Free trade vs. economic pain in Ecuador
The country is split over a possible permanent trade deal with the US.
A quarter of the bouquets of roses sold across the US are first cultivated, cut, and bundled in Ecuador – in greenhouses that dot this valley of snow-capped peaks near the equator where roses are said to strive straight for the sun.
Ecuador's $350 million flower industry has transformed communities across the Cayambe Valley, nestled in the Andes about 37 miles north of the capital, Quito. Thanks in large part to US trade benefits that have been in place for 15 years, 70 percent of Ecuador's flowers head to the US.
But the heady days for rose growers here could be numbered. Congress agreed Dec. 7 to extend benefits for six months that allow roses and other goods to enter the US duty-free. But the trade perks, which were originally conceived to ply Ecuador, Colombia, Peru, and Bolivia away from producing narcotics, are not permanent. Bilateral trade agreements were intended to eventually replace them.
While Colombia and Peru have each agreed on bilateral deals that are now awaiting ratification by the US Congress, Ecuador's newly elected leftist president says he is adamantly opposed to a permanent trade deal. President-elect Rafael Correa, an American-educated economist, said such a pact could be "tremendously harmful" – a stance that puts the Cayambe region on edge and the country's 65,000 flower jobs in question.
"The industry is very nervous," says Pablo Monard, Cayambe's regional representative for Expoflores, a national flower growers' association, under a greenhouse where rows of brilliant orange and pink roses bloom.
In Cayambe, as in agricultural regions across Peru, Colombia, and Bolivia, the US Congress's six-month extension of the Andean Trade Promotion and Drug Eradication Act (ATPDEA), which was set to expire at the end of this month, will provide temporary relief. Exports of covered products reached $11.5 billion in 2005, up 37 percent from the year before, according to the US International Trade Commission.
But few see an extension as a long-term solution. As long as the country appears unwilling to press forward with a bilateral agreement, some fear that Ecuador could also lose out on its preferential trade benefits.
"You have to reward your friends, those who do their part," says Fernando Santos, a law professor at Las Americas University in Quito, "not the rascals."
With roses generating thousands of jobs, the Cayambe Valley is today one of the few regions in Ecuador that attracts new residents. The valley's natives remember the area when it was a tiny community of agricultural producers.
"What would we do without the investment of flowers?" says Mario Castro, the head legal counsel at the regional government of Cayambe. Nearly 50 percent of cultivable land in the region is dedicated to flowers, and the population has increased by 30,000 in the past 15 years, he says. "Cayambe would turn into a bunch of ghost towns."
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