Background

The Office of the U.S. Trade Representative has announced that the U.S.-Ecuador bilateral investment treaty was terminated as of May 18, although it will continue to apply for another 10 years to investments made or acquired prior to that date and to which the treaty otherwise applies.

The BIT provided protections to cross-border investment between the two countries and the option to resolve investment disputes through international arbitration. It entered into force in May 1997 but Ecuador delivered a notice of termination in May 2017. Ecuador terminated all 12 of its existing BITs at that time after a government report concluded that these agreements “have not only failed to deliver promised investment, they have cost Ecuadorians billions of dollars and posed a serious threat to Ecuador’s capacity to regulate corporate activities in order to protect its citizens.”

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