The past two weeks, following the implementation of tariffs on all countries by the United States, have forced us to reflect not only globally, but also on the issues affecting each country and productive sector. It cannot be ignored that the United States represents a significant and relevant market worldwide, meaning that any trade decision it makes has immediate and profound effects on the economies of its trading partners.

To understand this new situation, it's helpful to take a step back and look at the bigger picture. Between 2007 and 2010, Ecuador participated in the negotiation process for a free trade agreement with Peru and Colombia. However, due to decisions unrelated to business and international agreements, our country decided to withdraw from those negotiations. Peru and Colombia moved forward and succeeded in eliminating tariffs on all their products. We, on the other hand, were left behind.

Not only was a historic opportunity missed, but the renewal of certain tariff preferences granted to us by the United States was also lost, which consequently reduced our competitiveness and market share in key markets. This was particularly felt in high-volume products, where we compete directly with our Latin American neighbors and also with Asian players.

Subsequently, Ecuador entered into a negotiation process so that strategic products such as bananas and shrimp could enter the US market without tariffs, also achieving some preferences for other important items such as flowers and certain fruits.

And why is it important to keep this context in mind? Because in this new situation, Ecuadorian products that had previously enjoyed tariff advantages are now at a disadvantage: they face increases exceeding 10%. Other products that previously had tariffs of 3%, 4%, 5%, or 12% now face burdens exceeding 22%. In other words, a new scenario of disadvantage has been created.

In this context, our sector, the avocado industry, emerges. It's relatively new and hasn't yet completed its phytosanitary certification process. Previously, due to our low production and the lack of a phytosanitary agreement, we had a low tariff burden, with values of just cents per kilo exported. Translated into a percentage per kilo, it was truly minimal. Now, with the new system, a 10% tariff has been added, but at the same time, our neighbors—Colombia and Peru—have also received a similar increase. This puts us, at least in theory, on equal footing.

The big unknown remains Mexico. If a tariff on Mexican avocados is indeed implemented, the impact on its supply would be undeniable. This would open up opportunities first for major regional players like Colombia and Peru, but also for us. As new entrants, we could gain access to a different share of the US market, one we hadn't considered before this change in the rules of the game.

Therefore, it's still too early to say whether this situation is good or bad for us. The truth is, being a young sector, we have greater flexibility to navigate a turbulent environment and could take advantage of a window of opportunity that didn't exist before.

Finally, there is a strategic aspect worth highlighting: Ecuador, as a country, is not directly involved in the current “trade war” between the United States, the European Union, and China. Rather, we have free trade agreements that place us in an advantageous position. We already have a treaty in force with Europe. We recently signed one with China, a process that now requires progress on phytosanitary protocols and other technical aspects. Furthermore, we have been finalizing agreements with neighboring countries, which positions us favorably to supply neighboring markets.

For all these reasons, as the Ecuadorian avocado sector, we maintain high expectations. This situation could accelerate our growth and allow us to establish a stronger and more robust presence in key international markets such as the United States.

Santiago Pinto, Director, Iteranza, spinto@interanza.com , Ecuador