Toward a US-Ecuador Trade Agreement

The bilateral relationship between Ecuador and the United States has never been better. Built on pragmatism, it is focused on taking advantage of the opportunities to strengthen our political, economic, and migratory ties. One of the pillars—and a priority—in our relationship, is the promotion of trade and investment.

A history of collaboration, and challenges

The United States has been Ecuador’s top trading partner for many years, thanks to a series of tariff preferences granted unilaterally and renewed by successive US governments to several countries, including Ecuador. Since 1976, Ecuador has benefited from the Generalized System of Preferences, or GSP, which grants zero percent tariffs, facilitating exports to the US market, particularly of products not made in the United States.

In the 1990s, when the countries of the Andean Community—a trade bloc consisting of Bolivia, Colombia, Ecuador, and Peru—began to face critical drug trafficking challenges, the US enacted the Andean Tariff Preference Act (ATPA), which favored these four countries. This program was subsequently replaced by the Andean Tariff Preferences and Drug Eradication Act (ATPDEA), from which Ecuador also benefited greatly.

The ATPDEA program ended in 2013 and the United States negotiated free trade agreements with Colombia and Peru. Bilateral trade initiatives were signed with many Latin American and Caribbean countries, resulting from a lack of consensus to establish a free trade agreement covering all of the Americas. Ecuador began negotiating a free trade agreement with the United States at the same time as Colombia and Peru. However, negotiations were suspended by the US government over differences regarding a legal matter with Occidental Petroleum. 

Ecuador seeks to solidify its commercial relationship with the United States by creating a lasting agreement that addresses both countries’ concerns, such as transnational organized crime and dangerous migration.

With the expiration of the ATPDEA program, and no bilateral trade agreement, Ecuador depended on GSP tariff preferences, which only applied to a limited number of items, affecting the competitiveness of small- and medium-size Ecuadorian companies and producers of roses, tuna, broccoli, and artichokes.

This new US-Ecuador trade relationship took shape during a time of increasing global trade and a shifting US outlook on trade policy. This combined with the pending renewal of Trade Promotion Authority—a law that facilities US trade negotiations—has challenged Ecuador.

New opportunities

Under the slogan, “More Ecuador in the world and more of the world in Ecuador,” the government I lead has sought to start trade negotiations with the world’s largest economies and regional strategic partners, as elements of a pragmatic foreign policy.

For instance, Ecuador recently signed a free trade agreement with Costa Rica, resumed negotiations with South Korea, and concluded negotiations with China. Moreover, Ecuador aspires to join the Pacific Alliance, once the negotiations with Mexico are settled. At the same time, Ecuador has begun technical discussions to negotiate a trade agreement with Canada, and is in initial dialogues with Singapore, Panamá, and Dominican Republic.

Ecuador also seeks to deepen its commercial ties with the United States. We have faithfully followed the evolution of its trade negotiations, particularly the possible use of the trade agreement between the United States, Canada, and Mexico, or USMCA, as a model.

It is also worth examining the 2018 reactivation of the Trade and Investment Committee between Ecuador and the US. In this framework, we adopted trade standards, including transparency. It contains sections related to trade facilitation, good regulatory practices, anti-corruption, and prioritizing small- and medium-size enterprises, also covered by the USMCA. Ecuador has attempted to use this framework to start dialogues on new areas of mutual interest, such as labor and environmental standards. Ecuador has consistently demonstrated its willingness to negotiate an innovative, comprehensive, next-generation trade agreement with the United States.

It is vital to underscore that Ecuador is committed to working constructively with the United States based on our shared values. In this context, we are participating in the Alliance for the Economic Prosperity of the Americas (APEP), an initiative promoted by President Biden. Likewise, as a member of the Alliance for the Development of Democracy (ADD), Ecuador has signed on to a cooperation agreement to strengthen supply chains with the United States. Both initiatives demonstrate Ecuador’s commitment to a real reconnection in the Americas, despite the lack of a trade agreement with the US, which all other members of the APEP and ADD members enjoy.

Ecuador is a significant country for the US, both regionally and bilaterally. This vision was reinforced during the meeting I had with President Biden last December, visits with members of Congress, and the approval of the United States-Ecuador Partnership Act, which establishes a new regulatory framework to deepen cooperation in various areas, including trade.

The Ecuadorian government again highlighted the importance of negotiating a trade agreement last month, when members of the House Ways and Means Committee visited Quito. During the visit, we also requested improvements to existing trade preferences to strengthen Ecuador’s production and export sectors, and to boost the country’s economy.

Ecuador has raised its standards to conform to the policies of countries with different commercial approaches and traditions, so that a trade negotiation with the US—using the USMCA agreement as a guide—is feasible. We already comply with the conditions outlined in that agreement, including labor, environmental, and human rights regulations, which align with Ecuadorian law and values. In fact, Ecuador was the first Latin American country to establish sustainable development as a national priority.

Strategic partners with shared values and common interests

Ecuador seeks to solidify its commercial relationship with the United States by creating a lasting agreement that addresses both countries’ concerns, such as transnational organized crime and dangerous migration. Trade is an engine for creating quality employment and opportunities, and a tool to deal with complex problems. A bilateral trade agreement would provide continuity and reduce dependence on unilateral programs like the GSP.

Let there be no doubt: Ecuador is and will continue to be a viable strategic and economic partner for the United States, based on shared values and common interests.

Guillermo Lasso Mendoza is the president of Ecuador.

Cover photo: US Secretary of State Antony Blinken and Ecuador's President Guillermo Lasso shake hands as they speak to reporters, in Quito, Ecuador, Tuesday, Oct. 19, 2021. Santiago Arcos/Pool via AP.