The Bush administration says it has halted negotiations on a free trade deal with Ecuador following that country's decision to cancel an operating contract with Occidental Petroleum Corporation.
The U.S. Trade Representative's office in Washington said in a statement Tuesday that the U.S. is disappointed at Ecuador's decision, which it said appears to constitute a seizure of the assets of a U.S. company.
Ecuador announced its decision Monday following a dispute with Occidental over a stock sale. Ecuadorean officials also say they are starting a gradual takeover of oil fields operated by the company.
Authorities in Quito say Occidental transferred oil stocks to a Canadian oil company without notifying the Ecuadorean government. Occidental says it has complied fully with all its obligations under its contract with Ecuador's government.
Earlier this year, Ecuadorean Indians staged demonstrations to protest the free trade talks with the U.S., saying an agreement would damage their livelihoods and way of life.
Colombia and Peru have already signed trade deals with the United States.
Some information for this report was provided by AP and Reuters.