The Biden-Harris Administration Should Engage Ecuador

In a region that often makes headlines for lackluster governance and rampant corruption, Ecuador stands out as a notable example of a country where democratic norms appear to be not only on the mend but consolidating. President Guillermo Lasso recently finished his first 100 days in office, charting a delicate path through Ecuador’s complex regional and domestic constituencies. Rather than clashing with a National Assembly where his own center-right Creating Opportunities Party (CREO) commands a mere 9 percent of the seats, Lasso has focused his attention on two critical priorities for Ecuador—pandemic relief and trade.

Ecuador has achieved a record-setting vaccination rate of 200,000 people per day, with more than 50 percent of its population fully vaccinated. The government has shown remarkable competence in managing relationships with multilateral organizations and international nongovernmental organizations, as well as regional and local partners. In its vaccine rollout, Ecuador has staggered days for different groups to allow people a chance to schedule their vaccination appointments and invested in outreach to Indigenous communities in difficult-to-reach parts of the country. This positive trajectory is a welcome reversal for Ecuador from the throes of the pandemic, when bodies lined the streets of the coastal city Guayaquil.

On trade, Lasso himself has spearheaded an ambitious push to increase Ecuador’s involvement in trade agreements. The president recently flew to Mexico in a bid to augment Ecuador’s status in the Pacific Alliance from associate to full membership, and has even floated the idea of an agreement with the Russia-led Eurasian Economic Union.  

This combination of an aggressive pandemic response and thoughtful statesmanship has earned Lasso an approval rating of over 70 percent, an impressive feat in a restive region quick to turn on its political leaders.

However, Ecuador’s progress generally, and Lasso’s success particularly, were far from assured. The government of Rafael Correa brought Ecuador in stark ideological conflict with the United States, and the country itself was a backsliding democracy on the precipice of consolidating autocracy. Over the course of his three presidential terms, Correa clamped down on press freedom, disbanded the country’s largest teacher’s union, and passed numerous constitutional amendments removing term limits and expanding the powers of government officials. In marked contrast to Lasso’s current situation, Correa’s Proud and Sovereign Homeland (PAIS) Party dominated the National Assembly, leading many observers to characterize the legislature as a rubber stamp institution.

Correa’s vice president and successor Lenín Moreno deserves credit for pulling Ecuador back from the brink and moving it toward a more vibrant political sphere. President Lasso has deepened this trend. On his first day in office, Lasso repealed a controversial 2013 law that granted government agencies a high degree of monitoring and regulatory control over media outlets. Lasso also backed Guadalupe Llori, from Ecuador’s Indigenous party Pachakutik, as the president of the National Assembly. The move was evidence of Lasso’s pragmatism but also his early concern for ensuring that Pachakutik does not present strong opposition to some of his economic reforms.

Below the surface, Ecuador still faces myriad challenges, and Lasso’s success plenty of headwinds. From corruption to rising violence to an economy still reeling from the shock of Covid-19, Lasso’s challenges are variegated. Correa’s apostles remain numerous and eager to criticize Lasso should his administration fail. The Biden-Harris administration should look to build on and accelerate Ecuador’s positive trends.

Golden Opportunities

In the immediate term, the United States should support Lasso’s push for trade integration and liberalization. In late 2020, both countries signed a phase-one trade agreement to simplify customs and reduce regulations and tariffs. The agreement was intended to serve as a stepping-stone to reset trade talks between the two countries after almost 20 years of stagnation.

For his part, Lasso has repeatedly claimed that a trade agreement with the United States is essential to boost Ecuador’s economy and increase its flagging labor sector participation rate, leaving little doubt as to the strength of his commitment to further talks. A natural starting point for these conversations could be Ecuador’s troubled yet crucial oil industry, which after a series of infrastructure failures in 2020 is desperately in need of foreign investment to make needed repairs and meet production targets. Other industries deserving focus include food and agriculture, where Ecuador’s exports of shrimp, bananas, and fish are valued at over $8.5 billion, but have been challenged by pandemic-related shifts in global demand. To signal its seriousness, Ecuador will have to display some flexibility in dropping its non-automatic agricultural licenses, a sticking point in past negotiations. The new U.S. Trade Representative, Katherine Tai, should take President Lasso’s statements earnestly and seek to make concrete progress toward a free trade agreement when the two countries meet to assess the phase-one agreement later this year.

The recent confirmation of Brian A. Nichols as assistant secretary for Western Hemisphere affairs will help anchor the U.S. State Department’s policy toward the region. Members of Congress should also consider the creation of an Ecuador Caucus. The establishment of such a group would bring greater attention to the country and its positive democratic trends, while also creating a mechanism for oversight of U.S. policy on Ecuador. This move would also recognize the importance of the Ecuadorian-American community, which numbers more than 700,000 in the United States and represents a significant force for political and economic engagement with Ecuador.

Finally, the United States and Ecuador can pursue a significant reset when it comes to humanitarian assistance projects. The U.S. Agency for International Development (USAID) field office in Ecuador shut down in 2014 after President Correa refused to renew the agency’s contracts in the country. In 2019, collaboration resumed with the signing of a Memorandum of Understanding between USAID and President Moreno. USAID and Ecuador can make up for lost time by working toward common goals like ecological preservation in the Amazon and sustainable fishing practices. Ecuador in 2018 also joined the Open Government Partnership (OGP), a USAID-led initiative aimed at strengthening civil society in member states. OGP could prove a useful forum for the United States to support and monitor Ecuador’s efforts to clamp down on corruption and consolidate democratic institutions.

Closer cooperation on humanitarian assistance would not be merely symbolic either. Ecuador currently hosts more than 400,000 Venezuelan refugees—a number that will likely grow, as the Maduro regime is firmly entrenched in Venezuela. USAID could also bolster Ecuador’s pandemic response, by offering both technical assistance and direct aid in the form of vaccines and personal protective equipment. U.S. vaccine diplomacy could be especially sensitive geopolitically as China continues to make vaccine supplies a major prong of its outreach to Latin America, while Lasso has discussed the potential to build a Sputnik vaccine plant in Ecuador with Russian president Vladimir Putin.

Continued Challenges

While there are several short- and medium-term steps the United States can take to support Ecuador and encourage Lasso’s agenda, Ecuador continues to face a varied set of issues that threaten to undermine these positive trends. Years of anti-U.S. orientation under Correa provided ample time for Chinese and Russian investment in the country, establishing deep economic ties.

In particular, China has been an active lender to Ecuador across various administrations, especially in the telecommunications sector. At the end of the Trump administration, the United States offered $3.5 billion in debt relief in exchange for Ecuador joining the Clean Network, a multinational initiative to curb the potency of Chinese telecommunications companies. Ecuador’s willingness to join the Clean Network speaks to the value it places on its ties with the United States, as well as an increasing wariness about China’s approach to investment in the hemisphere. The Biden-Harris administration should not treat the Clean Network initiative as if it were a relic of its predecessor. Without action on debt relief in exchange for Western alternatives in the telecommunications sector, Ecuador may find its only option is to turn back to Beijing for additional credit.

Deeply intertwined with questions of economic cooperation is the role of Indigenous and environmental groups in Ecuador’s domestic politics. Under Correa, Moreno, and Lasso alike, these groups have challenged the expansion of trade agreements and foreign investment in Ecuador—and sometimes for good reason. Indigenous communities have seen their lands polluted by oil spills, and they have been forcibly displaced by extractive industries. Nevertheless, Ecuador’s substantial gold and copper deposits will become increasingly vital for the green energy infrastructure of the future. Rather than rejecting future mining and oil projects wholesale, efforts to utilize Ecuador’s natural resources will pay dividends to all parties involved if extracted in a sustainable and sensible way.

While Lasso has sought to cooperate with Pachakutik so far, as his push for trade ramps up, it is liable to face increasing opposition. Given his party’s small size in the National Assembly, Lasso can ill afford to lose allies if he wants to avoid a governance crisis. However, this is all the more reason for the United States to engage deeply with Ecuador on trade issues, incorporating environmental and labor standards into any agreement. The Biden administration’s focus on sustainability contrasts with China and Russia’s diminution in the environmental costs posed by extractive industries.

Ecuador’s prospects are also imperiled by a deteriorating security situation. The country has historically served as a comparatively low-risk embarkation point for drug trafficking. Colombia’s National Liberation Army (ELN) and dissidents of the Revolutionary Armed Forces of Colombia have sought refuge in Ecuador. The country has been a target of interest for Colombian guerrillas since President Moreno helped mediate talks between the ELN and Colombian government. This gave the guerrillas an opportunity to expand their influence, especially along porous border areas in Ecuador’s north.

Beyond the drug trade, illegal mining constitutes a major source of income for guerrillas and organized crime outfits. Further exacerbating security challenges in major urban areas, such as Quito and Guayaquil, is the arrival and expansion of Mexican cartels into Ecuador. This has contributed to an uptick in violence, while competition between gangs as a whole has fueled a series of grisly prison riots since the start of 2021. A failure to contain, and eventually reverse, rising levels of violence may compromise the Lasso government’s legitimacy in the eyes of the Ecuadorian people. Meanwhile, the transnational nature of many of the country’s criminal groups means that any destabilization in Ecuador is liable to reverberate throughout the region.

Fortunately, there is good reason to believe the United States can forge an effective security partnership with Ecuador. The two countries have worked together to clamp down on illegal, unreported, and unregulated (IUU) fishing in recent years, with the United States providing technical assistance and training to Ecuadorian prosecutors. A natural next step would be for joint coast guard and naval operations, something Lasso’s administration is likely to welcome, especially amid growing concerns of Chinese fishing vessels entering sensitive territorial waters around the Galápagos Islands. Cooperation on tackling IUU fishing could be a jumping-off point for other kinds of technical security assistance to help Ecuador’s armed forces address the complex criminal threat environment throughout the region.

While Ecuador’s challenges should not be understated, President Lasso’s success in the first 100 days augurs well for the country. The United States ought to engage with the Lasso administration before the opportunity passes.    

Daniel F. Runde is senior vice president, director of the Project on Prosperity and Development, and holds the William A. Schreyer Chair in Global Analysis at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Ryan C. Berg is senior fellow with the CSIS Americas Program.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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