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Ecuadorian Agreement

By May 21, 2023Uncategorized

Ecuadorian Agreement: A Comprehensive Guide

The Ecuadorian Agreement, also known as the Agreement on Promotion and Reciprocal Protection of Investments, is a bilateral treaty signed between the United States and Ecuador in 1993. The agreement aims to promote trade and investment between the two countries by providing legal protection and incentives for investors from both nations.

In this article, we’ll look at the key features of the Ecuadorian Agreement, its benefits, and controversies surrounding it.

Key Features of the Ecuadorian Agreement:

1. Protection of Investments

The agreement provides legal protection to investors of both countries, ensuring fair and equitable treatment in case of disputes or expropriation. It also incorporates the most-favored-nation clause, which means that investors from either country will receive the same treatment as investors from other countries in the absence of specific provisions.

2. Elimination of Trade Barriers

The Ecuadorian Agreement aims to eliminate trade barriers and promote free trade between the US and Ecuador. The agreement covers various sectors, including agriculture, services, and intellectual property rights.

3. Dispute Settlement Mechanism

The agreement provides a dispute settlement mechanism, which allows investors from either country to resolve disputes through negotiations and consultations. If the dispute remains unresolved, the investor can take the case to an international arbitration tribunal.

Benefits of the Ecuadorian Agreement:

1. Strong Investment Protection

The Ecuadorian Agreement offers a high level of investment protection to investors of both countries, reducing the risk of expropriation or unfair treatment.

2. Increased Trade Opportunities

The agreement provides opportunities for investors from both countries to tap into new markets, increase their market share and generate more revenue.

3. Job Creation

The agreement promotes economic growth and job creation by attracting foreign investment and increasing trade between the US and Ecuador.

Controversies Surrounding the Ecuadorian Agreement:

Despite the benefits, the Ecuadorian Agreement has been criticized by some groups, particularly in Ecuador. Critics argue that the agreement favors US investors and corporations, and undermines the sovereignty of the Ecuadorian government.

In 2008, Ecuador terminated the agreement with the US, citing the US’s failure to renew the Andean Trade Preferences Act. However, in 2019, the two countries signed a new agreement that reinstated some of the provisions of the original treaty.


The Ecuadorian Agreement is a comprehensive treaty that aims to promote trade and investment between the US and Ecuador. While the agreement has its benefits, it has also been the subject of controversy. Nevertheless, the agreement remains an important tool for investors from both countries, offering legal protection and promoting economic growth.