Canada-Ecuador Free Trade Agreement: Summary of negotiated outcomes

January 2025

Canada and Ecuador began negotiations for a Free Trade Agreement (FTA) in April 2024, following successful exploratory talks that identified strong trade policy alignment, a , and the submission of a Notice of Intent and Canada's objectives to Parliament. After a year of productive negotiations, the sixth and final round of negotiations concluded in Quito, Ecuador during the week of January 27, 2025.   

The Canada-Ecuador FTA negotiations have resulted in a comprehensive trade agreement that addresses market access for goods, services, and investment, and includes provisions on environment, labour, Indigenous Peoples, gender equality, and small and medium-sized enterprises.

A detailed summary of key negotiated outcomes can be found below.

Institutional

The institutional chapters include comprehensive provisions that establish the frameworks by which the Agreement will be administered, interpreted, managed, and implemented. For example, the Agreement establishes a Joint Committee to oversee the implementation and operation of the Agreement as well as to ensure continuous review and prevention of trade issues and challenges. A key institutional chapter is the Exceptions and General Provisions Chapter, which includes provisions to ensure the Parties retain their ability to take measures to protect, among other things, public health, the natural environment, rights of Indigenous Peoples, national security interests and the cultural industries sector.  On culture, Canada secured its traditional exception for cultural industries, thereby ensuring continued flexibility for domestic cultural policy. Additionally, Canada and Ecuador agreed to include provisions for cultural cooperation. These provisions aim to strengthen cultural exchanges, facilitate partnerships, and enhance people-to-people activities.

National treatment and market access

General benefits

The Canada-Ecuador FTA will provide Canadian businesses and workers with unprecedented access to Ecuador, with a population of 18 million people, with the elimination or reduction of tariffs and non-tariff barriers for Canadian companies. When the agreement is fully implemented, Ecuador will remove duties on 97.2% of tariff lines covering effectively all of Canada’s imports. Given that Ecuador’s current tariffs are on average more than twice as high as Canada’s (6.8 percent versus 3.2 percent), tariff elimination will be particularly advantageous for Canadian businesses exporting to the Ecuadorian market.

National Treatment and Goods Market Access

The National Treatment and Market Access chapter provides the framework for the elimination or reduction of tariffs and non-tariff barriers while ensuring effective market access for Canada’s key export interests. This chapter will help reduce the costs of trade, enhance transparency and predictability for Canadian exporters and promote trade in goods. It includes substantive obligations consistent with Canada's existing trade agreements such as provisions disciplining import and export restrictions, import and export licencing, and a Committee on Trade in Goods. Furthermore, the Chapter includes a dedicated section on agriculture, which contains provisions specific to trade in agricultural goods as well as a sub-committee on agriculture.

Agricultural goods

Under this Agreement, Ecuador will provide preferential treatment for Canada’s key agricultural exports such as grains and oilseeds, cereals, meat, pulses, processed foods, and sugar-containing products.

Ecuador has committed to tariff rate quotas and partial duty eliminations for a few sensitive products. Meanwhile, Canada protected its sensitive agricultural sectors, ensuring no additional market access was granted for supply-managed products such as dairy, poultry, and eggs.

This Agreement delivers strong results for Canada’s agriculture and agri-food sector, advancing key interests and creating new opportunities for Canadian producers and food processors to diversify trade relationships.

Fish and Seafood

The Canada-Ecuador FTA will significantly improve market access opportunities for Canada’s fish and seafood sector by eliminating all tariffs on Canadian exports of these goods. Upon the Agreement’s entry into force, over 95 percent of tariff lines for fish and seafood will be duty-free. Tariffs on the remaining 4.9 percent of fish and seafood tariff lines will be eliminated within three years.

During 2019-23, Canada’s exports of fish and seafood to Ecuador averaged $68,000. Over the same period, Canada imported an annual average of $45.1 million of fish and seafood from Ecuador.

Forest Products

The Canada-Ecuador FTA will significantly improve market access opportunities for Canada’s forest products sector by eliminating all tariffs on all Canadian exports of these goods. Upon the Agreement’s entry into force, 75 percent of tariff lines for forest products will be duty-free. A further 13 percent of tariff lines will become duty-free within 7 years and tariffs on the remaining 12 percent of tariff lines will be eliminated within 9 years.

During 2019-23, Canada’s exports of forest products to Ecuador averaged $9.1 million, representing around 1 percent of Canada’s total exports to Ecuador. Over the same period, Canada imported an average of $3.6 million of forest products from Ecuador.

Tariff elimination on key Canadian exports, such as pulp and paper (tariffs up to 10%) and wood (tariffs up to 30%), will benefit forestry workers across the country.

Industrial goods

Canada's industrial goods capacity comprises a wide range of sectors, including metals and minerals, aerospace, automobiles, chemicals and plastics, life sciences, information and communications technology, textiles and apparel, fertilizer and natural gas. 

The Canada-Ecuador FTA will significantly improve market access opportunities for Canada’s industrial sector by eliminating tariffs on all Canadian exports of industrial goods. Upon the Agreement’s entry into force, more than 89 percent of tariff lines for industrial goods will be duty-free. A further 2.2 percent will become duty-free within three years, 9.4 percent will become duty-free within 7 years and the remaining 1.1 percent will be duty-free within 10 years.

During 2019-23, Canada’s exports of industrial goods to Ecuador averaged $316.7 million, representing 44 percent of Canada’s total exports to Ecuador. Over the same period, Canada imported an annual average of $173.3 million of industrial goods from Ecuador.

Tariff elimination on goods such as helicopters (5% tariff), chemicals and plastics (tariffs up to 20%), boring and sinking machinery and parts (5% tariff), cosmetics (tariffs up to 20%), information and communications technology (tariffs up to 25%) and pharmaceutical drugs (5% tariff) will benefit Canadian industrial workers across the country.

Rules of origin

The Rules of Origin chapter includes general and product-specific rules of origin that establish criteria for determining the origin of goods that are clear, as simple as possible, and that leave little room for administrative discretion. The rules of origin outcome allows for accumulation of materials and production, as well a forward-looking provision on cross-cumulation. The rules of origin take into account production and sourcing patterns, as well as regional integration and sectoral interests.

Origin procedures

The Origin Procedures chapter is used to administer the rules of origin of goods in order to enable the trading community to take advantage of the preferential tariff treatment afforded under the Canada-Ecuador FTA. It contains obligations in areas such as certification of origin, record keeping, origin verifications, advance rulings, penalties and cooperation. Accordingly, the Chapter prescribes the processes necessary for traders to take full advantage of the FTA, while at the same time providing the customs administrations with an efficient and effective methodology to ensure that only qualifying goods receive the benefits of the Agreement.

Customs and trade facilitation

With the  as the baseline, the Canada-Ecuador FTA Customs and Trade Facilitation chapter establishes obligations that modernize, simplify and standardize trade-related customs procedures, while safeguarding and providing certainty around the Parties’ ability to adopt or maintain measures to secure compliance by traders with a Party’s laws, regulations or procedural requirements relating to the importation, exportation or transit of goods, such as appropriate declarations of goods and complete payment of applicable duties, taxes, fees and charges by traders, provided those measures are consistent with this Agreement.

Sanitary and phytosanitary measures

The Sanitary and Phytosanitary Measures (SPS) chapter incorporates certain obligations of the , includes robust obligations on science and risk analysis, comprehensive transparency provisions, and establishes mechanisms to resolve trade irritants and enhance regulatory cooperation. The entire SPS chapter is subject to the Canada-Ecuador FTA dispute settlement mechanism. The Agreement preserves the rights of the Parties to take measures necessary for the protection of human, animal or plant life or health.

Technical barriers to trade

The Technical Barriers to Trade (TBT) chapter complements and builds upon the WTO Agreement on Technical Barriers to Trade with robust obligations for technical regulations, conformity assessment and transparency. Through those obligations, the TBT Chapter promotes the use of international standards and the importance of gender responsiveness of technical regulations and standards; creates a mechanism for technical regulations to be considered equivalent; ensures the equal treatment of conformity assessment bodies and results, as well as the availability of information for proposed and adopted technical regulations and conformity assessments procedures at an appropriate time. Finally, the TBT Chapter establishes mechanisms to enhance regulatory cooperation and resolve trade issues

Good regulatory practices

The Good Regulatory Practices (GRP) chapter fosters more objective analysis and greater transparency, accountability and predictability in the regulatory process. More specifically, the GRP Chapter recognizes the importance of public consultations, central coordination, and review processes in the development of regulations and outlines important characteristics for such mechanisms; promotes early planning, the use of regulatory impact assessments and plain language; and encourages the periodic review of regulations as well as participation in cooperation activities.

Investment

The Investment chapter includes a comprehensive set of obligations in line with Canada’s trade agreements, including: non-discrimination at the pre- and post-establishment phases; protections against expropriation without fair compensation; provisions on minimum standards of treatment; and disciplines against performance requirements. Importantly, the chapter features modern drafting ensuring that the Parties maintain their right to regulate and their policy flexibility in critical areas, such as health, safety, the environment, the rights of Indigenous Peoples, gender equality and cultural diversity. Parties have also agreed on a comprehensive set of rules governing investor-state dispute settlement (ISDS), including enhanced transparency of proceedings commitments.

Cross-border trade in services

Canada and Ecuador have negotiated a modern and comprehensive Cross-Border Trade in Services chapter which includes substantive obligations that are consistent with Canada’s existing trade agreements and binds the Parties’ respective services regimes. This chapter ensures market access, non-discriminatory treatment, transparency, and certainty for Canadian and Ecuadorian service suppliers. Canada and Ecuador also included an Annex on Professional Services that sets out guidelines to facilitate the signing of future Mutual Recognition Agreements for the Professional Services Sector. Canada and Ecuador negotiated modern and comprehensive schedules of non-conforming measures for services and investment. These schedules employ a negative list approach that reflect both Parties’ existing regimes and ensures predictability and transparency for service suppliers and investors doing business in Canada and Ecuador.

Development and administration of measures

The Development and Administration of Measures chapter sets out commitments for a Parties’ licensing and qualification regulatory regime. The Chapter provides predictability for service suppliers and investors that require recognition, accreditation, or licensing by ensuring such procedures are objective, transparent, fair, and timely.

Financial Services

Canada and Ecuador negotiated a comprehensive and progressive stand-alone Financial Services chapter as part of the Canada-Ecuador FTA. The Chapter will provide a level-playing field between Canada and Ecuador through a framework of general rules tailored to the unique nature of the financial sector. This includes core obligations such as market access, national treatment and most-favoured nation treatment, as well as modern commitments on electronic payments, regulatory transparency and processing of applications. The Chapter also includes a robust prudential exception, ensuring the ability of financial sector regulators to take measures to preserve the integrity, security, and stability of the financial system.

Temporary movement of business persons

The Temporary Movement of Business Persons chapter strengthens market access for international trade and investment-related activities through provisions that ease the cross-border movement of covered business persons, as well as their corresponding spouses. These provisions aim to improve transparency and predictability when short-term access into Canada or Ecuador is needed, such as to engage in business meetings, establish or oversee a business, or supply a service. For the first time, the Chapter introduces a provision encouraging cooperation between the respective immigration authorities of each country to facilitate the departure of a business person who is no longer legally admissible. Consistent with Canada’s practice, the Chapter only covers temporary access and does not cover permanent employment, residency, citizenship, or professional licencing/certification. Canada also maintains its ability to implement measures to protect public health, safety, and national security. Covered business persons will need to meet certain eligibility criteria, such as education and experience requirements. These criteria are included to uphold the integrity of the domestic labour market and to ensure use by sufficiently qualified individuals.  

Telecommunications

Canada and Ecuador have negotiated a Telecommunications chapter that includes commitments that will provide enhanced regulatory certainty for telecommunications service suppliers when operating or investing in their respective markets. This chapter consists of obligations regarding the access to and use of telecommunications services and ensures that service suppliers will be treated in a fair and objective manner when providing telecommunications services into Canadian and Ecuadorian telecommunications markets. The Chapter does not apply to broadcasting services, except to ensure that broadcasters will have access to and use of telecommunications services. The Chapter also includes commitments intended to promote and improve connectivity to telecommunications networks and services, including for small and medium-sized enterprises, women, Indigenous Peoples, and those in rural communities.   

Digital trade

The Digital Trade chapter includes a series of commitments that align with Canada’s model approach to digital trade, including ensuring that customs duties are not applied on digital products transmitted electronically, and ensuring that data can move across borders. In addition, the Chapter contains obligations that limit data localization and source code disclosure, promote open government data, and which protect personal information online. Overall, the Chapter aims to improve regulatory certainty for businesses seeking to engage in the digital economy in both markets, as well as those specifically looking to engage in cross-border digital trade between Canada and Ecuador. The Chapter also includes commitments to expand and facilitate digital trade opportunities for under-represented groups by cooperating and exchanging information on removing barriers to participation in the digital economy.

Intellectual property (Annex)

The annex on Intellectual Property (IP) Cooperation and Technical Assistance is the first such annex in an FTA for Canada. The Parties will develop a work plan of cooperation and technical assistance activities to enhance and strengthen bilateral exchanges and cooperation on IP, specifically in the areas of geographical indications and trademarks. Under the annex, the Parties recognize their mutual interest in developing their understanding of each other’s IP rights systems, and the importance that IP rights play in promoting innovation, social, economic, and cultural development, as well as economic competitiveness in a knowledge-based economy.

Government procurement

The Canada-Ecuador Government Procurement chapter establishes a number of general principles governing the Parties’ procurement activities, including non-discrimination, transparency, fairness and impartiality. The Chapter also builds upon existing obligations in Canada’s international trade agreements and the WTO Agreement on Government Procurement. These include provisions clarifying that Parties may take into account environmental, socio-economic, and labour-related considerations in the procurement process. The Chapter also includes provisions that seek to facilitate the participation of Canadian and Ecuadorian small and medium-sized enterprises in government procurement. Regarding market access, Parties agreed upon reciprocal market access commitments for covered central-level departments and agencies and other central-level entities, such as Crown corporations and state-owned enterprises. The Chapter also includes certain exclusions for Canada, which maintain the country’s ability to meet public policy objectives, such as promoting environmental sustainability, providing preferences to Indigenous businesses and small and medium-sized enterprises, and ensuring the safety of the Canadian public.

Competition policy

The Competition Policy chapter aims to advance the Parties’ shared goals for a fair, transparent, predictable, and competitive business environment. In line with Canada’s recent comprehensive FTAs, the Chapter establishes strong requirements for procedural fairness. This ensures that Canada’s and Ecuador’s competition authorities are transparent in their investigations and enforcement processes and safeguards the rights of those under investigation. It also encourages cooperation between the competition authorities and sets out measures for them to identify and protect the confidential information they hold. The Chapter is not subject to dispute settlement but includes a consultation mechanism.

State-owned enterprises

Canada and Ecuador have agreed on a stand-alone chapter for state-owned enterprises (SOEs) and designated monopolies. The obligations ensure that the commercial activities of large SOEs generally operate according to market principles, while also recognizing the important role of SOEs in the public domain. The Chapter includes provisions on non-discriminatory treatment, commercial considerations, non-commercial assistance, regulatory impartiality, transparency, and technical cooperation. By promoting fair competition and preventing market distortion by governments, the Chapter will help to ensure a level playing field in the market.

Environment

The Environment chapter aims to mitigate the impacts of trade by committing the Parties to maintain high levels of environmental protection, effectively enforce their environmental laws and to not lower their levels of environmental protection to attract trade or investment. The Chapter includes provisions recognizing the importance of mutually supportive trade and climate change policies, as well as articles to address global environmental challenges, including on plastic pollution, the protection of biological diversity, sustainable fisheries and marine aquaculture, forest management and agriculture, and the promotion of responsible businesses conduct. The Environment chapter includes cooperation provisions to support effective implementation and is enforceable through the dispute settlement mechanisms to ensure Parties respect their obligations.

Labour

The Labour chapter contains comprehensive provisions, that commit both countries to respect and promote internationally recognized labour rights and principles, while effectively enforcing domestic labour laws. The Chapter also includes a non-derogation provision, which prohibits the parties from weakening or reducing the protections afforded in their labour laws. Key features of the Labour chapter include protections related to minimum employment standards, migrant workers’ rights, forced labour in supply chains, and violence against workers, as well as commitments to eliminate practices that undermine freedom of association and collective bargaining rights. The Labour chapter is enforceable through the dispute settlement mechanism of the agreement.

Trade and Indigenous Peoples

This cooperation-based chapter recognizes the importance of identifying, reducing and removing trade barriers that Indigenous Peoples face when participating in international trade. The Chapter is economic-focused and establishes a bilateral committee to facilitate cooperation activities to increase participation of Indigenous Peoples in international trade and investment. It also includes a commitment to enforce and not weaken domestic laws and protections on Indigenous Peoples' rights to attract trade and investment. 

Trade and gender equality

Canada and Ecuador negotiated a cooperative trade and gender equality chapter which aims to increase women’s access to the benefits and opportunities of the Canada-Ecuador FTA. Through the non-derogation article, the Parties commit to implementing and not weakening their domestic laws and protections afforded to women to attract trade and investment. Other commitments include undertaking bilateral cooperation activities to advance gender equality and establishing a committee to oversee the Chapter's implementation.  

Trade and small and medium-sized enterprises

The trade and small and medium sized enterprises (SMEs) chapter highlights the crucial role SMEs play in both economies and commits the Parties to work together to remove barriers so that SMEs may be better placed to leverage the opportunities created by the Agreement. The Chapter also includes specific commitments on information sharing, on undertaking cooperation activities, and on establishing a committee to oversee the Chapter's implementation. 

Transparency, anti-corruption and responsible business conduct

The transparency section of the chapter includes comprehensive provisions to ensure transparency in the process of regulatory development and implementation. The anti-corruption section focuses on promoting integrity among public officials and application/enforceability of anti-corruption laws. Finally, the section on responsible business conduct (RBC) encourages enterprises to adopt internationally recognized standards, guidelines, and principles for RBC. It also commits Canada to issue an annual report on activities undertaken by the Government to promote RBC in Ecuador.

Dispute settlement

This Agreement includes a State-to-State Dispute Settlement mechanism that is efficient, effective, binding, and transparent. The State-to-State dispute settlement mechanism applies across the Agreement, with a few specific exceptions. The mechanism facilitates the resolution of disputes that may arise between the Parties through consultation and cooperation, and encourages the use of alternative dispute resolution mechanisms when appropriate. The mechanism also provides for timely recourse to panel proceedings, prompt selection of panelists, and implementation of panel reports. To promote transparency, the mechanism enables the public to monitor panel proceedings by having access to the Parties’ written submissions and observing hearings, and the final report of the panel must be made publicly available shortly after it is issued to the Parties.