The Ecuadorian government announced it will enforce tougher controls against contraband activity at the border with Colombia.
The proposed action announced by Ecuador President Rafael Correa included stricter taxes on imports which arrive over land and higher gas prices for vehicles with foreign license plates.
These controls are an attempt to reduce the effects of the rising cost of Ecuadorian goods in relation to Colombian goods.
Ecuador’s problem arose due to the 60% depreciation of the Colombian currency in relation to the US dollar, the currency adopted by Ecuador 15 years ago.
There will be increased controls at the border in order to monitor Colombian imports arriving by land.
The customs tax, applicable to all imports from all countries and at a rate of up to 45% depending on the item, was previously not being applied to products arriving by land.
Ecuador’s battle against illegally imported and exported goods will also be fought with greater vigilance and a stronger presence of cameras at the border.
Correa said that these safeguards will be implemented on the land border between the two countries and will help to regain some dynamism and competitiveness for the province of Carchi, the area most severely affected by the appreciation of the dollar.
The government will also enforce higher gas prices for cargo vehicles with foreign number plates so that they no longer benefit from the fuel subsidy put in place by the Ecuadorian government decades ago.
“We must subsidize fuel for Ecuadorians but why subsidize fuel for foreigners?” added Correa.
Vehicles with foreign number plates arriving from the Colombia’s and Peru‘s borders will pay $3.15 per gallon for fuel. Ecuadorians pay $1.5 per gallon of premium gasoline.
Ecuador, the smallest member country of the Organization of the Petroleum Exporting Countries (OPEC), faces a very difficult economic situation due to the 50% fall in the price of crude oil on an international scale over the past year.
Ecuador’s anti-contraband measures and moves to tighten up the border come as Colombia struggles with another one of its neighbors Venezuela. The problem with Colombia’s eastern neighbor started after Venezuela President Nicolas Maduro shut down several border crossings and deported over 1,000 Colombians after blaming Colombian smugglers for destabilizing his country.