Support to Promote Integration of Ecuadorian Economy into Global and Regional Value Chains

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The objective of this TC is to support Ecuador in the design and implementation of the country's new trade policy "Más Ecuador en el mundo y más mundo en el Ecuador", aimed at promoting the internationalization of the Ecuadorian economy to achieve an economic reactivation more sustainable and accelerate job recovery. To implement this policy, three strategic lines of work have been identified: (i) promote the country's trade openness and reduce trade costs to facilitate growth and diversification of exports; (ii) promote an adequate business environment to facilitate the attraction and establishment of productive foreign direct investment; (iii) strengthen production and export development for an effective insertion of local companies in global and regional value chains.Ecuador has a significant lag in the internationalization of its economy. First, the country has a limited network of trade agreements, where less than 40% of trade is with preferential trading partners. It does not have a Free Trade Agreement with the United States, its main trading partner, which represents 30% of total exports. Additionally, the country registers an average tariff (12.3% in 2019) quite high compared to several countries in the region (Peru 2.4%; Colombia 5.4%) and still has a wide room for improvement to reduce the logistics costs and times associated with foreign trade operations. (Time to import is 60% greater than the average for the region (documentary compliance) and the time to export 40% greater (customs clearance)).