Colombia and Peru have given their blessing to Ecuador’s pending trade agreement with the European Union (EU).
The support of the two countries was required since both have existing free trade agreements with the EU.
Once the agreement goes into effect, probably in late 2016, Ecuadorian consumers will see significant price reductions on hundreds of products, including cars, cosmetics, liquor, and clothing. At the same time, European markets will open its doors, duty free, to Ecuadorian manufactured products.
On Saturday, President Rafael Correa thanked Juan Manuel Santos and Ollanta Humala, presidents of Colombia and Peru, for supporting Ecuador’s trade application. “We appreciate their unconditional support. They are true friends of Ecuador.”
Correa emphasized that Ecuador’s EU agreement has key differences with those signed by Colombia and Peru. “We added provisions to protect small farmers and manufacturers,” he said. “Our agreement is not a free trade agreement but a selective trade agreement that contains some restrictions.” He added that the restrictions were necessary to protect Ecuadorian businesses from monetary pressures due to the country’s use of the U.S. dollar.
“The agreement will encourage Ecuadorian industries to expand and will help lessen our reliance on natural resources,” Correa said.
Correa, who visited both Colombia and Peru two weeks ago also negotiated agreements to control drug trafficking and to inter-link electric power grids. Ecuador hopes to sell excess electricity to both countries once six new hydro-electric plants are operating at the end of 2016 or in early 2017.