Ecuador and U.S. Conclude Trade Agreement Negotiations — But the $2 Billion Shrimp Question Remains

Ecuador just landed its most significant trade deal in years — and the fine print could determine the future of its most important export industry.

What Was Agreed

The U.S. Trade Representative (USTR) and Ecuador's Ministry of Production jointly announced that both countries have "substantially concluded" negotiations on a reciprocal trade agreement. The deal will be signed "in the coming weeks," though no specific date has been set.

The agreement aims to "expand and diversify bilateral commerce and investment" between the two nations. While the full text hasn't been released, the framework builds on recent momentum:

• In November 2025, the U.S. eliminated a 15% surcharge on over 100 Ecuadorian products including bananas, cacao, coffee, pitahaya, mango, pineapple, hearts of palm, and fruit juices
• In January 2026, the two countries signed a critical minerals agreement covering copper, gold, and rare earth elements
• President Trump invited Noboa to a Miami summit on March 7 focused on countering Chinese influence in Latin America

The Shrimp Problem

Here's where it gets complicated. Shrimp is Ecuador's single largest non-petroleum export to the United States, generating approximately $2 billion annually and representing 30% of all non-oil exports to the U.S. market.

The current 15% U.S. tariff on Ecuadorian shrimp remains a major competitive disadvantage — especially after India recently saw its shrimp tariff reduced from 50% to 18%, narrowing the gap.

José Antonio Camposano, president of Ecuador's National Aquaculture Chamber (CNA), put it bluntly: "All agreements Ecuador negotiates must include shrimp." The industry employs hundreds of thousands of workers, primarily along the coast in Guayas, El Oro, and Manabí provinces.

The problem: no shrimp-producing country negotiating with the current U.S. administration has successfully secured a shrimp tariff exemption. Ecuador may face the same wall.

The Dollarization Factor

Ecuador's dollarized economy creates a structural disadvantage that makes trade deals especially critical. Unlike competitors such as India, Indonesia, and Vietnam, Ecuador cannot devalue its currency to make exports cheaper. When tariffs are high and the dollar is strong, Ecuadorian producers absorb the full cost — they can't adjust the exchange rate to stay competitive.

This makes tariff relief the only lever available. Without it, shrimp producers face a slow squeeze.

What This Means for Expats

• Stronger bilateral relationship: A formalized trade agreement deepens the U.S.-Ecuador partnership, which generally translates to better consular services, more investment, and a more stable operating environment for Americans living here
• Coastal economy watch: If shrimp gets excluded from tariff relief, expect economic pressure in coastal communities — Manta, Salinas, Machala, and surrounding areas where the industry is the primary employer
• Food prices: Expanded trade access for Ecuadorian agricultural products could slightly reduce import costs for U.S. goods flowing the other direction, though the impact on everyday prices will be modest
• The China angle: This deal is as much about geopolitics as economics. Ecuador is positioning itself firmly in the U.S. orbit — which has implications for everything from mining investment to technology infrastructure
• Timeline: The agreement still needs to be formally signed and implemented. Don't expect changes at the checkout counter tomorrow, but the direction is clear

Sources: Expreso, El Universo, USTR