Ecuador will notify its intention of beginning negotiation to join Mercosur, while at the same time closing a trade agreement with the European Union. The announcement was made by President Rafael Correa during his regular weekly reports on radio and television.
“The strategy is to begin negotiations with Mercosur which will take eight to ten months and in that time we expect to have closed the trade agreement with the EU”, said Correa who anticipated that talks with Europe will not be under the free trade agreements scheme which does not take into account the asymmetries between economies.
“The decision is to notify Mercosur that we have started negotiations for the incorporation protocol, plus requests such as the possibility of easing non tariff barriers to improve exports and make the common external tariff more flexible”, added the Ecuadorean president.
He said that in the negotiations referred to the common external tariff there are some exceptions contemplated which are crucial for Ecuador, particularly referred to capital goods and inputs.
Ecuador will also ask Mercosur to make more flexible the chapters referred to norms of origin and sensitive products, and on the South Bank investments and the Convergence Fund from the block, “particularly for the development of the so called “Manta-Manaos” axis which should help interconnect the Pacific and Atlantic oceans through the Amazon.
Correa also pointed out that the safeguards clauses referred to foreign exchange must be considered since contrary to the other members of Mercosur (Argentina, Brazil, Paraguay, Uruguay and Venezuela) Ecuador can’t implement devaluations of its currency since the economy is completely dollarized.
“There’s nothing to lose in beginning negotiations with Mercosur, because it will have no effect in dialogues with the European Union”, underlined Correa.
Besides negotiations with Europe “will not be under any conditions or under any ways” because they will not trespass certain red lines which are vital for Ecuador”, underlined Correa. He also recalled that Mercosur negotiations have a basic principle which states that “until all is convened, nothing is agreed”.
In support of the presidential announcement, Fander Falconi, head of the National Planning and Development Secretariat, Senplades, said that free trade for Ecuador is ‘a means and not a target by itself”. And that is why negotiations will have as the main objective “to strengthen national production”.
Falconi underlined the significance of Mercosur because it is part of the South-South approach and “it is the fifth largest economy in the world, with a population of 286 million”.
But he also emphasized the ‘red lines’ since dollarization impedes Ecuador to appeal to monetary or foreign exchange sovereign policies. “This integration means boosting self determination processes without the classic strings tied to neo-liberal policies and trade treaties entirely disadvantageous for the small economies”.