Trade Tensions Escalate: Ecuador Imposes 30% Tariff on Colombian Goods Amid Andean Tribunal Dispute

Original article: Petro vs. Noboa: Ecuador aprieta con arancel del 30% y el conflicto se traslada a tribunal andino

Ecuador has announced a 30% tariff on Colombian goods, citing a lack of reciprocity in cross-border security measures, while Colombia has imposed reciprocal tariffs on dozens of products entering from Quito and suspended electricity sales to Ecuador.

The Colombian government, led by President Gustavo Petro, has appealed to the Andean Community (CAN), initiating an investigation into Ecuador’s imposition of a 30% tariff on imports from Colombia, igniting a trade dispute that has not been resolved through diplomatic channels.

The escalating conflict between the two neighboring countries, which share a border exceeding 500 kilometers, has intensified since late January, evolving into a multifaceted issue that now requires resolution through the legal mechanisms of the Andean bloc, following failed direct negotiations between their foreign ministries.

On Tuesday, Colombia’s Ministry of Commerce, Industry, and Tourism confirmed to The Associated Press that it has decided to file a complaint, alleging that Ecuadorian President Daniel Noboa’s administration has «violated the Cartagena Agreement, which set the tariff for goods traded among Andean Community member countries at zero.»

This legal action represents Bogotá’s primary strategy to counteract the unilateral measure enacted by Quito, which has severely impacted trade flow through the Rumichaca Bridge, the main border crossing between the two nations, where a significant volume of goods, including agricultural products, manufactured goods, and consumer goods, passes daily.

President Daniel Noboa’s government in Ecuador has lodged three formal complaints against Colombia with the Andean Community (CAN) in direct response to the legal actions taken by President Gustavo Petro’s government to overturn the 30% tariff imposed on Colombian products.

The right-wing leader justified this legal counter-offensive as being driven by exceptional circumstances related to national security and the fight against transnational organized crime operating in the border area.

Ecuador’s Ministry of Foreign Affairs argued that its decision to approach the Andean courts stemmed from the necessity to defend its trade and security rights, asserting that the tariff measure does not violate community rules but serves as a legitimate tool to pressure Colombia into implementing more decisive actions against illegal groups operating along the common border, which pose a threat to the stability and security of Ecuador.

What Justifies Noboa’s 30% Tariff?

According to Quito, the 30% tariff effective since February 1 goes beyond a customs tax; it is seen as a measure of «national security.» The Noboa administration claims that Colombia is insufficiently addressing transnational organized crime, and the tariff imposed is a necessary response to Colombia’s lack of robust and equivalent actions at their common border.

The Ecuadorian position aims to establish a direct link between trade and security, arguing that normalized trade cannot be maintained when a constant threat exists to territorial integrity and citizen safety. For Noboa’s government, the tariff announced on January 21 functions as a legitimate pressure mechanism to compel Colombia to fulfill its responsibilities regarding border control and combating organized crime in the bordering area.

Colombia’s Response to the Tariffs

In response, President Gustavo Petro’s government, through the Ministry of Commerce, has lodged complaints with the General Secretariat of the CAN, seeking to classify the tariff as a levy or restriction on intra-regional trade.

This legal strategy aims to demonstrate that, irrespective of the national security justifications raised by Ecuador, the measure constitutes a violation of commitments established under the Cartagena Agreement, which facilitates the free movement of goods originating from member countries without imposing tariff or para-tariff barriers.

According to Caracol Radio, the CAN has already accepted one of these complaints for processing, which means the organization will investigate whether Ecuador violated the principle of free trade as per the Cartagena Agreement.

This decision marks a significant initial advancement for Bogotá’s stance, as it indicates that the regional body—established in 1969 to promote regional integration among its members: Bolivia, Colombia, Ecuador, and Peru—believes there are sufficient grounds to open a formal investigation into the legality of Ecuador’s measure within the Andean regulatory framework.

If the investigation rules in favor of Bogotá, Quito would be forced to lift the measure immediately, as it would be classified as a prohibited restriction.

To adjudicate, the Andean Community must assess whether Ecuador’s security arguments are valid justifications for exception from the free trade principle or whether Colombia is justified in demanding the elimination of the 30% tariff, which has significantly disrupted free transit at the Rumichaca Bridge, impacting hundreds of transporters, merchants, and business owners on both sides of the border.

Escalation of Retaliation Between Colombia and Ecuador

Amidst the tense situation, Colombia opted to suspend the sale of electricity to its neighbor and imposed a 30% tariff on 23 Ecuadorian products, considering it an equitable and proportional measure in response to Ecuador’s actions.

In retaliation, Ecuador’s Noboa government opted to increase tariffs by 900% for Colombia’s transport of oil through the Trans-Ecuadorian Pipeline System (SOTE), a move with a high impact on the economy of the South American nation.

This measure directly affects Bogotá’s ability to export its crude oil via the Pacific, significantly raising logistical costs and reducing competitiveness in international markets.

Despite the exchange of hostilities, the Ecuadorian government insists it has the «will to resolve these differences through Andean institutionalism,» seeking trade based on equitable conditions and mutual respect, as reported by El Espectador.

Meanwhile, productive and commercial sectors in both countries are beginning to feel the effects of a trade war that, beyond the national security arguments posited by Noboa and the legal considerations raised by Petro, ultimately impacts the wallets of ordinary citizens, employment in border regions, and the economic integration promoted by the Andean Community.