Ecuador Comprehensive and Progressive Agreement for TransPacific Partnership
Ecuador’s joining of the agreement would tap into the countries’ combined Gross Domestic Product (GDP) estimated to be above $13 Trillion. Economically, joining the agreement opens up the country to the Asian-Pacific Economic Cooperation and the broader Regional Comprehensive Economic Partnership, while aligning the country along the Bogor goals of trade and investments. As a politically separate state, the country falls in the Trans-Pacific Region and adheres to the internationally recognized intellectual property laws and is a member of trade-related aspects of treaties in production and property rights. The country stands to benefit from the expansion of its 8 State-Owned Enterprises in terms of oversight on transactional costs and in the overall shielding of their operation from political interference. Geopolitically, Ecuador stands to harness political cooperation with the world’s economic giants such as the United States, Australia, the United Kingdom, Japan and South Korea; cultural and language rights, while the country’s geographical proximity to Chile, the Agreement’s epicentre, gives it a competitive advantage.
2% of the GDP. In another perspective, with an economic freedom score of 48. 5 as at 2018 and notable decrement in the areas of fiscal health, property rights, labour and government integrity, the implication is that the country requires an external cooperation in the quest for comprehensive and integrated growth. This is necessitated by high cost of doing business as a result of weak rule of law and unstable regulations on labour laws that inhibit labour mobility; low wages for unskilled and semi-skilled workforce. Existence of price controls by the government and average tariff rate of 6. 1 Billion in 2017 to approximately $27Billion by 2020. Assuming a reduction of tariff rate to 4. 5%, the country would realize cheap imports thus pushing the trade balance upwards from the current deficit of $0.
9 Billion. This would in the long run improve on its annual export variation from the current 13. 5% to approximately 7% by 2020. The country stands to benefit in the production of oil and natural gas with due to transfer of skills and the anticipated labour mobility. In context, an in increase in production would imply an increase in net exports for natural gas from the current 24million cubic meters to approximately 50 million cubic meters by 2020. The opportunity cost of not being the part of the agreement Regional integration will spur Ecuador’s macroeconomic environment and the possibility of missing out in such an agreement would cost the country much in the long run. Notably, the population of CP-TPP member countries and that of the United States account for 40% of the global population that produces approximately 51% of the global GDP.
Liberalization, in this this case, extends to the openness of scrutiny from internationally recognized accounting bodies for the purposes of audit and identification of impediments in the process. As a potential new entrant, Ecuador needs to come up with transparent policies on intellectual property rights as stipulated in the provisions of the CP-TPP. That is, the young government needs to align its policies on intellectual property rights with the globally accepted standards, more so, in the fields of oil and gas development; the significant economic activity of the nation. The government needs to come up with new measures to uphold the environmental chapter of the agreement; incorporating substantive environmental standards that cater for entirely new wildlife protections, carbon emissions, and the overall standardization of agricultural and manufacturing processes in line with the prospects of curbing global warming.
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