President Rafael Correa said Thursday that Ecuador is justified in imposing tariffs on products from Colombia and Peru to maintain its financial stability.
“I have been in discussions with the presidents of Colombia and Peru and we are working to
reach a consensus and introduce more flexible terms but the tariffs will stand,” Correa said. “Ecuador has the right to protect its economy just as Colombia and Peru are doing with the depreciation of their currencies,” he said at a press conference.
Ecuador announced a 21% tariff on imports from Colombia and a 7% tariff on imports from Peru on January 5, due to currency devaluations in those countries as well as a strengthening U.S. dollar. Correa has said that Ecuador is in a “financial straight jacket” since it cannot control the value of its currency, which puts it at a disadvantage to its neighbors. Ecuador adopted the dollar in 2000 following the collapse of its national currency, the sucre.
Following complaints from Colombia and Peru, Ecuador lowered the tariff on Colombian goods to 17.4% but said it will maintain the 7% import charge against Peru, except for raw materials, which will not receive additional tax. Colombia had requested a readjustment to 7%.
“It is my job to protect our national interests and to take measures to prevent a collapse of the national economy,” said Correa. He added that the strong dollar is “doing exactly the opposite what it should do in a time of economic uncertainty.”
Peru and Colombia are Ecuador’s main trading partners in the Andean Community (CAN), which includes Bolivia.