Free trade plays a critical role in promoting economic growth, job creation, competition, innovation and efficiency, while diversifying options and lowering costs for consumers. Ecuador has prioritized free trade in recent years and is actively negotiating or finalizing multiple free trade agreements (FTAs) to enhance its economic integration and diversify its markets.
In January 2025, Canada successfully concluded FTA negotiations with Ecuador. While the text of the agreement remains under review and has not yet been ratified, published summaries indicate that it is a comprehensive trade agreement covering market access for goods, services, and investment, with provisions on environment, labour, Indigenous Peoples, gender equality, and small and medium-sized enterprises. The agreement aligns with both Canada’s diversification goals and Ecuador’s economic growth efforts and aims to support increased cooperation in sectors such as agriculture and investments. Bilateral trade between Canada and Ecuador has nearly doubled since 2021 and currently stands at CAD $1.9 billion. Canadian direct investment in Ecuador reached CAD $4.4 billion in 2023, having tripled in the last five years, making Canada one of the largest foreign investors in Ecuador.
Strengthening Negotiation Capacity Through EDM
Working in close collaboration with the Ecuadorian Ministry of Production, Foreign Trade, Investments and Fisheries (MPFTIF), the Cowater International and Institute of Public Administration of Canada -led Expert Deployment Mechanism for Trade and Development (EDM) has supported Ecuador’s institutional and negotiating capacity in three key areas:
- Labour and environmental standards and provisions in FTAs;
- Provisions related to state-owned enterprises (SOEs) and
- Integration of inclusive trade provisions, with a focus on provisions that protect and promote the participation of Indigenous Peoples in trade.
Labour Standards and Inclusive Trade Provisions
At the request of MPFTIF, EDM mobilized expertise to support Ecuador in training trade negotiators on labour issues, and specifically on obligations to protect and advance workers’ rights. Key areas of technical assistance (TA) included Canada’s approach to labour standards, how labour is regulated in Canada and how these issues intersect with inclusive trade, gender, environment, and climate change.
Virtual webinars and in-person meetings reached over 30 government officials working on trade-related negotiations and provided access to specialized knowledge, including labour provisions in Canadian FTAs with Peru and Ukraine, International Labour Organization (ILO) treaties and CUSMA provisions. According to the Government of Canada’s published summary, the Labour chapter in the Canada-Ecuador FTA negotiations includes 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.
State-Owned Enterprises and Market Principles
A second major area of technical assistance provided by EDM focused on FTA provisions related to state-owned enterprises (SOEs) and designated monopolies. Over 42 government officials, including 23 women, received technical training on these topics. The TA addressed Ecuador’s challenges in navigating these provisions, especially important given the significant role of SOEs in Ecuador’s economy. The TA encompassed support across two main components:
- A research paper containing a detailed analysis of SOE provisions in FTAs, focusing on the TPP/CPTPP model and addressing Ecuador’s unique constitutional and policy context, as well as the relationship with World Trade Organization (WTO) and Organization for Economic Cooperation and Development (OECD) agreements;
- Four virtual capacity-building sessions comprising theoretical presentations and interactive workshops, and tailored advisory services to support consensus-building and Ecuador’s negotiation strategy.
Based on publicly available summaries, the negotiated Chapter on SOEs and designated monopolies includes commitments to ensure that commercial activities of SOEs are generally conducted in accordance with market principles. The Chapter addresses 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 provisions aim to ensure a level playing field in the market.
Integrating Indigenous Peoples in Trade Policy
A third major area of EDM support focused on producing new research and engaging Ecuadorian trade officials in integrating Indigenous Peoples’s rights in FTAs. Over the past two decades, more than 30 FTAs globally have included provisions aimed at protecting or promoting Indigenous Peoples’ rights. Canada’s multilateral agreements, including CUSMA, CETA and CPTPP, contain such language, as do New Zealand’s free trade agreements. However, effective implementation and monitoring of Indigenous Peoples-centered provisions in FTAs remains a relatively new area of research and practice.
EDM supported the development of a study to enhance the participation of Indigenous Peoples of Ecuador in trade. Key recommendations in the study focused on supporting Indigenous-owned micro, small and medium-sized enterprises (MSMEs) with the knowledge, technical expertise and tools needed to fully take advantage of Ecuador’s FTA opportunities. The study also highlighted the importance of Indigenous consultation on natural resources management and investment protections.
According to Canada’s summary of negotiated outcomes, the Canada-Ecuador FTA recognizes the need to identify, reduce and remove trade barriers affecting Indigenous Peoples’ participation in international trade. The agreement includes an economic cooperation-focused chapter, establishing a bilateral committee to support increased participation of Indigenous Peoples in international trade and investment. It also includes a commitment to uphold and not weaken domestic laws and protections on Indigenous Peoples’ rights to attract trade and investment.
Building Global Trade Capacity Through Innovation and Inclusion
Cowater International implements a large portfolio of projects in the trade and investment space and has spearheaded innovative research on mainstreaming gender provisions in free trade agreements, as well as integrating inclusion and disability provisions. Research on the specific provisions around Indigenous Peoples in FTAs, developed with funding from the Government of Canada through EDM, adds new knowledge to an evolving area of international trade negotiations. To date, EDM has delivered 100 technical assistance projects to support 16 countries, 8 of which were supported through the ASEAN Secretariat in enhancing their trade and investment opportunities.
