Ecuador and Canada close a historic trade agreement!

An agreement that will give access to a market of 39.8 million consumers. This agreement is expected to generate employment in sectors such as roses, flowers, tuna, textiles, auto parts, among others. This agreement represents an important milestone for both countries and marks a key step in the strategy of Canada's trade diversification, opening up new market opportunities for Canadian companies and strengthening their global competitiveness. By facilitating trade in goods and services, this agreement will benefit importers, exporters, businesses, investors and consumers in both countries, creating a more transparent and predictable environment for the trade and investment.

 

The trade agreement between Ecuador and Canada will boost investments, tourism, cultural cooperation and offer opportunities for young Ecuadorians in the development of professional services. It focuses on strengthening MSMEs, promoting e-commerce and establishing commitments in labor and environmental policies.

 

During the negotiations, the Ecuadorian team protected the interests of sensitive sectors such as agriculture and the peasant family economy, especially in products such as rice, dairy products, corn, sugar and meat.

 

In addition, the rights of communities, peoples and nationalities are safeguarded by establishing cooperation mechanisms so that they can export to the Canadian market.

 

The agreement will also strengthen Ecuador's economic competitiveness and ensure the management of strategic sectors and public services.

 

Why is this agreement so important?

 

 Access to a growing market: Ecuador, South America's sixth-largest economy with a population of 18 million and GDP of $118.84 billion (2023), represents an attractive market for Canadian companies.

 

 Investment attraction: Canadian foreign direct investment in Ecuador tripled between 2018 and 2023, reaching $4.4 billion, making Canada one of the largest foreign investors in Ecuador. This agreement will further strengthen this relationship.

 

 Business diversification: This agreement underscores Canada's commitment to diversifying its trading relationships and reducing its dependence on a single partner.

Since launching Canada’s Trade Diversification Strategy in 2017, the country has accelerated its efforts, resulting in 15 free trade agreements spanning 51 countries and representing nearly two-thirds of global GDP.

 

 Benefits for everyone: The Canada-Ecuador free trade agreement will reflect the shared interests of both nations. It will ensure that the benefits of trade reach businesses of all sizes, as well as businesses owned by indigenous peoples and women.

 

 

 Labor and environmental protections: It includes a robust chapter on labor protections, environmental safeguards and ethical business standards, demonstrating both countries' commitment to fair and sustainable trade.

 

This agreement represents a great opportunity to strengthen trade ties between Canada and Ecuador and generate mutual benefits for both economies. This agreement is expected to have a positive impact on Ecuadorian exports, especially on products such as flowers, bananas, cocoa and shrimp. It will represent a tariff reduction for more than 2,000 Ecuadorian products, greater participation in global value chains and access to new technologies.

 

In 2023, Canada will be positioned as the eighth destination for Ecuador's non-oil exports.

 

 

Raúl Aguilera, international trade & investment advisor at Gedeth Network