NEW MARKETS AND ADDED VALUE ARE THE WAY AHEAD
Eligibility for preferential trade with the United States offers good export opportunities

IVONNE JUEZ DE ABDEL-BAKI Minister of Industry, Competition, Foreign Trade, and Fisheries

Petroleum is Ecuador’s biggest export, but non-oil exports are growing at an annual pace of 5 % to 6%. These include some of the country’s best known products, such as bananas, tuna, and shrimp, as well as others, including cacao, coffee, and flowers.

“We are concentrating our efforts on increasing exports,” says Ivonne Juez de Abdel-Baki, Minister of Industry, Competition, Foreign Trade, and Fisheries. “We have to work aggressively to promote our products and make them competitive and try to open new markets in other places as well.”

This means taking full advantage of the opportunities for preferential trade with the United States. Formerly a beneficiary of the Andean Trade Preferences Act (ATPA), Ecuador is an eligible country under the Andean Trade Promotion and Drug Eradication Act (ATPDEA).

“ATPDEA will allow us to introduce 6,700 products, including petroleum ones, into the United States market, free of tax,” says Ms. Juez de Abdel-Baki. “What we want to do now is increase production and sales with added value. All our agro-industrial products have export possibilities.”

Nevertheless, the Minister is looking ahead to 2006 when the ATPDEA expires. “We should be ready,” she says. “The United States today is giving preference to bilateral treaties with countries or blocks, and have told us of their willingness to deal with these issues with the members of ATPDEA, so that we can join the process. We want to create a trade office in Washington to prepare ourselves better, and be able to enter jointly to negotiate free trade. If that’s not possible we will do it on our own.”

Source: Ministry of Industry, Competition, Foreign Affairs, and Fisheries

Investment interest in Ecuador’s textile sector is enormous at present thanks to ATPDEA. Sebastián Borja, Executive DIrector of the Association of Textile Industries of Ecuador (AITE), describes ATPDEA as a solid opportunity and foresees a substantial increase in exports. “In 2001, the United States imported US$54 billion worth of garments.That is where the market is.

“It is a question of internal organization in the country, and how we take advantage of that opportunity. We want to direct our efforts towards garments, and not only be providers of raw material, but also of the final product with added value.”

Good friends and trade partners
The United States is Ecuador’s largest trading partner, followed by Latin America, the European Union, and Asia. Ecuadorian exports to the United States, including petroleum, totaled more than US$2.1 billion in 2001. Most of the consumer and capital goods that Ecuador imports are U.S.-produced; U.S. exports to Ecuador last year totaled US$1.6 billion. President Gutiérrez has declared that he wants to enter into a free trade deal ahead of the Free Trade Area of the Americas.

Much of the foreign investment flowing into Ecuador originates from the United States and ends up in the oil sector, with U.S. oil firms playing the leading role in the development of the country’s petroleum industry.
Ecuador’s democratic, market-oriented credentials and determined efforts to combat drug trafficking and money laundering make it a valuable regional ally, and the two nations are co-signatories of the Rio Treaty, the Western Hemisphere's regional mutual security treaty. President Bush has named Ecuador “the best ally and friend of the U.S. in the fight against drug trafficking and terrorism.”

Ecuador is a member in the Andean Pact, the Latin American Economic System, and the Latin American Energy Organization, in addition to 100 international organizations, including the United Nations, the Organization of American States, and the World Trade Organization.

President Gutiérrez made an early trip to Washington shortly after his inauguration last year—the first official visit to the White House by an Ecuadorian head of state in more than a decade. The President says the relationship between Ecuador and the United States is a strong one.

“Obviously, we maintain our independence, our sovereignty, but in aspects that are of common and even of world interest, like the fight against corruption, terrorism, and drug trafficking, the effort to maintain world peace, and the fight against poverty, we are firm allies and good friends of the United States.”