Ecuador announced Thursday that it is removing the tariffs which it placed on more than 1,300 Colombian products in July 2009.
The tariffs were instituted due to Ecuador’s fear that the devaluation of Colombia’s currency by over 40% made Ecuadorean exports less competitive.
The removal of the tariffs began in October, and today’s announcement lifts the last trade barriers, which remained on 236 products.
The Ecuadorean minister of industry and productivity said that the decision was taken in order to “fulfil Ecuador’s international commitments.”
Ecuador has used the American dollar as its official currency since 2000, following a financial crisis in 1999. As a result it has reduced control over monetary policy, and cannot devalue its currency to encourage exports.
Ecuador is Colombia’s second largest regional trading partner after Venezuela. Between January and November 2009, Ecuadorean exports to Colombia were worth $624 million, while its imports from its neighbouring country totalled $1.3 billion dollars, resulting in a negative trade balance of $764 million for Ecuador, reports Portfolio.com.
The relationship between Colombia and Ecuador have been improving in recent months, following the suspension of diplomatic relations after a Colombian attack on a FARC camp in Ecuadorean territory in March 2008. Colombian President Alvaro Uribe has expressed interest in meeting with Ecuadorean President Rafael Correa at the Union of South American Nations (UNASUR) meeting to be held in Quito next Tuesday.