Background

The U.S. and Ecuador signed Dec. 8 a protocol on trade rules and transparency that updates their 1990 Trade and Investment Council Agreement by adding “state of the art” provisions on trade facilitation and customs administration, good regulatory practices, anti-corruption, and small and medium-sized enterprises.

In her “Two Minutes in Trade” podcast (click here to listen to episodes), Nicole Bivens Collinson, president of international trade and government relations for ST&R, said the trade facilitation annex includes provisions on advance rulings; errors and penalties; single window for import, export, and transit; authorized economic operators; and automation that go beyond the baseline of the World Trade Organization’s Trade Facilitation Agreement. Other topics addressed include online publication of customs information, enforcement and other means of customs cooperation, and consistent customs treatment among ports.

The protocol also (1) reflects the provisions on good regulatory practices in the U.S.-Mexico-Canada Agreement and the U.S.-Brazil protocol on trade rules and transparency, (2) expands both countries’ anti-corruption frameworks to include provisions addressing money laundering, the recovery of proceeds of corruption, and additional protections for whistleblowers, and (3) includes a streamlined version of the USMCA chapter on SMEs that aims to increase trade and investment opportunities for such entities and make it easier for them to do business between the two countries.

Collinson noted that the protocol does not include any measures with respect to Ecuador purchasing more U.S. goods or taking other measures to help lower its approximately $1.4 billion trade surplus with the U.S. It also does not affect any tariffs between the two countries or address Ecuador’s import licensing regime, which the U.S. plans to make a continuing focus in future talks.

Officials said the protocol is a first step toward closer economic ties and said they were unable to reach a more comprehensive agreement because of time constraints and the COVID-19 pandemic. Collinson noted that Ecuador has occasionally been mentioned as a potential U.S. free trade partner over the years but has never progressed beyond that. Such an agreement does not appear likely in the near term either, as President-elect Biden has said he has no immediate plans to negotiate additional trade agreements.

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