Press Articles

Our business relationship with the USA ( 2018-08-24 )

The main solution to improve the commercial relationship with the United States is to conclude a commercial agreement and a bilateral investment treaty with that country, where it is clearly established that in case of discrepancies between the parties, they can submit them to the international arbitration system that they they choose, for which purpose it is necessary to repeal article 422 of the Constitution, which prohibits Ecuador from entering into international treaties or instruments in which it submits to international arbitration.
This does not mean that in the contracts entered into by the Ecuadorian State, or one of its institutions with a third party, the parties can not agree to submit their discrepancies to an international arbitration system, since what the Constitution prohibits is that the State conclude treaties or international instruments in which sovereign jurisdiction is assigned at the request of international arbitration, which is very different. It is necessary to differentiate a contract from a bilateral investment treaty and a commercial agreement concluded between two or more countries.
The recently approved Investment Promotion Law establishes that in investment contracts whose amount exceeds 10 million dollars, the State must agree on national or international arbitration, which is a great step forward in attracting foreign investment, but in My opinion, if this constitutional prohibition is maintained, there will be investors who question the application of an international arbitration system. A commercial agreement with the United States would grant continuity to the preferential treatment our exports of bananas, shrimp, flowers, cocoa, etc. receive to that market, and would incorporate other issues such as intellectual property and sanitary and phytosanitary measures. Several tariffs have to be eliminated or at least reduced, and all the existing procedures for carrying out foreign trade operations must be simplified. It is also necessary to conclude a bilateral investment treaty with our main commercial partner, where it is established that each party will allow and treat investments and their related activities, in a manner no less favorable than that which it grants in situations similar to the investments of its own nationals. ; that investments will not be expropriated or nationalized directly or indirectly; that when a difference arises in investment matters, if this is not solved amicably, the parties may submit them to any dispute resolution procedure, applicable and previously agreed; and, that in tax matters, each party should strive to act fairly and equitably in dealing with the investments of nationals and companies of the other party.
It is advisable that a single window be created in the Central Bank, the Senae - National Customs Service of Ecuador - or in the municipalities, where all customs, fiscal and municipal taxes are paid for importing and clearing merchandise in a very short time. That are unified and simplify criteria in the Superintendency of Companies and in the Banks, to set up companies or to liquidate them in a very short time, especially the financial-accounting criteria, since at present there are no rules of conduct as before we had the doctrines companies, so that officials may have different criteria in similar cases. We need expedited procedures with clear criteria. It is convenient that national and foreign businessmen join to lobby in Washington and Quito, in order to get our countries to conclude a trade agreement and a bilateral investment treaty; and that the Foreign Ministry and the Ministry of Commerce work together, as they apparently are doing now last to achieve that goal. We hope so. (O)
Miguel Macías Carmigniani, lawyer, Guayaquil

<< Back