Ecuador, having trouble joining EFTA

Ecuadortimes:

The possibility that the country will continue to gain space in the European market through an agreement with the European Free Trade Association (EFTA) has been truncated, after the Constitutional Court of Ecuador objected to what both parties have negotiated on issues of public procurement.

A Plenary Opinion, approved with 9 votes last May 7, resolves to declare this trade agreement as constitutional, but “provided that a reservation is established with respect to Article 6.4 of Chapter 6”. It establishes that companies or suppliers of both parties will have equal treatment when awarding contracts that provide goods and services to the States; however, it clarifies, this is in contrast to Article 288 of the Constitution of the Republic which provides that “in matters of public procurement, priority shall be given to domestic products.

This resolution blocks the entry into force of an agreement that was signed between the parties on June 25 last year, and establishes tariff preferences for more than 1,000 items of products so that Ecuador and this block of Nordic countries (made up of Switzerland, Norway, Iceland and Liechtenstein) can make a free exchange of goods and services.

The reservation applied, explains constitutional lawyer Stalin Raza, will not prevent the National Assembly from approving the agreement, but it does leave its validity in limbo: the bloc of European countries must determine if the agreement begins to govern or not, under this new condition: to leave out what has been negotiated in matters of public procurement.

It is not the first time that the country has inconveniences in this matter when signing an agreement. It had them with the European Union, but that was resolved in the negotiation stage. Daniel Legarda, president of the Federation of Ecuadorian Exporters, believes that the authorities have made the same effort when drafting the agreement with EFTA, by including in an annex a list of sectors that would not be subject to this opening of public procurement. “We are talking about school uniforms, some construction issues. Therefore, we believe that under no circumstances would this be a threat to our Constitution”.

The Ecuadorian Business Committee (CEE) preferred not to refer to the issue, but they expect the Court to make a scope of this Opinion and to pronounce itself again “in the best possible way”. However, Raza mentions that, after a ruling, nothing can be done from the Court and that today, the definition is in ‘the European court’.

EFTA is a market that last year only acquired $ 27 million in Ecuadorian products, but with an agreement could begin to reactivate and increase demand.

A preference could eliminate the 25% tariff on Ecuadorian bananas and allow the fruit to compete again with the Colombian supply, which, thanks to an agreement with EFTA, is now free to enter. In the past, between 50,000 and 70,000 boxes per week were destined for this market, but today the Ecuadorian offer barely reaches 5,000.

Improved access also means opportunities for tuna fishermen. This sector aims to direct between 25% and 30% of its total supply, which was previously sent to Venezuela, a market that stopped buying due to political and economic problems.

To know

Market

EFTA is made up of Switzerland, Norway, Iceland and Liechtenstein. A total of 13.5 million inhabitants.

Exports

Ecuadorian products such as bananas, tuna, shrimp and fresh roses could benefit.

Imports

These countries could sell Ecuador industrial machinery, antibiotics, fertilizers, watches, cheese at a better price. (I)

Source: https://www.expreso.ec/economia/importaciones-efta-acuerdo-comercial-BX2918542