CURRENT STATE OF FTAS IN ECUADOR with USA

ATPDEA

Campoverde Julio

Erazo Fabrizzio

Guerrero Maria José

Patiño Armando

Vásquez Juan José

August 2013

THESIS STATEMENT

The political and economic effects on the ATPDEA between the United States and Ecuador, created tensions after the asylum issued to Julian Assange; the relations have gotten worse followed by Snowden’s case.

The volume on exports have gone up, from the present Ecuadorean government.

Attempting to look for new commercial partners for the three main products (broccoli, tuna and flowers) exported by the extinguished ATPDEA.

THE ANDEAN TRADE PREFERENCE AGAINST DRUG ERADICATION ACT (ATPDEA)

It started as ATPA and it was enacted in 1991 to fight against drug production and trafficking in Bolivia, Colombia, Ecuador and Peru. It expired in December 2001. It offered benefits to these countries.

ATPA turned into ATPDEA in 2002 until December of 2006. It allowed around 4800 products to enter to the USA with not tariff.

Ecuador requested the extension of the ATPDEA to USA until December 2010

A new negotiation allowed Ecuador to export its products under the ATPDEA until February 2011.

In October of 2011 Ecuador requested once again the extension of the ATPDEA. USA allowed until 31 July of 2013

Taken from:Instituto de Promoción de Exportaciones e Inversiones. Page 30http://www.proecuador.gob.ec/wp-content/uploads/downloads/2012/01/PROEC-GCE2011-EEUU.pdfhttp://www.comunicacion.gob.ec/2013/06/http://www.youtube.com/watch?v=WRZ88CFZg1s VIDEO )minute 2:07)

The embassador Nathaly Celi was working to renew the ATPDEA in June 2013 but…

…The government of Ecuador quit the ATPDEA allegating sovereignity about Edward Snowden’s case.

THE TENSIONS THAT PROVOKE ECUADOR BREAKS DOWN THE ATPDEA INDEFINITELY

Ecuador issues asylum to Julian Assange• August 16, 2012• Wanted for USA for

leaking confidential information.

Snowden leaks confidential information of the NSA• May 2013• Wanted for stealing and

sharing condifential information.

The Consul of Ecuador in England gives a safe-condut to Snowden• June 22, 2013• It allows Snoden to

move from Hong Kong to Russia

Rafael Correa denies the

government issued a safe-

conduct.Ricardo Patiño

considers to offer asylum to Snowden

The Vice President of the USA, Biden calls Correa to be

aware Ecuador quits the ATPDEA

Taken from:Consulado de Ecuadorhttp://www.consuladodeecuadormn.com/ecuador-concede-asilo-a-julian-assange/

In June 17, 2013 the Ambassador of Ecuador in United States launches a Campaing called “KEEP TRADE GOING” which explained to the the USA senate that if the ATPDEA ends it would mean hundreds jobs threaten and economy growth decrease.

Main Imported Products with Atpdea

N° DESCRIPCIÓN2011 - USD

2012 USDVariación 2012/2011

Participación en 2012

% del Arancel

1 Rosas frescas/Nesoi 91768393 89044935 -2,97% 38,46% 6,80%

2 Atún en aceite/seco/Hermético/Nesoi 40756014 52255385 28,22% 22,57% 12,50%

3 Atún /Skipjack/En aceite 10325212 14987596 45,16% 6,47% 35%

4 Brócoli sin tallos/Reducidos en tamaño/Crudos/Precocidos/En

contenedores ind.

11476698 13807623 20,31% 5,96% 14,90%

5Atún/Skipjaks/Preparados/

Precocidos/en contenedoreso sin contenedores

3912920 15245366 289,62% 6,59%1,1

cents/kg

6 Atún Blanco/ En aceite/En contenedores

11571014 6179798 -46,59% 2,67% 12,50%

8 Brócoli sin tallos/ Reducidos en tamaño / Crudos/Precocidos/ En

contenedores ind.

4641068 5689944 22,60% 2,46% 14,90%

12 Rosas con tallo corto y frescas 2345847 2723018 16,08% 1,18% 6,80%

      Fuente (Comisión de Comercio Exterior de Estados Unidos) - Diseño Editorial MásQmenos

FACTS- Economic characteristics among the most imported products (Flowers, Tuna and Broccoli).

http://asambleanacional.gob.ec/blogs/marisol_penafiel/2013/07/03/marisol-penafiel-en-el-programa-imbabura-habla-sobre-el-atpdea/

Ecuador without the ATPDEA

According to the Ministry of Foreign Trade, the government has established a drawback which compensate ecuadorian entrepeneurs who are affected by the resignment of the ATPDEA.

The products which are going to be benefited with this new law are specially the flowers, broccoli and tuna. These products represent the 80% of the elements that are exported to the U.S. throughout this mecanism. However, the support will be for all the exporters that entered to the U.S. market without paying any taxes.

Taken from: La Ciudadana (Radio Oficial del Gobierno del Ecuador) http://www.laciudadana.gob.ec/index.php/component/k2/item/1106-asamblea-aprobo-incentivos-al-sector-productivo-que-compensa-al-atpdea?Itemid=152

EXPORTS TO UNITED STATES UNDER ATPDEA

Flowers Tuna Broccoli

Modified from: Banco Central del Ecuador 2013. Web 11 August 2013http://www.portal.bce.fin.ec/vto_bueno/comercio/consultaTotXPaisNandinaConGrafico.jsp?tipo=E&tipoGrafico=column&codPais=249&FechaInicial=2011/01&FechaFinal=2011/12

Table 1Exports from Ecuador to United States 2011 based on the 3 main products exported on the ATPDEA

COUNTRY

DESCRIPTION

FOB DOLLAR

UNITED STATES

FLOWERS 186.473,26

TUNA 78.389,66

BROCCOOLI 6.224,29

Modified from: Banco Central del Ecuador 2013. Web 11 August 2013http://www.portal.bce.fin.ec/vto_bueno/comercio/consultaTotXPaisNandinaConGrafico.jsp?tipo=E&tipoGrafico=column&codPais=249&FechaInicial=2012/01&FechaFinal=2012/12

COUNTRY

DESCRIPTION

FOB DOLLAR

UNITED STATES

FLOWERS 186.958,13

TUNA 91.413,70

BROCCOLI 6.458,95

Table 2Exports from Ecuador to United States 2012 based on the 3 main products exported on the ATPDEA

NEW COMMERCIAL PARTNERS PROPOSAL FOR TUNA EXCHANGE

China

The tuna in China is known to be manipulated to grow faster Tariff 5%

ColombiaIt can be used as a bridge from Ecuador

to United States with a very low tariff Tariff 0%

BoliviaClose country wich is known to have

good relations with Ecuador Tariff 14.3%

Organización Mundial del Comercio:http://tariffdata.wto.org/ReportersAndProducts.aspx

USA: Tariff on TUNA 15,6%

NEW COMMERCIAL PARTNERS FOR FLOWERS

To send Flowers to Colombia (Low Cost)

Ecuador and Colombia are part of the Andean Community which allows to commercialize Andean products

Colombia FTA

Colombia signed FTA and it exports flowers to USA.

Tariff

0%

To Export to Germany (Higher Cost of transportation)

This country demands tons of flowers

Colombia signed FTA and it exports flowers to USA.

Tariff

2,5%

To Export to Canadá

It is almost as exporting flowers to UNITED Stated

Colombia signed FTA and it exports flowers to USA.

Tariff

0%

USA: Tariff on flowers 6,8%

Taken from United States International Trade Comission. Page http://www.usitc.gov/publications/docs/tata/hts/bychapter/1301C06.pdfOrganización Mundial del Comercio:http://tariffdata.wto.org/ReportersAndProducts.aspxhttp://www.expoflores.com/index.php?option=com_content&view=article&id=726:mayores-importadores-de-flores-del-mundo&catid=53:e-flor-junio-2013&Itemid=152

NEW COMERCIAL PARTNERS PROPOSAL FOR BROCCOLI

COLOMBIA

• Broccoli can be exported to Colombia without paying any tariff 0%.

• Andean Community

JAPAN

• Japan demands tons of broccoli monthly.

• The tariff is 3% for Ecuadorian Broccoli due to the GPS.

GERMANY

• To export broccoli to Germany which one of our largest market, Ecuador has to pay 14.40% of taxes.

According to CORPEI:

http://www.pucesi.edu.ec/pdf/brocoli.pdfCORPEI, Corporación de Promoción de Exportaciones e Inversiones del Ecuadorhttp://www.eumet.net/rev/japon/00/jap-ecu.htm

CONCLUSIONS

We can conclude that Agreements are positive for Ecuador, however to base all the exports in one country it is not viable because relations between countries can be affected someday. Ecuador should look for new commercial partners for all its production instead of depending on United States to commercialize them abroad.

Works Cited

BCE. Banco Central del Ecuador. 23 July 2013. 10 August 2013 <http://www.portal.bce.fin.ec/vto_bueno/comercio/consultaTotXPaisNandinaConGrafico.jsp?tipo=E&tipoGrafico=column&codPais=249&FechaInicial=2011/01&FechaFinal=2011/12>.

—. "Banco Central del Ecuador." 24 July 2013. 25 August 2013 <http://www.portal.bce.fin.ec/vto_bueno/comercio/consultaTotXPaisNandinaConGrafico.jsp?tipo=E&tipoGrafico=column&codPais=249&FechaInicial=2012/01&FechaFinal=2012/12>.

Ciudadano, JV El. Periódico Digital del Gobierno de la Revolución Ciudadana. 15 May 2013. 28 August 2013 <http://www.elciudadano.gob.ec/index.php?option=com_content&view=article&id=42045:campana-keep-trade-going-resalta-la-importancia-de-ecuador-como-socio-comercial-de-eeuu&catid=40:actualidad&Itemid=63>.

Comunicación, Secretaría Nacional de. Secretaría Nacional de Comunicación. 27 July 2013. 28 August 2013 <http://www.comunicacion.gob.ec/2013/06/>.Consulado de Ecuador. 16 August 2012. 28 August 2013 <http://www.consuladodeecuadormn.com/ecuador-concede-asilo-a-julian-assange/>.

DEO. "Periódico Digital del Gobierno de la Revolución Ciudadana." 1 July 2013. 24 August 2013 <http://www.elciudadano.gob.ec/index.php?option=com_content&view=article&id=43459:gobierno-aclara-malinterpretaciones-sobre-caso-snowden&catid=40:actualidad&Itemid=63>.

Instituto de Promoción de Exportaciones e Inversiones. 01 December 2011. 28 August 2013 <http://www.proecuador.gob.ec/wp-content/uploads/downloads/2012/01/PROEC-GCE2011-EEUU.pdf>.

"Ministerio de Relaciones Exteriores y Movilidad Humana." 02 July 2013. 25 August 2013 <http://cancilleria.gob.ec/canciller-afirma-que-solicitud-de-asilo-de-snowden-continua-en-analisis/>.

Radio Oficial del Gobierno de la República del Ecuador. 31 July 2013. 28 August 2013 <http://www.laciudadana.gob.ec/index.php/component/k2/item/1106-asamblea-aprobo-incentivos-al-sector-productivo-que-compensa-al-atpdea?Itemid=152>.

States, Harmonized Tariff Schedule of the United. "United States International Trade Comission." January 2013. 23 August 2013 <http://www.usitc.gov/publications/docs/tata/hts/bychapter/1301C06.pdf>.