The United States maintained good relations with Ecuador's democratically elected governments in the 1980s. These close ties were based on trade, investment and finance, cooperation in Ecuador's economic development, and participation in inter-American organizations and treaties, including the Western Hemisphere's regional mutual security treaty, the Inter-American Treaty of Reciprocal Assistance (Rio Treaty) of 1947. The United States provided US$48 million in assistance to Ecuador in 1988 and was its main commercial partner. The United States provided economic assistance through its Agency for International Development program in Ecuador and multilateral organizations, such as the InterAmerican Development Bank and World Bank. In addition, the United States Peace Corps operated a sizable program in Ecuador.

Three irritants in particular affected bilateral relations in the 1970s and 1980s. One was the United States Foreign Trade Act of 1974, which denied (until the 1980s) favorable tariff treatment to all OPEC members, even though neither Ecuador nor Venezuela participated in the 1973 oil boycott of the United States. Ecuador also reacted indignantly in early 1977 when the United States prohibited Israel from selling a dozen Kfir fighter-bombers to Ecuador because the aircraft contained licensed General Electric engines. In 1981, however, the United States lifted the prohibition. An additional aggravation was a dispute over the extent of the territorial sea claimed by Ecuador since 1953 and its rights over highly migratory fish traveling through these waters. In the early 1970s, Ecuador seized about 100 tuna boats flying the United States flag and collected fines and fees totaling more than US$6 million. No additional seizures occurred until November 1980, when ten tuna boats were detained while fishing and fined. That action provoked a United States embargo on the importing of tuna from Ecuador. Although still unresolved, the territorial sea and fishing issues did not adversely affect bilateral relations for most of the 1980s.

Febres Cordero's foreign policy was characterized by a marked preference for bilateralism and closer ties to the United States. His foreign and economic policies mirrored those advocated by the administration of President Ronald Reagan, particularly on matters related to Central America and Latin America's international debt. During Febres Cordero's week-long state visit to Washington in January 1986, United States and Ecuadorian officials repeatedly underlined their two presidents' total agreement on economic and political matters.

Ecuador was almost alone in its enthusiastic reception of the 1986 Baker Plan (named after then United States secretary of the treasury James A. Baker III) for alleviating Third World debt, which called for fresh infusions of capital into the debt-ridden countries, contingent on structural reforms. Febres Cordero advocated bilateral negotiation rather than the use of a regional "cartel" to renegotiate the debt and strongly favored an "understanding" between debtor and creditor nations. (Nevertheless, Ecuador stopped paying interest on its debt in 1987.) The Febres Cordero government also ignored petroleum production quotas set by OPEC and threatened to withdraw from the cartel as well.

Febres Cordero approved "Operation Blazing Trails," a United States-sponsored civic-action project to repair bridges and roads in the earthquake-devastated province of Napo. The project involved rotating contingents of 600 United States troops through the country at fifteen-day intervals beginning in May 1986, until an Ecuadorian congressional resolution in July called for their immediate withdrawal. Marxist and centrist leaders alike had denounced Febres Cordero's approval of the project as a violation of national sovereignty.

United States secretary of state George P. Shultz attended Borja's swearing-in ceremony on August 10, 1988. During his first year in office, Borja remained on good terms with the United States. In his meeting with United States vice president Daniel Quayle in Caracas in February 1989, Borja stressed the need for good relations within the framework of mutual respect and nonintervention in Ecuador's domestic affairs. The Borja government expressed satisfaction with the proposal presented in March 1989 by United States treasury secretary Nicolas Brady regarding the Latin American debt problem. The Brady Plan called for the creditor banks to write off a portion of a poor country's indebtedness in return for guaranteed repayment of the remaining debt. Nevertheless, Borja favored a Bolivian-style policy of holding back payments because of poverty.

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Source: U.S. Library of Congress