Ecuador is placed 25th out of 32 states in the Americas, with a lower score than the local and global averages. Ecuador’s economy grew slowly from 2017 to 2019, fell in 2020, and then revived in 2021 after a five-year hiatus. Economic liberty has been increasing in recent years. Ecuador has gained 5.0 points in overall financial freedom since 2017, thanks to large advances in fiscal health and judicial efficiency, and has consolidated its status in the “Mostly Unfree” group. Although the tax burden is relatively low, property rights, government honesty, and investor freedom have flaws.
Ecuador is a member of seven trade accords. There are 284 nontariff procedures in place, with a trade-weighted average duty rate of 9.5 percent. The government’s willingness to accept international investment is lower than the worldwide standard. Although the banking industry has flourished, government involvement has hampered the overall expansion of financial products.
The following are Ecaduar’s trade agreements:
The comprehensive economic partnership agreement
In line with the stipulations of this Treaty, the EFTA Members and Ecuador have formed a free trade zone based on economic links between competitive industries and regard for political values and human rights, intending to promote prosperity and long-term growth.
The priorities of this pact are to democratize product trade, broaden skills in commerce, and substantially improve investment prospects. This agreement also intends to avoid, abolish, or decrease superfluous trade obstacles, as well as hygienic and environmental safety precautions. It encourages rivalry in common industries.
Inconsistent with the norms and goals of the WTO Treaty on Trade-Related Issues of Intellectual Property Rights, the pact also assures appropriate and efficient safety of patents and copyrights.
Its goal is to accomplish further globalization of the Parties’ legislative procurement marketplaces on a cooperative basis, as well as to establish global trade in a manner that contributes to the goal of sustainable progress and ensures that this goal is incorporated and mirrored in the Parties’ trade ties
It also intends to promote collaboration to aid in the execution of this Accord and the enhancement of its rewards, as well as to help the smooth growth and expansion of global commerce.
EU-Colombia-Peru-Ecuador Trade Agreement
Full or selective tax liberalizations, substantial duty-free quotas, the elimination of legislative or practical non-tariff obstacles, and the adoption of trade facilitation policies, such as inspection processes, are all included in the EU-Colombia-Ecuador-Peru Trade Agreement. Financial inflows, investments, and government procurement sectors are all liberalized due to the Trade Agreement. Last but not least, the Accord requires the signatories to safeguard civil dignity, ensure workplace rights, and provide true ecological sustainability.
The trade treaty between the EU and Colombia, Peru, and Ecuador, on the one hand, has opened up marketplaces on both sides and made the business climate more secure and reliable. Through new restrictions on non-tariff obstacles, competitiveness, integrity, and copyrights, this agreement improves trading conditions.
Latin American Integration Association
The Latin American Integration Association (ALADI) is a non-profit organization with a global and regional scope. The Montevideo Treaty of 1980 was established on August 12, 1980. It now has 13 members, including Ecuador, and any Latin American country can request membership.
The ALADI integration program intends to promote the region’s harmonic and balanced economic growth, with the long-term goal of gradually and gradually establishing a Latin-American single market.
Its primary responsibilities include promoting and regulating reciprocal trade, economic enhancement, and establishing economic cooperation acts that contribute to the expansion of markets.
Diversity in social-financial issues; gradual convergence of partial decisions for forming a Latin-American Trading Bloc; versatility; systematic discrimination based on participating countries’ rates of growth; and numerous kinds of trade deals are among the general principles mentioned in this treaty.
