Bridges Weekly Trade News Digest • Volume 14 • Number 6 • 17th February 2010

Ecuador to Rejoin Trade Negotiations with EU

Discuss this articleShare your views with other visitors, and read what they have to say

With the resolution of the long-standing banana trade dispute between the EU and a group of Latin American countries last December, trade officials cleared the way for Ecuador’s president, Rafael Correa, to announce at the beginning of February that his country will re-enter regional trade negotiations with the EU.

The EU and the Andean Community (Comunidad Andida de Naciones or CAN) have been working on a bi-regional trade agreement since 2006. Bolivia pulled out of the negotiations in 2007, when its leftist leader Evo Morales withdrew in protest over the EU’s stance on intellectual property rules and the privatisation of services. Peru and Colombia have remained in the negotiations all along.

Ecuador has been absent from the negotiations toward an ‘Association Agreement’ since July 2009, when it pulled out of the talks, denouncing them as ‘biased.’ The proposed deal is supposed to have three components - a Free Trade Agreement (FTA), an economic cooperation agreement, and a forum for political dialogue - but Ecuador criticised the EU for being principally concerned with the FTA and disregarding the other issues.

Last December, the WTO’s Dispute Settlement Body supported the claims of many banana-exporting Latin American countries - including Ecuador - that the EU illegally discriminates in favour of bananas from African, Caribbean, and Pacific (ACP) countries. A deal was struck that will gradually cut the extra tariffs on non-ACP countries from €176 per tonne to €114 per tonne by 2017.

President Correa celebrated the deal, saying, “[The EU] obeyed [the WTO] and the banana problem has been solved, the agreement is already signed, they will lower tariffs and given that, we are going to resume [talks] with the EU.”

In addition to the banana deal, the EU agreed to work with Ecuador on an agenda of various topics to be covered by the agreement after the negotiations are completed. This bargaining agreement will provide for a partnership that includes political affairs beyond just the “simplicity of free trade,” said President Correa.

Ecuador intends to resume negotiations with its own agenda rather than joining in on the agreements the EU has so far reached with Colombia and Peru. It has specific subjects it wishes to discuss, such as immigration issues and limited the free trade agreement to certain products.

Roberto Aspiazu, executive director of the Ecuadorian Business Committee, said it is very important to restart negotiations as quickly as possible so as to speed up the entry of Ecuadorian goods into the European market. The talks should resume in mid-March.

Reactions from the other Andean Community countries were mixed. Peruvian Foreign Trade Minister Martin Perez said that Ecuador’s decision to rejoin will slow the process of Peru’s negotiations with the EU.

“We’ll have to become a bloc and that will cause certain delays in the implementation and activation of the accord,” Perez said in Lima last week.

Colombia had announced previously that it hoped negotiations would be finalised by mid-February, a now-impossible deadline.

Bolivia’s decision to remain outside the negotiations will doubtless have ramifications for the process of Andean integration. When the EU continued bilateral negotiations with Colombia and Peru after Ecuador and Bolivia first pulled out, Bolivian President Eva Morales said that the move “seriously weakened” the Andean integration process.

Andean integration has recently seen progress on another front, however. Ecuador’s Board of Foreign Trade and Investment announced that it was lifting a seven-month safeguard on 1,346 Colombian goods on 5 February, the day after President Correa’s announcement about resuming negotiations.

Diplomatic relations between Colombia and Ecuador have been suspended since March 2008 after the Colombian army attacked a Revolutionary Armed Forces of Colombia (FARC) guerrilla camp located on Ecuadorian territory.

ICTSD reporting; Puentes Quincenal, Vol. 7, No. 3; “Ecuador May Rejoin Peru, Colombia in EU Trade Talks,” BUSINESS WEEKLY, 9 February 2010.

One response to “Ecuador to Rejoin Trade Negotiations with EU”

Kirk Nelson 10th May 2011 at 00:15
Fifteen months later one observes how Ecuador has lost trade agreements with the USA (Atpdea) and with the UE.
Of course we are not aware why Ecuador seeks special consideration on its trade agreements, such as Immigration issues and long-term trade for free tax agreements.
But, due lo large number of ecuadorians residing in the USA and in Europe they are contibuting and improving with the economy of this country, because remitances is the second source on income to this small Andean nation, since it is expected that exports will be reduced due to its up cost.
On the other hand, political issues is the core of the current president, simply because he wants to prove that socialism is the path for the Andean nations.
It is hard to imagine that over 550,000 children work in this nation, being among the Andean nations the largest nation laboring children do not attent school.
Although some working children attend schools at night, such education is poor of quality, while private and public sectors do very little to reduce such high number.
Besides, under hard labor, they do not have fringe nor health benefits, to the contrary, they work extra hours per week and they are not compensated as overtime, instead as regular time.
Lossing the Atpdea will signify the loss of 180,000 jobs, which bring to higher unemloyment and crime.
Goverment oficials have introduced last week, a new currency UDIS (Under the Solidarity Exchange)forecasting eventually the loss of the USD in the country, because imports will excide exports at one point.

Kirk Nelson,
New York, USA