paz-Soldan Ecuador relationship remains strong, and Standard & Poors Partner, Ecuador continues to prove a stable and DTB Associates, LLP reliable partner for U.S. investors and Marlene Fernández Corporate Vice Beatrice Rangel businesses. According to the most recent Regions Economic Growth to President for Director, USTR report, more than $5.5 billion in Slow This Year to 3.2%: ECLAC Government Relations, AMLA Consulting LLC U.S. goods are exported to Ecuador each Arcos Dorados year—helping fuel American jobs and Economic growth in Latin America and José Antonio Ríos Jason Hafemeister Chief Executive Officer, economic growth. Additionally, the ATPA the Caribbean will slow this year to 3.2 Vice President, Vadium Technology Inc. is essential for economic growth and jobs percent, lower than previously expected, Allen F. Johnson & in Ecuador, sustaining thousands of jobs the Economic Commission for Latin Andrés Rozental Associates for farmers, transportation and distribu- America and the Caribbean, led by Alicia President, Peter Hakim Rozental & Asociados tion employees, and vendors and con- Bárcena, announced Tuesday. See story President Emeritus, and Senior Fellow, sumers both in the United States and on page 2. Inter-American Brookings Institution Ecuador. A healthy and open trade rela- Dialogue File Photo: United Nations. Everett Santos tionship also provides American con- Donna Hrinak President, President, Boeing Brazil DALEC LLC Inside This Issue Shelly Shetty Head, Latin America FEATURED Q&A: Is Ecuador in Danger CIA May Have Been Targeted Sovereign Ratings, of Losing U.S. Trade Preferences?......................1 in Mexico Shooting: Official .................................3 Fitch Inc.-Start Content- Economic Growth in Region Seen Banco do Brasil Unlikely to Issue Slowing to 3.2% This Year: ECLAC.......................2 Additional Debt After $1.75 Bn Sale ...................3 Santos Administration Proposes The Dialogue Continues: What Did Peña Nieto Tax Reform to Cut Unemployment ......................2 Accomplish on His Latin American Tour?. .........3Copyright © 2012, Inter-American Dialogue Page 1 of 4
  2. 2. Inter-American Dialogue’s Latin America Advisor Wednesday, October 3, 2012 NEWS BRIEFS Economic News largest economy, a reduction from its pre- vious forecast of 3 percent. Panama is Santos Administration Proposes expected to post the largest economic Tax Reform to Cut Unemployment Economic Growth in Region Seen expansion this year, at 9.5 percent, fol- Colombian Finance Minister Slowing to 3.2% This Year: ECLAC lowed by Haitis 6 percent, according to Mauricio Cárdenas plans to present the agency. Bolivia, Chile, Costa Rica, Economic growth in Latin America and Nicaragua and Venezuela are forecast to tax reform legislation to Congress as the Caribbean will slow this year to 3.2 grow by approximately 5 percent, while the administration seeks to cut the percent from last years 4.3 percent, main- Mexico will see 4 percent growth, it added. countrys high rate of unemploy- ly due to weaker growth rates in Brazil and ment, Bloomberg News reported Argentina, the Economic Commission for Tuesday. Colombias unemployment Latin America and the Caribbean said rate was 9.7 percent in August, high- The new figure is lower than the Tuesday, BBC News reported. The new fig- er than most of the regions major ure also was lower than the 3.7 percent 3.7 percent growth rate that economies. The proposed legislation rate that ECLAC had predicted in June. ECLAC had predicted in June. would lower the tax burden that "Weakness in the global economy, caused employers must pay to the govern- mainly by difficulties in Europe, the ment for each worker and would United States and China, has affected also simplify the sales tax regime growth in Latin America and the The only country in the region expected to Caribbean," ECLAC said in a statement. experience an economic contraction is and help reduce tax evasion, said The report by the U.N. agency, which is Paraguay, whose economy could shrink by Cárdenas. led by Alicia Bárcena, said private con- 2 percent. As a sub-region, the Caribbean Fitch Ups Bolivias Credit sumption in the region is "the main driver is expected to post 1.6 percent growth, Rating to BB-minus of regional growth, thanks to the growth ECLAC said. For next year, the U.N. in labor markets, increased credit and—in agency said Latin America and the Fitch Ratings upgraded Bolivias some cases—remittances." Brazil and Caribbean are likely to experience 4 per- credit rating to BB-minus on Argentina are expected to post relatively cent growth, Reuters reported. It expects Tuesday, bringing it in line with the slow growth, with Brazils economy grow- Brazils growth to pick up to 4 percent in ratings of Standard & Poors and ing 1.6 percent this year and Argentina 2013, with Mexico also seeing 4 percent Moodys Investors Service, Reuters expanding 2 percent, said ECLAC. Brazils growth. ECLAC predicted Argentinas reported. Fitch cited moderate infla- finance ministry most recently said it economic expansion will be 3.5 percent tion, diversification of financing, expects 2 percent growth in the regions next year. stable currency and improvements Featured Q&A in the countrys debt profile. Continued from page 1 However, "accommodative policies, Ramiro Crespo, president of A and complied with unfavorable final rapid credit growth and rising real judgments. To cite two recent examples, Analytica Securities in Quito: estate prices, if sustained, could cases involving Occidental and Duke "The ATPA is linked to increase vulnerabilities in the broad- Energy resulted in rulings unfavorable Ecuadors cooperation in fight- er financial system," Fitch said. to Ecuador. In both cases, the govern- ing illegal drug production and traffick- ment complied with the judgments and ing. The influence of narcotics cartels Scotiabank Names Wright compensated the appropriate parties. It may well be growing here, but to accuse as CEO of Mexican Unit is also worth recalling that Ecuador has Ecuador of failing to cooperate with U.S. Toronto-based Bank of Nova Scotia, been awarded many rulings favorable to law enforcement efforts is unfair and or Scotiabank, has named Troy its position. We reject any attempts by thus there is no reason to strip it of its Wright as the president and chief Chevron and its partners to mislead benefits under ATPA. That said, it is very executive officer of its Mexican unit, U.S. investors and policymakers, and are bad for Ecuadorean exporters, U.S. The Canadian Press reported troubled by its attempts to hold thou- importers and investors of whichever Tuesday. He most recently was the sands of American and Ecuadorean jobs nationality that Ecuadors government hostage to further its own self-interests. has, for more than five years, failed to banks executive vice president of We remain confident that the relation- design and implement an international retail distribution for Canada. ship will continue to thrive and provide trade policy that safeguards its access to Wright previously worked in several economic and security benefits for all its most important export markets, the capacities for Scotiabank in Latin our people." United States and the European Union. America, including as its chief exec- utive of operations in Puerto Rico. Continued on page 4Copyright © 2012, Inter-American Dialogue Page 2 of 4
  3. 3. Inter-American Dialogue’s Latin America Advisor Wednesday, October 3, 2012Political News The Dialogue ContinuesCIA May Have Been Targeted What Did Peña Nieto Accomplish on His Latin American Tour?in Mexico Shooting: Official QStrong circumstantial evidence suggests Mexican President-elect However, Peña Nieto is focused onthat Mexican federal police officers who Enrique Peña Nieto said Sept. improving the economy and has a planfired on a U.S. Embassy vehicle in August 17 that he seeks a closer and to strengthen free trade with the rest ofmay have been targeting the occupants in more solid relationship with Latin America in order to achievean assassination attempt for an organized Guatemala. He made the statement in greater diversification and reduce thecrime group, the Associated Press report- the Central American nation at the vulnerabilities associated with the eco-ed Tuesday, citing a senior U.S. official. A beginning of a weeklong tour that also nomic challenges of the United States.Mexican official familiar with the case took him to Colombia, Brazil, Chile, In this sense, the Pacific Alliance, madealso told the wire service that authorities Argentina and Peru. What did the trip up by Chile, Peru, Colombia andare looking into whether the Beltran accomplish? What parts of the relation- Mexico, has a lot of potential toLeyva drug cartel was behind the attack, ship between Mexico and Central increase trade with the emergingwhich happened Aug. 24 on a rural road American countries need to be economies of Asia. Also in this area, innear Cuernavaca. "Thats not a Were strengthened? What are the most criti- order to expand leadership and trade,trying to shake down a couple people for cal economic and business ties Mexico needs to generate a more coop-a traffic violation sort of operation. between Mexico and South America? erative relationship with Brazil to buildThats a We are specifically trying to kill a Latin American development corri- Nicolás Mariscal, member of Athe people in this vehicle," an unnamed dor driven by these two poles. Several U.S. official told the the Advisor board and chair- countries in Latin America are stuck in AP. "This is not a man of Grupo Marhnos in the middle-income trap and in order to Whoops, we got the Mexico City: "The main escape it, need economic policies that wrong people. " Two achievement of President-elect Enrique are much more aggressive and prag- CIA officers were Peña Nietos tour was that it communi- matic. Every Latin American country is wounded in the cated the message that the next govern- valuable for Mexicos foreign relations shooting. Federal ment has the political will to pay more and there are specific issues to deeply police have said that attention to Central and South develop. For example, security with the officers were America in order to promote the Colombia, the oil industry with Brazil,Ostick investigating a kid- regions development and address the strengthening of democracy andFile Photo: MercoPress. napping in the area issues of common social and economic social gains with Chile and a common and shot at the concern with renewed strategies. A agenda against organized crime withembassy SUV by mistake. The U.S. State growing challenge is the globalization Guatemala."Department declined to comment on the of crime in its various forms: drug traf-case. "We will not comment on an ongo- ficking, human trafficking anding investigation," said State Department weapons trafficking, among others, Editors note: The above is a continua-spokesman William Ostick. "This is a which should be addressed interna- tion of a Q&A published in the Sept. 27matter of great significance to both our tionally with common policies. issue of the Advisor.countries and we will continue to coop-erate with Mexican authorities in theirinvestigation." In addition to the two CIA Company News Pereira Coelho, the banks managing direc-officers, the SUV was carrying a Mexican tor for finance, told the wire service. Thenavy captain. The vehicle was headed to a Banco do Brasil Unlikely to Issue banks debt sale this week was its largest-military installation when a carload of Additional Debt After $1.75 Bn Sale ever such offering, said Coelho. The seniorgunmen opened fire and began chasing dollar-denominated bonds, rated byit. Three other cars then began chasing Banco do Brasil is not likely to sell addi- Moodys as baa1, were sold at 98.98 centsthe SUV as gunmen of all four vehicles tional debt this year after it generated $1.75 on the dollar for a yield of 4 percent. Theshot at it, according to the Mexican navy. billion on Tuesday through the sale of 10- last time the bank sold similar securitiesTwelve Mexican police officers have been year debt, a top executive at Brazils largest was in 2010. The sale helped to boost con-detained in connection with the shooting lender said Tuesday, Reuters reported. fidence in Brazilian bank bonds after theand are being held under a form of house Banco do Brasil has "attained the goal of recent liquidation of Banco Cruzeiro doarrest. Fifty-one officers have testified in perfecting its yield curve thanks to very fre- Sul, which may result in bondholders los-the case. quent issuances," said José Mauricio ing their investments.Copyright © 2012, Inter-American Dialogue Page 3 of 4
  4. 4. Inter-American Dialogue’s Latin America Advisor Wednesday, October 3, 2012 -End Content-Featured Q&AContinued from page 2 Latin America Advisor is published every business day by theATPA is a dying policy, as officials have comment. USTRs 2012 report to Inter-American Dialogue, Copyright © 2012acknowledged. But while competitors in Congress is the sixth; it concludes the Erik BrandCentral and South America enjoy duty- program continues to make progress but General Manager, Publishingfree access to the United States, the that Ecuador has failed to comply with ebrand@thedialogue.orgCorrea administration, for reasons of ide- the terms of the bilateral investment Gene Kuletaology and propaganda, has preferred to treaty between Ecuador and the United Editoraim for marginal new markets, particu- States. The ATPA expires in July 2013. gkuleta@thedialogue.orglarly Iran, with no tangible economic suc- The U.S. government will likely consider Rachel Sadoncess and a severe loss of international whether to reauthorize ATPA/ATPDEA Reporter, Assistant Editorprestige. ATPA has the drawback that it which today benefits only Ecuador. rsadon@thedialogue.orgrequires a periodic review, making it Much has changed in the region sincemore difficult for investors, suppliers and this legislation was enacted in 2002. TheU.S. importers to calculate whether con- resource nationalism of some left leaning Inter-American Dialogueditions will remain stable in the mid- and governments in the Latin America, espe-long-terms. A trade agreement under any cially during record high oil prices in Michael Shifter, Presidentlabel would be a vast improvement for all 2006-2008, now seems to be yielding to Peter Hakim, President Emeritusconcerned, including importers who can increased pragmatism. Today, the region Genaro Arriagada, Nonresident Senior Fellowrely on their suppliers, exporters on their is looking for international investors to Sergio Bitar, Nonresident Senior Fellowbuyers and company employees in both help develop big, deep or unconvention-countries. For Ecuador, a free trade agree- al resources with new technology. China Joan Caivano, Director, Special Projectsment could help industries with higher has invested heavily in Ecuador but more Maria Darie, Director, Finance & Administrationemployment and value-added, rather investment and new technology will be Paul Isbell, Visiting Senior Fellowthan oil, which will of course continue to needed. Treating existing investors fairly Claudio Loser, Senior Fellowenter the United States duty free." helps attract new ones. Ecuadors presi- Nora Lustig, Nonresident Senior Fellow dential elections are next February and Myles Frechette, international Margaret Myers, Director,A Rafael Correa will likely be re-elected. China and Latin America Program trade and business consultant The ATPA/ATPDEA creates 320,000 and former U.S. ambassador to Ecuadorean jobs. These jobs allow Manuel Orozco, Director, Remittances and Development Program Colombia: "The Andean Trade Ecuador to maintain counternarcoticsPreference Act (ATPA), as amended by cooperation, not only with the United Tamara Ortega Goodspeed, Senior Associate, Educationthe Andean Trade Preference and Drug States but regionally, because the grow-Eradication Act (ATPDEA), requires the ing regional demand for drugs has great- Jeffrey Puryear, Vice President, Social Policyoffice of the United States Trade ly increased transnational crime. If theRepresentative (USTR) to submit a year- United States were to reauthorize this Latin America Advisor is published everyly report to Congress on the operation of legislation, Ecuadorean public support business day, except for major U.S. holidays, bythis legislation. The laws objectives are for President Correa might allow him to the Inter-American Dialogue at:to promote economic development, seek a more permanent trade arrange- 1211 Connecticut Avenue NW, Suite 510diversify exports, consolidate democracy ment with the United States." Washington, DC 20036and reduce narcotrafficking by providing Phone: 202-822-9002 Fax: 202-822-9553 www.thedialogue.org ISSN 2163-7962sustainable economic alternatives todrug crop production. The petitions for The Advisor welcomes reactions to the Subscription Inquiries are welcomed atsuspending Ecuadors benefits under Q&A above. Readers can write editor freetrial@thedialogue.orgATPA/ATPDEA by business groups are in Gene Kuleta at gkuleta@thedialogue.org The opinions expressed by the members of theresponse to USTRs latest request for with comments. Board of Advisors and by guest commentators do not necessarily represent those of the publisher. The analysis is the sole view of each Advisor and does not necessarily represent the views of their respective employers or firms. The information in this report has been obtained from reliable sources, but neither Latin America Advisor its accuracy and completeness, nor the opinions based thereon, are guaranteed. If you have any ques- See farther. tions relating to the contents of this publication, contact the editorial offices of the Inter-American Dialogue. Contents of this report may not be repro- duced, stored in a retrieval system, or transmitted SUBSCRIBE TODAY without prior written permission from the publisher.Copyright © 2012, Inter-American Dialogue Page 4 of 4

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