Ecuador: Protests Against Free Trade Reach Critical Juncture

The Ecuadorian government declared a state of emergency on Tuesday, March 21 after countrywide protests and roadblocks led by indigenous peasants intensified.

Protesters are demanding that President Alfredo Palacio end negotiations for a free trade agreement (FTA) with the United States, which are scheduled to resume on Thursday in Washington. They also demanded the government expel U.S. oil company Occidental from the country. The protests are in their tenth day and growing stronger, despite headlines in the U.S. media over the weekend suggesting that they were "losing steam" and "fading."

Palacio has accused protesters of trying to "destabilize democracy" and of using "deceptive politics that seek to perversely tear apart the nation."

And although the protesters seek to protect, not destabilize democracy, they may very well destabilize Palacio’s already fragile interim government. His administration has been struggling to contain protests and strikes in the oil producing Amazon region over the last few months. Protesters shut down two oil-pumping stations in February, demanding that the government spend more on social programs and infrastructure projects. Ecuador uses less than 8 percent of its GDP on social programs.

Thus far Palacio has refused to halt trade talks with the U.S. and calls to have a referendum on the matter. As a result, protest leaders from the National Confederation of Indigenous Nationalities of Ecuador (CONAIE) promise to shut down Quito, conjuring images of last April’s popular rebellion that ousted Palacio’s disgraced predecessor Lucio Gutierrez. Palacio, like Gutierrez, was initially perceived as a left leaning populist but has proven to be beholden to Washington and U.S. corporate interests.

Rejecting U.S. Economic Hegemony

Although these massive protests are an expression of Ecuadorians’ dissatisfaction with Palacio’s governing, they are more a rejection of free trade and impunity granted to U.S. corporations. Many Ecuadorians believe that if this FTA is signed, the influx of cheap subsidized farm goods from the U.S. will decimate the country’s agricultural sector and will subsequently damage indigenous culture—similar to the way an estimated 1.5 million Mexican farmers were displaced as a result of NAFTA. And they are not alone with their concerns.

According to a 2005 report by the UN Economic Commission for Latin America and the Caribbean (ECLAC):

"The Ecuadorian agricultural sector loses in any scenario. This includes the improbable case in which the U.S. eliminates subsidies, supports and maintains its tariffs at zero. The net effect is marginally negative, but will impact especially subsistence and medium size producers in rice, corn (white and hard), meat and some dairy products."

There is a deep distrust of U.S. motives in Ecuador and displeasure over its perceived excessive influence. Free trade is just one of many examples. Ecuadorians have had plenty of experience in recent history with the damaging costs of doing business with U.S. corporations, with one monumental instance dating back to the 1970’s but continuing to this day. This is when Texaco (now owned by Chevron) began operating some of the country’s oil fields in the Amazon region. When Texaco left in 1992, it is widely believed it negligently discarded toxic waste that some 30,000 Ecuadorians involved in a class action lawsuit against the company claim is responsible for a high rate of cancer and birth defects in the area, as well as irreversible environmental damage.

Senators Patrick Leahy (D-VT) and Barack Obama (D-Ill) believe trade negotiations with the country could undermine this landmark case. According to a letter they sent in February to U.S. Trade Representative Rob Portman, "Chevron is reportedly lobbying Members of Congress and your office to use the leverage of the Andean Free Trade Agreement to pressure Ecuador to dismiss the case."

U.S. oil company Occidental has also drawn the ire of Ecuadorians and helped spark current protests. The company has been embroiled in legal problems with the government over alleged contract violations and disputed taxes. Occidental has offered $600 million in extra revenues and an additional $100 million for social projects to settle and keep its contract, which is at risk of being revoked. Yet despite this unusual "generosity" the company denies any wrongdoing.

Even more damaging was a recent article by journalist Kelly Hearn that revealed Occidental previously had secret contracts with the Ecuadorian military with terms that included requirements by soldiers to "carry out armed patrol" and "execute and supervise counterintelligence operations."

Free Trade or Democracy

Government officials and business elites have bellyached over the loss of commerce and revenue the protests and road blockades have caused. Yet they fail to recognize the disastrous long-term social, political and economic implications that a free trade agreement with the U.S. would have.

Protest leaders from CONAIE and other segments of civil society have made it very clear they will not allow Palacio to sign this agreement. Right now there is no reason not to believe them. As much as it is about holding the president accountable to the people he is supposed to serve, it’s about protecting the future of the country and securing the likelihood of being able to create and adopt democratic, humane and equitable economic policies.

It’s very possible this government could fall. The worst-case scenario is this would result in such instability that it could lead to calls for foreign "peacekeepers." It was reported that Ecuadorian Defense Minister Oswaldo Jarrin suggested last month that the country might need a multinational force to come in to help subdue protests at an oil pumping station. And that was just to help handle 600 people.

Ideally Palacio will wait to continue negotiations until a referendum is organized or until the country’s next election. But if not, he will most likely be removed and Ecuadorians will have to endure some political turbulence. It wouldn’t be the first time.

In the meantime, social movements in Ecuador need to determine what kind of electoral strategy they want to take. CONAIE and the indigenous political party Pachakutik were left reeling after their candidate Gutierrez turned on his populist promises and instead adopted the neoliberal policies championed by Washington and the IMF.  The conditions are ripe for a leftist leader to emerge as president in the next election in October, just as in other countries in the region.

Cyril Mychalejko is the assistant editor of, an online magazine uncovering activism and politics in Latin America. Photo from