The Minister of Production assured that the Government is working on two fronts. An appeal for clarification will be presented to the Constitutional Court. In addition, they have already contacted the Costa Rican counterpart to avoid misunderstandings and seek immediate solutions.
During an interview with LA HORA, Daniel Legarda, Minister of Production, Foreign Trade, Investment and Fisheries, categorically assured that the agreement with Costa Rica is not at risk after the ruling of the Constitutional Court, where certain articles referring to international arbitration are objected to. and resolution of conflicts related to investments.
The Government works on two fronts. On the one hand, an appeal for clarification will be presented before the Constitutional Court. On the other hand, they have already contacted the Costa Rican counterpart to avoid misunderstandings and seek immediate solutions.
Legarda stressed that Costa Rica’s response has been one of understanding and total openness, for which a successful resolution is expected.
Legarda stressed that the current government continues to work to promote the opening of markets and investments. There are goals in 4 areas until the end of the period.
Is the trade agreement with Costa Rica at risk after the ruling of the Constitutional Court where certain articles referring to international arbitration and conflict resolution in investment issues are objected to?
No, the trade agreement with Costa Rica is not at risk in any way. The first thing that is important to highlight is that the Court’s ruling ratifies the constitutionality of the agreement. This agreement has 26 chapters or more than a thousand articles and the observations are focused on 17 articles.
The Court is observing the articles referring to the arbitration mechanisms between investor and State, based on article 422 of the Constitution.
So, it must be made clear that the agreement is not unconstitutional, nor is it suspended, nor has it been dropped. The agreement continues and is constitutional. What we must do is make the adjustments that are requested on the observed articles.
The National Government and the Ministry of Trade, Foreign Production, Investment and Fisheries abide by the ruling, but do not share it at all.
Why do you say that the government abides by, but does not share at all the ruling of the Constitutional Court?
The Government does not agree with this opinion for a fundamental reason. The substance of the opinion is much closer to a political interpretation rather than a legal technical interpretation regarding the subject of arbitration. That’s not just what we say. This is expressed in the saved vote of the four constitutional judges who departed from the majority report.
Arbitration as a conflict resolution mechanism is allowed in the Constitution itself, in article 190, and in national legislation.
In this sense, in the Organic Code of Production, through an approved reform, it was established not only the need, but above all the obligation for the State to agree on an arbitration mechanism in investment agreements. These arbitration mechanisms can be national or international. Therefore, this is allowed from the constitution and also in the regulations
The Constitutional Court missed a very important opportunity to make this issue clear. Therefore, from the Government we are going to request an appeal for clarification before the Court.
What corresponds to the National Government and the ministry, in this sense, is to try to have the greatest clarity through all possible ways. The ultimate goal is that there is that necessary legal certainty
The maximum day tomorrow the request for clarification will go to the Court. What we are looking for is not that the opinion be modified; but it does make it clear what the path is and what options we have.
Have you already contacted the counterpart in Costa Rica? Is there an opening to deal with the issue and solve it as soon as possible?
From the same day last Wednesday we contacted our counterpart in Costa Rica to explain the situation. We have already explained that it is not a rejection of the agreement; it is not a denial or a suspension. These are observations that we must address and, as this is a bilateral agreement, we cannot do it unilaterally.
You have to review it together. The important thing is that there is good spirit and a good predisposition to be able to analyze the alternatives together. We hope to resolve this in the shortest possible time.
Deep down, the two countries share the conviction of having a powerful tool for promoting our international trade and deepening investment possibilities.
Is there a risk that the Court’s ruling affects other agreements already signed or to be signed?
Each analysis carried out by the Court is independent. Each trade agreement has its own analysis. However, it obviously raises concerns. The productive actors have made pronouncements in this regard.
We have clearly stated that unfortunately the Court missed an opportunity to clarify an issue of vital importance, and that it is a necessary condition to be able to attract more international investment.
The Government has done its job and will continue to do its job. We are analyzing all the alternatives and making sure that the opening policy is not affected now or in the future.
Ecuador is very far behind in terms of trade integration. This is what, with the leadership of the President of the Republic Guillermo Lasso, the Ministry of Production and the negotiating team, has been correcting in the country in recent years to put us on a par with the economies with which we compete in the own region.
But the government does not have the complete definition of everything, it also depends on other instances of the State that must be up to the task of what the country and the productive sectors, which generate wealth and employment, demand of them.
What are the goals that have been defined in the few months that the Government has left over current problems such as the one related to the agreement with Costa Rica?
We have four major edges that have been defined, one for each of the vice ministries. In foreign trade, the milestones are marked in relation to the signing of the trade agreement with South Korea and also leaving the negotiation with Canada on track.
The IDEA law in the United States is also added, which is a mechanism to be able to have unilateral tariff preferences. That depends on the United States Congress, but what we are doing is all the necessary lobbying in the Senate and the lower house to be able to advance the efforts as much as possible. In the best scenario, leave the law approved or at least with a fairly important advance regarding its discussion.
In the case of production and industries, we have defined a specific policy that is related to the promotion, above all, of MSMEs. This is called “More SMEs for the world”. It was already developing; but two milestones in particular were missing: the inauguration of 220 More SMEs centers, one for each canton of the country, for closer attention to companies. The infocenters that already exist will be used.
We are also developing the Más Pymes festivals, which are 8 until the end of the administration. One has already been carried out and we have seven ahead in some provinces of the Coast, Sierra, Oriente and we are also looking for a budget to carry out in the Galapagos.
In the case of export and investment promotion, we still have some investment contract signatures pending. Investment contracts have been signed for more than $7,000 million, but we aspire to reach an additional $1,000 or 2,000 million until the end of the period.
In the case of fishing, the milestone is overcoming the yellow card, which is the sanction that the European Union gave us four years ago for not being able to demonstrate the traceability and sustainability of our fishing sector.
We have made a huge effort in the last two years with a budget of $68 million. They have not yet been completed, but a good part has already been carried out in order to have the best traceability system in the western hemisphere and perhaps one of the best in the world. This also pays in the fight against illegal, unreported and unregulated fishing. (JS)