Question Period Note: Canada-Ecuador Free Trade Agreement (FTA) Negotiations

On February 4, 2025, the Government announced the successful conclusion of FTA negotiations between Canada and Ecuador, and subsequent procedures towards signature and ratification.

• The Canada-Ecuador Free Trade Agreement (FTA) contributes to Canada's trade diversification strategy, reducing reliance on any single partner by opening new markets for Canadian businesses and enhancing their ability to compete on the global stage.
• This modern and comprehensive FTA reflects the shared interests of both nations by eliminating trade barriers, creating new opportunities for businesses, and ensuring a predictable and inclusive trading environment.
• For Canada, this FTA will remove duties on 97.2% of tariff lines covering effectively 100% of Canada's exports to Ecuador while ensuring that the benefits of trade reach businesses of all sizes, as well as Indigenous Peoples and women-owned enterprises.
• The Canada-Ecuador FTA also includes strong chapters on labour protections, environmental safeguards, and ethical business standards with a requirement for Canada to issue an annual report on activities it undertakes to promote Responsible Business Conduct by Canadian companies.
• This FTA will also maintain flexibility for both countries to regulate in the public interest and in accordance with evolving values and standards of sustainability, social responsibility, and equitable economic development.

The conclusion of negotiations for the Canada-Ecuador Free Trade Agreement (FTA) was announced on February 4, 2025, following negotiations spanning just under a year. This FTA will further bolster an already burgeoning bilateral trade relationship between Canada and Ecuador, which has been steadily increasing in recent years, growing at an average annual rate of 8.4% and reaching nearly $1.4 billion in 2023. Canadian exports totaled approximately $661 million (mainly cereals and mineral fuels), while imports totaled $699 million (mainly mineral fuels, ores, fruits and nuts, and cocoa). Furthermore, Canadian companies are among the largest foreign investors in Ecuador, with Canadian direct investment in Ecuador totalling $4.4 billion in 2023, after growing by over 400% since 2015.

The Canada-Ecuador FTA, alongside eliminating trade barriers and creating new opportunities for businesses through diversification of trade, also ensures a predictable and inclusive trading environment through its dedicated chapters on gender, Indigenous Peoples, environment, and small and medium-sized enterprises. Additionally, all of these chapters contain non-derogation clauses, which commit Canada and Ecuador not to weaken or reduce the rights of workers, women, or Indigenous People and environmental protection to encourage international trade and investment. Overall, these provisions not only enhance market access and economic opportunities but also promote ethical and inclusive trade practices, advocating for responsible and fair global commerce.

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