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The Ecuadorian government has declared that it will significantly raise tariffs on imports from Colombia, increasing the rate from 30 percent to 50 percent starting March 1.
The decision, announced on Thursday, represents a major escalation in the intensifying trade and security dispute between the two neighbouring Andean countries.
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Ecuador’s right-wing president, Daniel Noboa, has been pressuring his left-wing counterpart in Colombia, Gustavo Petro, to crack down on border security.
Since the start of the COVID-19 pandemic in 2020, Ecuador has seen a surge in violence linked to the expansion of organised crime in the country.
Noboa, echoing President Donald Trump in the United States, has blamed Petro for not acting aggressively enough to combat narcotics trafficking. Colombia has, for many years, been the world’s largest source of cocaine.
And like Trump, Noboa has increasingly relied on tariffs against Colombia to force adherence to Ecuador’s national security strategy.
His government has accused Petro’s of failing to cooperate with border security measures. The two countries both sit on the Pacific coast, and they share a land border that stretches roughly 586 kilometres, or 364 miles.
Questions about electricity
Thursday’s announcement follows an initial 30 percent tariff imposed by Quito in early February.
Ecuadorian officials have also justified the protectionist measures by citing a growing trade deficit.
According to the Observatory of Economic Complexity, a data analysis firm, nearly 4 percent of Colombian exports go to Ecuador, worth roughly $2.13bn. Ecuador imports significant quantities of medicines and pesticides from Colombia.
Fewer exports go from Ecuador to Colombia, though. Roughly 2.3 percent of Ecuador’s exports abroad go across the shared border, amounting to a value of $863m.
Ecuador’s trade deficit with Colombia sits at roughly $1.03bn through 2025, according to government data, excluding oil.
But in spite of the anticipated tariff hike, it is unclear whether Ecuador will apply the new tariffs to Colombian electricity — a critical resource for the country.
In a retaliatory move following the initial tariffs, Colombia suspended all energy sales to its neighbour.
That suspension risks fuelling tensions in Ecuador against Noboa’s government. Recent droughts have created disruptions to Ecuador’s hydroelectric dams, which provide nearly 70 percent of the country’s power.
Those disruptions have caused widespread power outages in recent years, which in turn have prompted antigovernment protests. In the past, Noboa has responded by buying electricity from Colombia.
Pipeline standoff
The transportation of fossil fuels has also become a flashpoint between Ecuador and Colombia in the aftermath of February’s tariffs.
Noboa’s government has hiked fees for Colombian crude delivered through the Trans-Ecuadorian System Oil Pipeline (SOTE) by 900 percent.
That raises the cost to approximately $30 per barrel. Colombia has responded by halting all oil shipments through the line.
Despite high-level diplomatic efforts, tensions between the neighbouring countries remain at an impasse.
Officials representing foreign policy and security held a meeting this month in Ecuador, but the gathering concluded without a breakthrough.
In announcing the latest tariff hike, Ecuador’s Ministry of Production and Foreign Trade levelled criticism at Colombia for failing to implement “concrete and effective” measures to curb drug trafficking along the border.
Once considered a bastion of stability, Ecuador has seen a spike in homicide and other violent crimes.
According to the Geneva-based Organized Crime Observatory, the Andean nation recorded a homicide rate of approximately one murder every hour last year.
