Ecuador's flower growers hurt by Snowden situation

PIFO, Ecuador Gino Descalzi used to fret about things like aphids, mildew and the high cost of shipping millions of roses a year from Ecuador to florists in the United States. These days he's worried about a 30-year-old former spy stuck in the transit area of the Moscow airport, and he can't believe it.

The Obama administration sent a thinly veiled economic threat to this South American country on Thursday when it indefinitely delayed a decision to eliminate tariffs on imports of roses worth about $250 million a year. The move created leverage over the leftist government seen as likeliest to grant National Security Agency leaker Edward Snowden political asylum that would protect him from U.S. criminal charges.

About the same time, a small group of U.S. senators made explicit threats of trade retaliation if Ecuador harbors Snowden. And on Saturday, Vice President Joe Biden asked Ecuadorean President Rafael Correa to turn down any asylum request, although Correa described the conversation as cordial.

A week after Snowden began his stuttering, surreal flight across the globe, every passing day without him making progress toward Ecuadorean asylum makes the prospect look less likely. But the men who grow roses, asters and delphinia in the thin air of Ecuador's sun-soaked highlands are deeply concerned that, whatever happens to Snowden, they may turn out to be the most unlikely collateral damage from the geopolitical wrangle over his fate.

"This totally changes the financial panorama for our businesses and seriously affects the structure of our markets," said Descalzi, whose 280 employees produce some 22 million roses a year. "We're just shocked that an event so far from the political and economic life of Ecuador has caused so much commotion and worry."

The rose benefit for Ecuador had been widely expected to be approved. Any delay, they say, puts it into uncomfortably uncertain territory.

Even if Snowden never touches Ecuadorean soil and the U.S. cuts the 6.8 percent tariff on Ecuadorean roses, along with tariffs on frozen broccoli and canned artichokes, Ecuadorean flower growers are worried that the brouhaha has damaged Ecuador in the eyes of the United States, hurting its reputation for stability and reliability among the buyers who must decide between flowers from Ecuador and the already tariff-free blooms from its nearby market-dominant competitor, Colombia.

"This is not a mathematical equation," said Benito Jaramillo, the head of the Ecuadorean flower-growers' association. The graduate of Texas A&M and the University of Illinois at Urbana-Champaign employs hundreds of people growing "summer flowers" — a category of less-flashy blooms like hydrangeas and asters — on his farm about a half-hour from the capital, Quito.

"The point is that there are a lot of other factors that damage our industry's image and competitiveness in the mid-term," Jaramillo said.

Flowers are serious business in Ecuador.

The industry says it employs about 50,000 people on about 550 farms across the country and is indirectly responsible for 110,000 jobs, putting it after only oil, seafood and bananas in the ranks of the country's biggest exporters. It boasts that the long days, rich sunlight and cool nights of the Andean highlands mean the heads of flowers, particularly roses, grow fuller and richer than those from Colombia, which they scoff at as more suitable for grocery stores than florists.

Industry representatives spent around a year campaigning hard in Washington for the inclusion of cut roses under the Generalized System of Preferences, or GSP, a mechanism meant to encourage development in lower-income countries. A broader trade pact that covers a wide range of Ecuadorean products, the Andean Trade Preference Act, had been widely expected to expire next month. That now seems certain, not least because Ecuador declared Thursday that it was preemptively rejecting it.

Now, the flower industry has turned its focus to its own government, which it desperately hopes won't offer asylum to Snowden.

"We can't put the interests of 14 million Ecuadoreans at risk because of a 29-year-old hacker whom we don't even know," Descalzi said. "This gentleman doesn't mean anything to us."

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The business impacts of the Snowden affair have infuriated Ecuador's main business groups, who accuse the government of putting ideology before commerce.

The decision to renounce the Andean Trade deal was "permeated by political and ideological motives," said Roberto Aspiazu, chairman of a coalition of Ecuador's largest industries. The country's business sector is calling on the government to manage the relationship with the United States "with the utmost care," he said.

The government said it planned to compensate business damaged by the loss of U.S. tariff benefits and has painted its decision in terms of the nation's sovereignty versus U.S. threats.

"But in any case, now they're wanting to destroy Ecuador for receiving an asylum application from Mr. Snowden and they are pulling out the rubbish that we spy as well," President Correa said. "If you behave badly we will take (the trade deal) away from you. Well, here you have the sovereign response from Ecuador, my comrades."

But business groups warned that any government compensation could be interpreted as a subsidy subject to international litigation.

When asked how he feels about the whole situation, Jaramillo, the head of the flower association, thought before responding with a single word: "frustrated."

"One isolated issue shouldn't create so much damage," he said.