QUITO (Reuters) - Ecuador's leftist government thumbed its nose at Washington on Thursday by renouncing U.S. trade benefits and offering to pay for human rights training in America in response to pressure over asylum for former intelligence contractor Edward Snowden.
The angry response threatens a showdown between the two nations over Snowden, and may burnish President Rafael Correa's credentials to be the continent's principal challenger of U.S. power after the death of Venezuelan socialist leader Hugo Chavez.
"Ecuador will not accept pressures or threats from anyone, and it does not traffic in its values or allow them to be subjugated to mercantile interests," government spokesman Fernando Alvarado said at a news conference.
In a cheeky jab at the U.S. spying program that Snowden unveiled through leaks to the media, the South American nation offered $23 million per year to finance human rights training.
The funding would be destined to help "avoid violations of privacy, torture and other actions that are denigrating to humanity," Alvarado said. He said the amount was the equivalent of what Ecuador gained each year from the trade benefits.
"Ecuador gives up, unilaterally and irrevocably, the said customs benefits," he said.
In Washington, U.S. Trade Representative Michael Froman told reporters that Ecuador was still currently eligible for U.S. trade benefits under two separate programs, despite Alvarado's comment. But the United States would be reviewing the statutes for both programs to see if the remarks had any implications for Ecuador's standing, he said.
In the meantime, the United States has accepted a petition that could lead to Ecuador being suspended from one of the two programs, the Generalized System of Preferences, Froman said.
Oil giant Chevron requested the review last year, saying Ecuador had failed to act in good faith in recognizing and implementing an international arbitration award made in Chevron's favour under the U.S.-Ecuador Bilateral Investment Treaty.
Snowden, 30, is believed to be at Moscow's international airport and seeking safe passage to Ecuador.
The Andean nation's government denies reports that it provided a travel document to the former National Security Agency contractor, whose U.S. passport has been revoked.
The government has not been able to process his asylum request because he is not on Ecuadorean territory, another government official said.
Never shy of taking on the West, the pugnacious Correa last year granted asylum to WikiLeaks founder Julian Assange to help him avoid extradition from Great Britain to Sweden, where he is wanted for questioning over sexual assault accusations.
Correa, a 50-year-old U.S.-trained economist, won a landslide re-election in February on generous state spending to improve infrastructure and health services, and his Alianza Pais party holds a majority in the legislature.
Ecuador also receives U.S. trade benefits under the Andean Trade Promotion and Drug Eradication Act, which waives duties on Ecuadorean goods in exchange for efforts to fight the drug trade. Ecuadorean officials accused Washington of using the program as a political weapon in the Snowden case.
An OPEC nation of 15 million people, Ecuador exported $5.4 billion worth of oil, $166 million of cut flowers, $122 million of fruits and vegetables and $80 million of tuna to the United States under the Andean trade program in 2012.
Termination of the benefits could hurt the cut flower industry, which has blossomed under the program and employs more than 100,000 workers, many of them women.
Both the Andean program and the broader U.S. Generalized System of Preferences, or GSP, program will expire at the end of July. Congress is likely to renew the GSP program but will probably let the Andean trade program die since Ecuador is the only remaining recipient.
Critics of Correa say Ecuador's embrace of Assange - and now possibly Snowden - is hypocritical given what they say is his authoritarian style and suppression of media at home.
Supporters of Correa say he has simply taken on media and business elites who were trying to erode what the president calls his "Citizens' Revolution."
(Writing by Brian Ellsworth and Andrew Cawthorne; Additional reporting by Doug Palmer in Washington; Editing by Doina Chiacu and Cynthia Osterman)
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