Trade will begin operating under the new system after the Ecuadorian Government implemented the so-called “security tax” on Colombian imports.
President Daniel Noboa imposed the measure on January 21 amid accusations of a lack of cooperation from the coffee-growing nation in actions against drug trafficking and illegal mining in the border region.
Colombia denied those accusations and, in response, taxed Ecuadorian products and suspended the sale of electricity to Ecuador, which used that energy to offset its deficit and preserve water resources.
Quito subsequently decided to raise the price of transporting Colombian crude oil through the Trans-Ecuadorian Pipeline System (SOTE), where the tariff increased from three to 30 dollars per barrel.
Business associations in both countries warned that the simultaneous implementation of tariffs would lead to job losses, price increases, and the risk of shortages in two highly integrated economies.
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