On Friday, July 24, 2026, Ecuador and Canada sign the Trade Agreement that consolidates and expands the bilateral economic relationship in foreign trade and investment.

The Agreement has not yet entered into force; its application will begin once each country's internal ratification procedures have been completed.

Bilateral Trade Prior to the Signing of the Trade Agreement

According to figures from the Ministry of Production, Foreign Trade and Investment, bilateral trade between Ecuador and Canada reached USD 1.361 billion in 2025, a 4.0% decrease from 2024, when it totaled USD 1.418 billion.

The contraction was explained by lower oil trade.

In the non-oil component, the trend was positive: non-oil trade rose from USD 658 million in 2024 to USD 1.042 billion in 2025, a 58.3% annual increase. Ecuadorian non-oil exports were led by cacao, other mining products, shrimp, and natural flowers, which together accounted for more than 80% of total exports.

Between January and May 2026, total trade between the two countries reached USD 445 million, a year-on-year decrease of 23.1%.

Access to the Canadian Market

Canada agreed to grant tariff preferences to 97.2% of the tariff lines of interest to Ecuador, which represent 100% of Ecuador's effective exportable supply. As of the Agreement's entry into force, 94.5% of those lines —equivalent to 99.6% of the value of current Ecuadorian exports to Canada— will carry a 0% tariff.

88% of the value of Ecuadorian exports to Canada already benefited from a 0% MFN tariff. For these products, the Agreement will consolidate free access and provide greater legal certainty and predictability. Products currently facing tariffs —such as flowers, tuna preparations, fruit juices, palm oil, chocolates, textiles, and footwear— will receive immediate tariff elimination or phase-out through gradual schedules of up to eight years.

Investment Protection Chapter

Chapter 15 of the Agreement is one of its most relevant pillars for the business sector. It establishes a comprehensive investment protection framework that includes:

Guaranteed Protection Standards

The Agreement grants Canadian investors in Ecuador, and Ecuadorian investors in Canada, a robust set of guarantees including national treatment, most-favored-nation treatment, a minimum standard of treatment under customary international law, protection against expropriation without just compensation, and free transfer of funds related to the investment.

Prohibition of Performance Requirements

The Agreement prohibits both states from imposing on investors conditions such as local content requirements, forced technology transfer, or export restrictions as a condition for operating, thereby guaranteeing operational freedom for companies investing in either country.

Investor-State Dispute Settlement Mechanism

The Agreement establishes an international arbitration mechanism through which an investor may file claims directly against the host State if it considers that the State has breached its obligations. The process contemplates a prior consultation stage of at least 180 days, and if unresolved, allows the dispute to be submitted to an international arbitral tribunal under UNCITRAL rules.

Expedited Arbitration for Minor Disputes

For disputes in which the amount claimed does not exceed CAD 10 million, the Agreement provides for an expedited arbitration procedure before a sole arbitrator, with significantly shorter timeframes than the ordinary process, reducing costs and time for small and medium-sized enterprises.

Regulation in Matters of Public Interest

The Agreement also reaffirms each State's right to regulate in matters of public interest, such as the environment, health, the rights of indigenous peoples, and gender equality, without the legitimate exercise of that regulatory authority constituting a breach of the investment guarantees.

Entry into Force

The Agreement will complete the internal ratification procedures in both countries before its entry into force. In Ecuador, this requires approval by the National Assembly and a constitutionality ruling by the Constitutional Court.

Source: Free Trade Agreement between Canada and Ecuador and Analysis of Bilateral Trade between Ecuador and Canada (Directorate of Economic and Trade Studies, Ministry of Production, Foreign Trade and Investment)

This is a summary of the documents cited; it contains information that we have deemed relevant and does not necessarily reflect the opinion of Robalino Abogados and/or CPA Consultores; therefore, it cannot be considered as legal advice rendered.

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