Ecuador has pulled out of a trade pact with the United States, claiming it had become an instrument of "blackmail" for Washington as Quito considers whistleblower Edward Snowden's asylum request.
Snowden, whose custody the US is seeking on espionage charges after he leaked classified information on a widespread secret surveillance programme, is believed to be currently hiding at the Moscow airport, where he arrived from Hong Kong on Sunday.
But despite voicing support for the former National Security Agency contractor, Ecuador is yet to consider his asylum application.
"Would he be allowed to arrive on Ecuadorean territory? This is something that, in principle, we haven't considered," President Rafael Correa told a news conference on Thursday.
"We would probably examine it, but for now he is in Russia," he said, adding that Ecuador's ambassador to Russia met Snowden just once on Monday in the transit area of Moscow's Sheremetyevo airport and that no further contact had been made.
WikiLeaks founder Julian Assange, whose anti-secrecy website has assisted Snowden, said on Monday that Quito had given Snowden a "refugee document of passage" that would allow him to travel here.
"You request asylum when you are on a country's territory. Snowden is not on Ecuadorean territory, so technically we cannot even process the asylum request," Correa said.
The United States has revoked Snowden's passport, after he revealed a widespread US surveillance programme in early June. The 30-year-old computer specialist has been staying in the transit area of the Moscow airport - which means he has not technically entered Russia, according to that country.
'Rights training' aid offer
In Washington, US State Department deputy spokesman Patrick Ventrell said that giving Snowden asylum would create "grave difficulties for our bilateral relationship".
"If they take that step, that would have very negative repercussions," Ventrell said.
But a US official also denied that a bilateral trade pact was being used as "blackmail" in the case, insisting that Washington wanted to maintain a good economic relationship with Quito.
Ecuador's Communications Minister Fernando Alvarado announced earlier that the country "unilaterally and irrevocably renounces these preferential customs tariff rights".
"Ecuador does not accept pressure or threats from anyone, and does not trade on principles or make them contingent on commercial interests, even if those interests are important," he said.
In a jab at the US government, Alvarado said his government was prepared to offer $23 million - the equivalent of what Ecuador gains from the trade pact - in aid to the United States government to fund human rights training.
The funding would be destined to help "avoid violations of privacy, torture and other actions that are denigrating to humanity".
Correa's government said that while it had received the preferential rights in exchange for its cooperation in the war on drugs, they had become a "new instrument of blackmail".
But the US State Department said the trade programme was granted by Congress and Quito could not withdraw unilaterally.
The pact, which covers important Ecuadorean exports such as fresh-cut roses, fruits, vegetables and tuna, is set to expire on July 31 unless the US Congress renews it.
The arrangement, which dates back to the early 1990s, originally benefited four Andean nations, and Ecuador was the last country still participating in it. Analysts have warned that Washington may refuse to renew it if Quito grants asylum to Snowden.
The United States is Ecuador's main trade partner, buying 40 percent of Quito's exports, or the equivalent of $9 billion per year.
An online publication of the presidency said Washington had put "explicit and implicit" pressure on Quito over Snowden's asylum petition as well as its decision to shelter Assange at its London embassy and its ties with "nations considered 'enemies' of the United States".
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