Ecuador: Political and Economic Situation and U.S. Relations

In January 2003, Lucio Gutierrez of the Patriotic Society Party PSP, a former army Colonel who was part of the junta that toppled the government of Jamil Mahuad in January 2000, became the countrys sixth president in seven years. Early in his presidency, President Gutierrez abandoned his populist rhetoric and adopted some market-friendly economic reforms in order to secure support from the International Monetary Fund IMF. His power was severely limited, however, by opposition parties that dominated the Congress, indigenous protests, and allegations of corruption. Despite his partys poor performance in the October 17, 2004 municipal elections, President Gutierrez has found new congressional allies who have helped him stave off impeachment proceedings and place many political allies on the countrys high courts. Ecuador continues to cooperate with the U.S. counter-narcotics program and has mobilized its military and police forces to help control spillover effects from the conflict in Colombia. Ecuador and the United States possess a significant trade relationship that has been enhanced since 1992 by the Andean Trade Preference Act. The two countries are currently negotiating, along with Colombia and Peru, for an Andean Free Trade Agreement. This report will be updated periodically.