Chilean President Sebastián Piñera and his counterpart from Ecuador, Lenin Moreno, inked a new free trade agreement (FTA) on Friday, providing much sought after benefits for exporters and small and medium-sized enterprises.
Piñera expressed his delight at a deal that both he and Chilean Chancellor Andrés Allamand believe will vastly improve and expand trade in services, electronic commerce, and telecommunications. At the same time, the two countries are hopeful that the agreement will address concerns of labor force participation and gender inequality.
Hoy firmamos Acuerdo de Integración Comercial Chile-Ecuador q incorpora economía digital y Pymes y apoyará recuperación económica de nuestros países.
— Sebastian Piñera (@sebastianpinera) August 13, 2020
Este gran paso con Pdte @Lenin traerá beneficios y oportunidades a exportadores, pymes, emprendedores y a todos los chilenos. pic.twitter.com/TVtSmOC3ZA
The deal is projected to increase the efficiency with which Chilean digital products and services operate in Ecuador, the country’s fifth-largest trading partner. At the same time, it paves the way for Chilean suppliers to be considered for government contracts in Ecuador.
Simultaneously, tariffs have been lowered on agricultural products, which Ecuadorian President Moreno said would benefit “thousands of farmers and producers” on “both sides”. For instance, he said that tariffs on Chilean corn and rice have now been lowered, while all duties on Chilean sugar have now been removed. Tariffs have also been lowered or removed on several other Chilean exports to Ecuador, such as vegetable oil, wheat, pasta, sweeteners, beef, and seeds.
Likewise, Chile is Ecuador’s fourth-largest importer, and the country will benefit from being able to ship bananas, shrimp, and flowers at lower rates. The deal is estimated to benefit over 700 Ecuadorian businesses, which export over $614 million worth of products to Chile each year. Accordingly, it is projected that around 16,000 agricultural workers are expected to gain from this new deal. In fact, tariffs have either been lowered or removed on 160 Ecuadorian products.
Both countries were founding countries of the Forum for the Progress of South America (Prosur), an organization that focuses on regional cooperation and development in South America. Likewise, Ecuador is an observer state in the Pacific Alliance trading bloc, which comprises of Chile, Colombia, Mexico, and Peru.