QUITO, Ecudaor — Throughout history, U.S. relations with Ecuador are ambivalent at best. But for better or worse, economic ties between the two nations are always strengthening. Francisco Borja, Ecuador’s new Ambassador to the United states, hopes for more.
In 2007 Ecuador—like many countries—was on the brink of devastation from the international financial crisis. The pressure to save the country led Ecuador’s government to make swift reforms. The reforms revolved around modernizing Ecuador’s economy and government institutions.
Eight years later, Ecuador is the third fastest growing Latin American economy with a growth rate of 3.8 percent. Because growth and stability are important factors for making investments, many big-name companies are looking to invest in Ecuador. Companies who have already invested include Google, General Motors and Coca-Cola.
Part of Ecuador’s modernization includes a stringent fiscal stimulus plan. By pumping money back into areas other than the economy Ecuador made great social strides since 2007 as well.
Ecuador now sends more than 10,000 students abroad, especially to universities in the United States. They have what Borja describes as a “world-class infrastructure” that includes schools, roads, and housing.
Perhaps the most impressive achievement is that Ecuador has reached all of its U.N. Millennium Development Goals. This means that Ecuador has halved extreme poverty and hunger, achieved universal primary education, reduced child mortality by two-thirds, reduced by three-quarters the maternal mortality ratio, halted the spread of HIV/AIDs and malaria, provided clean drinking water to at least half of those previously without and developed a global partnership for development.
The most crucial of these global partnerships is with the United States. According to recent data, 26.7 percent of all imports to Ecuador come from the United States and 40.5 percent of all exports from Ecuador are bought by Americans. To put this in perspective, the second largest buyer of Ecuadorian exports is Peru at eight percent.
In 2013. this special relationship came under threat when Congress considered dropping Ecuador from the list of countries benefiting from the U.S. Generalized System of Preferences (GSP). Ecuador’s participation in GSP, which was established in 1974, allows Ecuador to enjoy trade perks with the United States. If dropped, these perks—specifically eliminated duties on up to 5,000 types of exports to the United States—would be a devastating loss to Ecuador’s economy.
Fortunately for Ecuador, on June 29, 2015 President Obama signed H.R. 1295, the Trade Preferences Extension Act of 2015. Title II of this act extends GSP until 2017 when it must be voted on again in Congress. Ecuador made the list this year.
With more than 200,000 Ecuadorians living in the United States and 50,000 Americans retired in Ecuador, Borja believes the U.S.-Ecuadorian relationship is set to strengthen. “The changes that have been implemented in Ecuador have laid a solid foundation on which to build and strengthen regional ties. We have our differences of course, but these differences do not and should not define our relationship,” Borja says of the United States. He concludes, “The possibilities are endless.”
Sources: Cuenca High Life, El Universo, The Hill, H.R. 1295, Millennium Development Goals, Observatory of Economic Complexity, Office of the U.S. Trade Representative, World Bank