On Wednesday, Sen. Bob Menendez of New Jersey, chairman of the Senate Foreign Relations Committee, said that if Ecuador grants Snowden asylum, "I will lead the effort to prevent the renewal of Ecuador's duty-free access under GSP and will also make sure there is no chance for renewal of the Andean Trade Promotion and Drug Eradication Act."
The pact, initially aimed at helping Andean countries in their fight against drugs, reduces tariffs on hundreds of millions of dollars' worth of trade in products such as cut flowers, artichokes and broccoli. Nearly half Ecuador's foreign trade depends on the U.S.
Under the terms of the pact, Ecuador exported $5.4 billion worth of oil to the USA last year.
Communications minister Fernando Alvarez told a news conference in the Ecuadoran capital Quito that the pact, which already faced an uphill battle for renewal, had become "a new instrument of blackmail."
He said his country of 15 million people "does not accept threats from anybody, and does not trade in principles, or submit to mercantile interests, as important as they may be."
"In consequence, Ecuador unilaterally and irrevocably renounces said preferences," he said.
In a pointed jab at Washington over Snowden's revelations on data-gathering by NSA, Alavarez said Ecuador offered $23 million per year to the United States to finance human rights training.
He said the money would be aimed at helping "avoid violations of privacy, torture and other actions that are denigrating to humanity."