Ecuador lawmakers vow to reclaim seats in Congress

QUITO, March 19 (Reuters AlertNet) - Ecuador's fired opposition lawmakers on Monday vowed to break a police cordon and reclaim their parliamentary seats, keeping up the pressure on President Rafael Correa in the volatile Andean state.

Fifty-seven lawmakers have been fired for trying to block a referendum the populist president is proposing. The vote would set up a body to reduce the influence of congressmen in the judiciary and state companies.

The lawmakers refuse to accept their dismissal and last week barged through a police cordon to get into Congress. They promised to do the same on Tuesday.

"Either we all enter Congress or no one will," said Washington Vallejo, one of the 57 fired lawmakers. "We will defend Congress."

Correa, a leftist ally of Venezuelan President Hugo Chavez, since taking office in January has vowed to break the power of political elites, largely seen as corrupt, in the world's top banana exporting nation.

The fight with the lawmakers is the first major challenge for a president who has vowed to restructure the national debt and renegotiate oil deals. Congress has been instrumental in ousting three presidents in a decade.

Violence in Ecuador heats up Congress-Correa feud

By Alonso Soto, March 14, 2007.

QUITO (Reuters) - Ousted Ecuadorean lawmakers scuffled with police and a shooting wounded two of their supporters on Tuesday, worsening discord between Congress and President Rafael Correa in the volatile Andean nation.

About 20 lawmakers barged through a cordon of police, who used riot shields to try to stop them from entering Congress, as tear gas billowed in the air. One legislator was carried away on a stretcher after he was knocked to the ground and injured.

Two congressional aides were lightly wounded by gunshots. Lawmakers said their supporters were targeted by unknown gunmen on motorcycles, but police said the two men had been hit by stray bullets from an unrelated robbery.

Dozens of Correa supporters had earlier traded kicks and punches with protesters backing the dismissed lawmakers.

"We are in a state of emergency and we are being hunted," fired legislator Gloria Gallardo told a television station from inside Congress. "Police are willing to kill lawmakers."

In a radio interview before the shooting, Correa urged his supporters to avoid violence. "Do not let yourselves be provoked by these people who are trying to cause chaos," he said.

The leftist economist, an ally of Venezuelan President Hugo Chavez, has demanded that the fired lawmakers be replaced by substitutes from the same parties, in a move that could boost his clout over an unruly and widely unpopular Congress.

Fifty-seven legislators have refused to accept an electoral court decision that fired them last week. They had sought to reverse an earlier ruling that would allow the highly popular Correa to hold a referendum to weaken Congress' powers.

Changes proposed by the referendum are meant to lessen political influence in the judiciary and force lawmakers to live in the small constituencies they represent.

Tuesday's violence forced Congress to suspend sessions for a week.

The dispute has become the biggest challenge to the leftist's presidency since he took office in January in a country where Congress played a pivotal role in ousting three presidents in the last decade.

Investors, already spooked because Correa has threatened to skip some foreign debt payments, worry that the president will struggle to govern despite his high popularity.

"The escalating political confrontation carries the risk of further erosion of the institutional backbone of the country, which could exacerbate perennial weak governability conditions," senior Goldman Sachs economist Alberto Ramos said in a research note.

Ecuador is the world's top banana exporter and South America's No. 5 oil producer.

(Additional reporting by Alexandra Valencia and Guillermo Granja)

Ecuador president demands lawmakers accept firing

By Alonso Soto

QUITO (Reuters), Fri March 9, 2007 - Ecuadorean President Rafael Correa ordered 57 lawmakers on Friday to accept a court ruling that fired them, intensifying a power struggle with Congress in the politically unstable Andean country.

Ecuador's electoral court ruled this week that the 57 must step down for trying to oust the court's president in legal wrangling over proposed changes to the constitution that could weaken Congress.

The popular leftist president stepped into the fight with a speech from a balcony of the presidential palace to student supporters, who like many Ecuadoreans back his efforts to use reforms to cut the power of traditional political elites.

"Those 57 lawmakers should comply with the law for their actions and they should be replaced by their substitutes. That is the way it should be," Correa told the cheering crowd.

If the lawmakers step down, they will be replaced by members of their own parties, ensuring Congress remains an opposition body.

But the removal of more than half of the elected legislature would strip power from influential Correa opponents in a Congress which has been pivotal in ousting three presidents in the last decade.

Despite lacking support from a traditional party, Correa won power last November with a pledge to rewrite the constitution to strip Congress of much of its power.

He is a close ally of Venezuelan President Hugo Chavez, whose supporters rewrote the constitution to boost his powers soon after he was first elected.

Congress has at times accepted Correa's moves against it. But in recent weeks lawmakers have increased their opposition to a referendum on the constitution scheduled for April 15.

Congress suspended its session on Thursday after police surrounded it to enforce the court ruling.

The feud highlights the charismatic Correa's troubles governing a nation which has had eight presidents in a decade.

Still, the U.S.-educated economist is highly popular as many blame lawmakers for chronic instability in the world's top banana exporter and South America's No. 5 oil producer.

LEGAL BATTLE

Congress had approved Correa's plan for a referendum, but opposition legislators say he then changed its text and they now want the vote halted.

They voted this week to fire the election court's president in a move to delay the referendum and secure an opposition majority in the court.

The electoral body hit back, ruling congressmen broke the law and would lose their political rights for a year.

The proposed constitutional changes are meant to reduce the influence of politicians in the judiciary and could force legislators to live in the constituencies they represent.

Correa has no official representatives in Congress, and opponents say he is pushing reform to extend his powers.

A former economy minister, Correa has rattled Wall Street and Washington with plans to restructure foreign debt, rewrite oil contracts and end an agreement giving the U.S. military use of an air base for counter-narcotics operations.

Still, foreign investors also worry the power struggle could weaken Correa's ability to rule and kill off another Ecuadorean government in its infancy.

Ecuador Furious At EU Tariffs, Reignites Banana Wars

Cattle Network, February 27, 2007

After months of threats and backroom talks, Ecuador, the world's biggest banana exporter, Monday informed the European Union that it has asked lawyers at the World Trade Organization to dust off its files and reopen, with new threats of fines and sanctions, more than 15 years of previous legal battles. And while Ecuador is wading into this battle alone, other disgruntled nations may join.

Ecuador accuses Europe of imposing illegally high tariffs to protect banana producers on its far-flung Canaries Islands and remaining Caribbean territories, as well as those in its former African and Caribbean colonies.

The battle pitches the world's largest producer against the world's largest consumer of fruit which, stacked high in European supermarkets, yields unrivaled profits for multinational producers and retailers. It also underlines how, despite free trade rules, Europe continues to protect its own producers and those in its former colonies.

Critics say large buyers and producers such as Chiquita Brands International (CQB), Dole Food Co. (DOLE.Xx) and Del Monte Foods Co. (DLM), are playing both sides of the dispute, bringing pressure to bear in the trade dispute to prop up their Latin American operations, while also setting up large scale production in West Africa at the expense of the livelihoods of small African and Caribbean banana farmers.

Behind the battle is a shift in banana production away from Latin America to former European African colonies such as Cameroon, Ghana and the Ivory Coast.

"With Dole and Chiquita both involved in new planting in West Africa, with their industrial sized production facilities on traditional tribal lands, Ecuador is looking at increased competition from a region which also benefits from zero tariffs under the current system," says Alistair Smith, International Coordinator at Banana Link, a not-for-profit lobby group campaigning for sustainable banana trade and funded by grants from a range of charities.

The big losers under any new system will be the Caribbean high-cost producers, he says.

Juan Holguin, Ecuador's ambassador at the WTO and trade negotiator on the issue says his country has no choice but to resort to legal action after months of talks with Brussels yielded what he considers to be empty promises to ease the farmers' plight.

"General offers were made, but nothing concrete was put on the table," he says.

European Union officialssay E.U. negotiators have variously offered money to help Ecuador diversify its economy away from the fruit and also considered the idea of setting up an account to raise environmental standards, using some of the windfall Europe has accrued from the new tariffs to do so.

Brussels officials say they were caught off guard by Ecuador's stance.

"Ecuador has not given the possibility of finding a negotiated solution enough time," says E.U. spokesman Peter Power. "This would have been the best solution for all parties concerned."

For Ecuador, the line is clear: in the year since the new tariffs came into place in January 2006, its exports to the E.U. fell 3%. Meanwhile, Ivory Coast, whose ex-colony status secures it duty-free access to Europe up to a 775,000 ton ceiling, saw sales soar 26.6% in the same period.

"Ecuador believes it's unfair to give tariff preferences to Africa, when African plantations are operating on a similar scale, and on top of that, with lower wage costs," says Smith at Banana Link.

The banana trade has enflamed passions around the globe for years, and though it's unclear whether a new panel at the WTO will solve the issue, it's likely the fight will once again be heated.

Officials are already expecting other countries to enter the fray against Europe, as they have done in the past. In 1999, Washington was awarded the right to sue Europe for $191 million in damages because the bloc refused to reform an illegal quota system on Latin American banana imports.

Under a truce brokered in 2001, the E.U. agreed to implement a tariff system for the fruit by 2006. The E.U. went ahead and imposed a new fixed-tariff system in January, 2006.

The problem this time is the new level of tariffs. Since last January, the E.U. has charged EUR176 a ton for Latin American banana imports. Ecuador says this duty is too high as it hampers its exports. They say the current E.U. duties add four euros to every box of fruit exported to Europe.

At the same time, former colonies can sell up to 775,000 tons a year of bananas to Europe duty-free.

"This loss of market share remains the central argument at the consultations," says Ecuador's Holguin. Ecuador wants the WTO to mediate a compromise tariff.

However the E.U. disputes the loss of market share and says that while Latin America's market share dropped as a whole, and someindividual countries' sales fell, the region's overall sales boomed. Stimulated by demand for bananas from the E.U.'s newly prosperous Eastern European states, producers have fed the market despite the new tariff.

"Banana imports from Latin American countries have increased 8% this year," says E.U. agriculture spokesman Michael Mann. "So the idea that their trade has been restricted by our new tariff is not true."

Ecuador is not alone in disagreeing strongly with this view. Colombia, Panama, several Caribbean Islands and the U.S. sat in on the debates between Ecuador and Europe of the past months, and may participate in a similar vein again. Officials at the Panama and Colombia embassies in Geneva could not be reached for comment.

While attempting to avoid antagonizing the U.S. and Ecuador, the E.U. is also struggling to satisfy its former African, Caribbean and Pacific colonies. For many of these countries, bananas represent a key export. They contribute a total of about 15% of GDP for the former U.K. colonies of Dominica, St. Vincent and St. Lucia islands, according to an Oxfam report on Caribbean bananas.

These small island producers have in the past struggled to compete with their Latin American neighbors. If the E.U. imposed the same tariff on these small states as it does on exporters in Latin America, Oxfam says the island growers would go out of business.

Yet while Europe struggles to find a tariff agreeable to producers on both sides of the Atlantic, its current tariffs benefit big multinationals most, say anti-poverty campaigners.