Andean Group - September 2011 (ISSN 1741-4466)

One of the countries Ecuador is most interested in signing a trade deal with is Turkey. Turkey, however, is unwilling to open up fully its agricultural market to Ecuadorean products. The Turks nevertheless want Ecuador to open up its market for industrial goods to Turkish products. The two countries have held two rounds of negotiations, but unless the Turks back down on agricultural protection, the Ecuadoreans say that the talks will go nowhere.
It is also not clear whether China, which has become Ecuador’s major creditor, will agree to Acuerdos de Comercio para el Desarrollo (trade agreements for development). Much like the US, China prefers free trade agreements (FTAs).
On 9 September Ecuador resumed FTA talks with the European Union. The Ecuadorean team is headed by the deputy foreign trade minister, Francisco Rivadeneira. The negotiations were broken off two years ago.
The Ecuadorean government is under pressure from agricultural producers to clinch a deal with the 27 member countries of the EU. Flower exports to the EU, at US$132m in the first eight months of 2011, account for about 20% of Ecuador’s total flower exports. Vegetable growers are even more dependent on the EU: 52% of Ecuador’s broccoli exports go to the EU. Overall, 31% of Ecuador’s non-oil exports go to the EU.

Inflation: In August monthly inflation was 0.49%, bringing the 12 month rate to 4.84%.