U.S. preference system approval to benefit Ecuador

September 12 , 2011

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U.S. preference system approval to benefit Ecuador

Ecuadorian exporters have responded positively to the U.S. extension of the Generalized System of Preferences (GSP), website Lahora.com.ec reported.

The system is a trade preference agreement for around 130 developing countries and allows for the lowering of tariffs, which is vital for Ecuador given it's difficult situation with low global banana prices and the cancellation of the Andean Trade Promotion and Drug Eradication Act (ATPDEA) in February.

Ecuador's Minister for Production Nathalie Cely

On the supply side, the Ecuadorian government recently stepped in to provide US$2 per bunch subsidies to banana growers.

The extension has been approved by the U.S. House of Representatives and is pending approval from the Senate.

Ecuadorian Minister for Production Nathalie Cely, announced on her Twitter account the new deal included several products that were previously in the list of preferences under the ATPDEA.

"What is missing is broccoli, roses, textiles and pouch tuna, hence the importance of getting the ATPDEA," she said.

Federation of Exporters (Fedexpor) chief executive Felipe Ribadeneira also applauded the decision.

"It's very good news because it means there already exists an agreement between Republicans and Democrats," he told La Hora.

The Ecuadorian American Chamber of Commerce joined social media savvy Cely in spreading the news via its Facebook page.

"Good news: The House of Representatives in the Congress yesterday approved the extension of the GSP (Generalized System of Preferences), which Ecuador shares with another 130 countries. The preferences are less broad and deep than the ATPDEA, but include a good number of products that Ecuador exports," the chamber said.