Ecuador has signed an EU tariff-free trade agreement, joining Andean neighbours Peru and Colombia five years after it initially rejected the tie-up.
European Union trade with Ecuador reached €4.8b in 2013 – €2.3b in exports, €2.5b in imports. The European Commission said the agreement would continue this already “positive trend”.
It said the agreement would allow Ecuador improved access to the 28-state market for its main exports – fish, bananas, coffee, cocoa, fruits and nuts as well as cut flowers. Around 30% of Ecuador’s exports were represented by bananas, while key EU exports to the region included alcoholic beverages and cars.
Currently 60% of the total exports from Ecuador benefit from the EU Generalised Scheme of Preferences (GSP), which sees developing country exporters paying less or no duties on their exports to Europe. This latest trade agreement will replace the GSP terms at the end of 2014.
After the US, the EU is the second largest trading partner of the Andean region – totalling 14.3% of the Andean Community’s overall trade in 2010.
EU trade commissioner Karel de Gucht said the new terms would, "boost our bilateral trade and investment, and act as an important driver for development in Ecuador".
“The agreement will provide for a solid and predictable framework for Ecuadorian and European traders and investors and will also contribute to regional integration in one of the fastest-growing markets for European firms in Latin America. We now have to take the necessary steps to make sure the agreement is applied as quickly as possible.”
The agreement must be now be approved by the European Parliament and Ecuador's national assembly.
The EU started negotiations with the Andean Community for an Association Agreement back in 2007 – which saw Colombia and Peru signing up in 2010, while Bolivia discontinued its participation in the talks in 2008 and Ecuador in 2009.
In 2013 trade flows between the EU and Colombia amounted to €13.6b (€5.8b in exports and €7.7b in imports) ranking Colombia the fifth most significant trading partner in Latin America. Meanwhile Peru ranked sixth, with a total trade flow of €8.8b (€3.5b exports, €5.3b imports).
The commission said it kept its contracts with Ecuador and Bolivia after it reached these stumbling blocks in 2008 and 2009, and the option to restart talks was left open to the pair.
It said fresh talks this year had resolved, "all of the remaining issues to reach an ambitious and balanced deal, while taking due account of each side's sensitivities".
“After evaluating the overall balance and level of ambition of the final agreement the EU reached with Colombia and Peru, Ecuador concluded that the possibility to re-engage with the EU in this context had great potential for improving EU-Ecuador trade and investment relations as well as for its internal development objectives,” the commission said.