The Impact of the Andean Trade Preference Act Twelfth ... - USITC

EcuadorThe petroleum sector dominates the Ecuadorian economy, accounting for 40 percent of allexport earnings. 89 In large part because of rising petroleum prices, the value of Ecuador’stotal exports was up by some 25 percent in 2005. 90U.S. imports from Ecuador under ATPA amounted to $4.4 billion in 2005, up by 59 percent(table 2-9). Petroleum accounted for 92 percent of such imports under ATPA, mostly in theform of heavy crude.Heavy crude and pouched tuna were the two leading imports under ATPA and were suppliedprincipally by Ecuador (table 2-7). U.S. imports of both products were discussed earlier inthis chapter.The sharp increase in U.S. imports of heavy crude petroleum from Ecuador (table 2-10)explains why total U.S. imports under ATPA from that country rose so steeply in 2005 (table2-9). The volume of heavy crude imports under ATPA from Ecuador was up by one-thirdduring the year, but higher prices raised the value of such imports by 71 percent. Theopening of a second oil pipeline in September 2003, which doubled Ecuador’s pipelinecapacity, continued to be the most important reason for the country’s increased productionand export volume in 2005. Imports of certain petroleum products from Ecuador alsoincreased significantly, however imports of other petroleum products declined (table 2-10).Notably, in May 2006, the Government of Ecuador cancelled its contract with OccidentalPetroleum Corporation, a U.S. multinational company, regarding part of the company’soperations. Occidental is the largest private entity operating in Ecuador’s oil industry. Thegovernment ordered Petroecuador, the state-owned oil company, to take control ofOccidental’s affected Ecuadorian installations. 91Imports of roses from Ecuador were also up in 2005, making them the second largest importfrom Ecuador under ATPA. However, imports of cut flowers suitable for bouquets weredown from that country. Other notable changes included the sharp increase in U.S. importsof pouched tuna from Ecuador, as discussed above.PeruIn 2005, Peru’s total merchandise exports were up 37 percent. 92 Imports under ATPA fromPeru amounted to $2.3 billion, up 42 percent compared with 2004 (table 2-9). Because oftheir rising prices, petroleum-related products contributed most to this increase, even thoughpetroleum derivatives (HTS 27) were only the third-largest category of imports from Peruunder ATPA, after apparel and copper. U.S. imports from Peru of distillate and residual fueloils and naphthas more than doubled in 2004 and nearly tripled in 2005 (table 2-10). Peruwas the leading supplier of eight of the 20 leading imports under ATPA in 2005: copper89Energy Information Administration, found athttp://www.eia.doe.gov/emeu/cabs/Ecuador/Background.html, June 1, 2006.90EIU, Country Report, Ecuador, Apr. 2006, found at http://www.eiu.com, May 12, 2006.91Bloomberg L.P. “Ecuador to Seize Oil Field from Occidental Petroleum.” May 16, 2006, found athttp://quote.bloomberg.com, June 1, 2006. No continuation of negotiations on a possible U.S.-Ecuador FTAhave been scheduled since this event.92 EIU Country Report, Peru, Apr. 2006, found at http://www.eiu.com, retrieved May 12, 2006.2-23