Ecuador may impose Colombia trade sanctions

Ecuador said on Tuesday it may impose trade restrictions on Colombia as the neighbouring countries backed away from a plan to restore low-level diplomatic relations this week.

The rift started in March when Colombia attacked a Marxist rebel camp on Ecuador's side of the border. Ecuador broke off diplomatic ties over the raid, which killed a top Colombian guerrilla leader.

"We do not discard the possibility of applying some trade restrictions on Colombia in the future," Ecuadorean Foreign Minister Isabel Salvador told reporters.

Left-wing Ecuadorean President Rafael Correa, who has clashed with Colombia's conservative leader, Alvaro Uribe, said over the weekend that his country was aggrieved by Colombia's actions throughout the dispute and that Ecuador would be the one to set a timetable for re-establishing relations.

The countries were set to renew ties this week at the level of charges d'affaires in a deal brokered by former U.S. President Jimmy Carter.

"But the recent statements by President Correa have closed the possibility of advancing this process," Colombian Foreign Minister Fernando Araujo told local radio early on Tuesday.

The Organization of American States called on both sides to stop making public statements of a distancing nature and get on with restoring ties.

But the tough talk continued.

"Once again, Colombia's government has shown a lack of coherence in its position," Salvador said, responding to Araujo.

Both South American countries will renew ties eventually in order to protect trade and cooperate on security matters, predicted Michael Shifter, a senior fellow at Inter-American Dialogue, Washington-based think tank.

"But right now, the distrust is so deep and tensions are so high that it seems any comment can set off an exaggerated reaction," Shifter said.

Colombia says computer files found in the destroyed rebel camp show that Ecuador and Venezuela had secret ties to the outlawed Revolutionary Armed Forces of Colombia, known as FARC, a charge both countries deny.

Venezuela and Ecuador both reinforced troops on their Colombian borders in the weeks after the March bombing raid, briefly raising the spectre of armed conflict between government forces.

Colombia's four-decade-old guerrilla war often spills into neighbouring countries, causing diplomatic tensions.