The General System of Tariff Preferences (GSP) that the US maintains with Ecuador and other 120 developing countries expires on December 31, 2020.
President Lenin Moreno will anticipate today, Wednesday, February 12, in his appointment with his counterpart Donald Trump , to manage the renewal of these preferences and the inclusion of new products such as broccoli, roses, artichoke and tuna in the bag inside the system.
The GSP is a unilateral mechanism through which the US grants preferential access conditions to a selection of products (low rates or 0% rate). The House of Representatives speaks for its renewal every three years. At the end of this, the approval will be in the hands of a new government .
According to the Ecuadorian Federation of Exporters ( Fedexport ), thanks to the GSP, the country exports about $ 400 million annually in 300 products such as tropical fruits , canned vegetables, wooden items , among others. For unpaid tariffs, exporters save about $ 40 million annually.
That is why the renewal of the GSP and the incorporation of new products is important so that Ecuador’s non- oil exports do not lose competitiveness, explains economic analyst José Orellana.
Along with negotiating preferences, says the expert, dialogue is also important with a view to signing a trade agreement between the two countries.
USA and Ecuador currently maintain business tables to analyze this agreement. This Tuesday, February 11, before leaving for Washington, Moreno said he will request speed in the negotiations . He gave as an example the agreement with the European Union (EU). “It has improved and benefited the productivity and exports of Ecuador. I believe that exactly the same can be achieved with the United States. ”
USA It is the main trading partner of the Ecuadorian market. The trade balance has remained positive since 2001. In 2018 it closed with $ 1,847 million in favor of Ecuador and until September 2019 it was $ 1,663 million, according to the Central Bank of Ecuador.
As for Foreign Direct Investment (FDI), in 2018 it was the tenth country that invested most in Ecuador and until the second quarter of 2019 it ranked sixth.
On the other hand, the general secretary of the cabinet, Juan Sebastián Roldán , indicated on Monday, February 10, 2020 that Ecuador will also show its interest in joining the América Crece initiative.
This US government program, launched at the end of 2019, seeks to catalyze private sector investment in infrastructure in Latin America and the Caribbean.
Its implementation includes assistance to countries to improve their regulatory frameworks and financing structures. In addition to meeting with President Trump, Moreno will have meetings with the Secretary of the Organization of American States, Luis Almagro, and with the president of the World Bank (WB), David Malpass .
On this appointment José Orellana indicates that a possible increase in the funding quota for Ecuador could be discussed . This is one of the international organizations that signed the agreement for $ 10.2 billion in 2019.