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What we heard: Consulting Canadians on possible free trade agreement negotiations with Ecuador

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Overview

On November 24, 2022, Canada and Ecuador announced the launch of exploratory discussions toward a potential Canada-Ecuador Free Trade Agreement (FTA). These discussions have identified strong alignment in our respective approaches to trade policy.

Following this, the Government of Canada tabled its Notice of Intent to initiate negotiations for an FTA in the House of Commons and is currently completing the remaining domestic procedures before officially commencing negotiations with Ecuador.

Background

While Canada continues to deepen engagement across the Americas region, we are also exploring opportunities to advance commercial relations bilaterally. To this end, Canada is exploring the possibility of an FTA with Ecuador.

Canada and Ecuador enjoy strong bilateral relations supported by growing trade and investment ties between our countries. In 2021, total bilateral merchandise trade between Canada and Ecuador was $953 million. Canadian exports to Ecuador totalled $573.3 million (an increase of 45.3% from 2020), led by farm, fishing and intermediate products, energy products and industrial machinery, as well as equipment and parts. Imports totalled $379.7 million, led by farm, fishing and intermediate products, consumer goods, and metal ores and non-metallic minerals. As of 2021, Canada had the largest stock of foreign direct investment in Ecuador at $3.7 billion, led by investments in Ecuador’s mining sector.

Building off this significant growth in bilateral commercial relations, on November 24, 2022, the Honourable Mary Ng, Canada’s Minister of International Trade, Export Promotion, Small Business and Economic Development, and Ecuadorian Minister for Production, Foreign Trade, Investment and Fisheries, Julio José Prado, met in Mexico City and announced the launch of exploratory discussions toward a potential Canada-Ecuador Free Trade Agreement.

An FTA would demonstrate Canada’s commitment to its bilateral relations with Ecuador and benefit importers and exporters of goods and services, investors and consumers, by improving bilateral market access and enhancing the transparency and predictability of our trading and investment environment. Such an agreement would also demonstrate Canada’s commitment to reinforcing economic cooperation in our hemisphere, complement concurrent trade policy engagement within the region, and promote an open, inclusive and rules-based international trading system.

Summary of consultations

From January 7 to February 21, 2023, Global Affairs Canada held public consultations to receive the views of Canadians on a possible Canada-Ecuador Free Trade Agreement (FTA). Public consultations consisted of a Canada Gazette notice inviting written submissions and a dedicated webpage.

Global Affairs Canada received a total of 38 written submissions from across the country covering a broad range of sectors, including:

Notably, some stakeholders which submitted are larger organizations and associations representing multiple stakeholders. As such, the scope of stakeholder engagement might be larger.

Figure 1. Written submissions received during public consultations, according to stakeholder type

Figure 1. Written submissions received during public consultations, according to stakeholder type
Text version - Figure 1. Written submissions received during public consultations, according to stakeholder type

Submissions by stakeholder type

  • Agriculture (34%)
  • Provinces/Territories (21%)
  • Civil society (13%)
  • Industry/Business (8%)
  • Individuals/Academia (8%)
  • Labour/Human Rights (6%)
  • Mining (5%)
  • Manufacturing/Food Processing (5%)

Overall, stakeholders expressed a high level of support for the potential Canada-Ecuador FTA, highlighting the benefits of increased trade with Ecuador and the potential opportunities in this market. However, some stakeholders expressed concern regarding:

What we heard from stakeholders

Agriculture and Agri-Food

A majority of submissions (34 percent) the government received were from agricultural and agri-food organizations. Export-oriented sectors (e.g. oilseeds, beef, grains, pulses) expressed support for a possible bilateral free trade agreement with Ecuador, noting that it would allow them to diversify their exports and boost their competitiveness in the region. They noted that any potential agreement would need commitments to ensure that regulatory measures affecting trade in agricultural products are transparent and not applied in a manner that creates unjustified barriers to trade. They would also support the creation of cooperation mechanisms aimed at avoiding and resolving trade irritants.

While stakeholders from supply-managed sectors (i.e. dairy, poultry, eggs) indicated that they are not opposed to negotiations towards an FTA with Ecuador, they insisted that Canada refrain from making market access concessions for supply-managed products.

Mining

Canadian mining companies providing input through the public consultation process stressed the importance of including investor protection in a Canada-Ecuador FTA. It was noted that, by lowering investor risk, these provisions would have the potential to support new Canadian investment into the Ecuadorian mining sector. These companies also stressed their adherence to responsible business practices and noted their support for inclusive trade provisions in a Canada-Ecuador FTA.

Manufacturing and Food Processing

Positive submissions were received from Canadian manufacturing and food processing firms. The manufacturer cited the improved competitiveness that would result from reduced tariffs on the transportation-related products they export to Ecuador, while the food processing company cited the benefits to the security of Canada’s food supply chains resulting from reduced import tariffs on Ecuadorian produce, fish, and seafood.

Business and Industry

Business and industry stakeholders were highly supportive of an FTA with Ecuador. These stakeholders noted that an FTA could create new opportunities for Canadian businesses through increased investment in Ecuador, as well as expansion of key Canadian exports, such as wheat and grain, to the Ecuadorian market. The stakeholders also indicated support for provisions aimed at increasing the inclusion of underrepresented groups, such as women, in the benefits of trade.

Provinces and Territories

The Government of Canada received a high level of engagement from Provinces and Territories on a possible Canada-Ecuador FTA throughout the consultations, including eight written submissions. Provinces and Territories highlighted the importance of protecting Indigenous peoples in Ecuador and Canada, including safeguarding Aboriginal rights and supporting Indigenous businesses. They also emphasized that an FTA with Ecuador could provide Provinces and Territories with increased opportunities to expand their exports in the region.

Several of the Provinces and Territories underlined two key interests: obtaining tariff concessions from Ecuador on certain key goods, especially in the area of agri-food products, and protecting investment.

Labour and Human Rights

Various stakeholder submissions expressed concern related to labour standards and human rights in Ecuador, including the rights of women and Indigenous peoples. They were primarily concerned about workers’ rights and forced labour as well as meaningful engagement with civil society in both countries. To that effect, these stakeholders suggested a more broad and transparent public consultation process in Ecuador, including the free, prior and informed consent of Indigenous peoples. Stakeholders also expressed support for chapters related to labour and inclusive trade.

Inclusive Trade

Many stakeholders highlighted the significance of advancing an inclusive approach to trade with Ecuador to help ensure that the benefits of trade are widely shared. Several of the submissions noted that an FTA with Ecuador can help benefit women and LGBTQ+ organizations and help establish progressive legal obligations for both countries to cooperate with underrepresented groups. In that regard, many submissions noted the importance of consulting civil society organizations and underrepresented groups to support meaningful participation as well as consultation of affected communities, and comprehensive impact assessments of key areas of concern.

We also heard from several stakeholders advocating to include Indigenous communities during the negotiation process and ensure that there be safeguards in place to protect their rights and territories. These submissions also advocated for free, prior and informed consent of the Indigenous people concerned. The inclusion of Indigenous people was flagged as an opportunity to facilitate economic development and preserve ancestral knowledge and environmental practices.

Investor-State Dispute Settlement (ISDS)

Several stakeholders were concerned with the inclusion of investor-state dispute settlement (ISDS) in a Canada-Ecuador FTA due to concerns regarding Indigenous rights and territories as well as the right to regulate in the public interest, in particular for environmental protection. Due to these concerns, some stakeholders oppose having ISDS provisions in the FTA, while some recommend ensuring the inclusion of meaningful participation with Indigenous communities.

On the other hand, other submissions expressed support for ISDS to protect existing Canadian investments in Ecuador and the need to protect future investments. These submissions noted that the inclusion of ISDS could lead to increased investment from Canada into Ecuador.

Next steps

Despite the conclusion of the dedicated consultation period, the Government of Canada is committed to continuing to hear the views of Canadians regarding free trade agreement negotiation with Ecuador. The feedback received from stakeholders will help inform Canada’s interests and priorities in these negotiations.

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