Ecuador Joins EU Trade Agreement With Colombia And Peru

by Ulrika Lomas, Tax-News.com, Brussels

14 November 2016

Ecuador has joined the European Union's free trade agreement with Colombia and Peru, with the deal expected to be provisionally applied from January 1, 2017.

Ecuador suspended its participation in the negotiations for the initial agreement in 2009. Negotiations to access the agreement resumed in January 2014 and were concluded that July, with the legal revision of the agreement completed in February 2015. The agreement has been provisionally applied with Peru since March 2013 and with Colombia since August 2013.

Ecuador will access the agreement based on the principle of regional integration with the Andean Community. The agreement will remain open for signature by Bolivia, the other member of the Andean Community. Bolivia currently benefits from the preferential access that the EU grants under its Generalised Scheme of Preferences.

The agreement provides for progressive and shared liberalization through a comprehensive and balanced free trade area. Upon entry into force, the majority of products from Ecuador and the EU will gain free access to the other party's market. Other products will benefit from gradual tariff reductions, but certain sensitive agricultural products have been excluded on each side, or will only benefit from limited access in the form of tariff rate quotas.

According to the EU, the benefits of the current agreement with Peru and Colombia include savings on import duties worth around EUR500m (USD538m) at the end of transition periods.

In 2015, the EU was Ecuador's second largest trading partner, with trade worth EUR4.59bn. The EU expects its exports to Ecuador to increase by 42 percent under the agreement, with exports from Ecuador to the EU to rise by 30 percent.

TAGS: free trade agreement (FTA) | tariffs | trade treaty | Colombia | Ecuador | agreements | Bolivia | Peru | trade | European Union (EU) | Europe