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Updated May 2, 2023
Ecuador: An Overview
Ecuador is a small, ethnically and geographically diverse
Fig. 1. Ecuador at a Glance
country of 18 million inhabitants located in South America
between Colombia and Peru, the world’s two largest
cocaine-producing countries (see map, Fig. 1). President
Guillermo Lasso of the conservative Creating Opportunities
(CREO) party took office for a four-year term in May 2021.
He has sought to build on the accomplishments of his
predecessor, President Lenin Moreno (2017-2021), who
enacted liberal political and economic reforms and pursued
closer ties with the United States. Lasso faces some
resistance, including from the country’s powerful
Indigenous leadership and a divided legislature. Issues of
interest to Congress include U.S. trade and investment ties
with Ecuador, counternarcotics and environmental
cooperation, and Ecuador’s relations with China.
Political and Economic Background
During a decade in power (2007-2017), leftist populist
Sources: CRS, International Monetary Fund (IMF); Ecuador’s National
President Rafael Correa—Moreno’s predecessor—brought
Institute of Statistics and Censuses (NISC); Trade Data Monitor (TDM).
some stability to Ecuador’s previously tumultuous political
The harsh impact of the pandemic and a crash in global oil
scene. He presided over a public investment-driven
prices drove Ecuador into a deep recession in 2020, when
economic expansion, with growth averaging 5% annually
the economy contracted by nearly 8% and the poverty rate
between 2010 and 2014. Correa used that economic growth
climbed to an estimated 33%. The economy began to
to increase social expenditures and reduce poverty;
recover in 2021, with 4.2% growth, followed by an
however, his policies left Ecuador with significant debt to
estimated 3% growth in 2022, driven in part by rising oil
China and more dependent on petroleum. Correa also
prices. The International Monetary Fund (IMF) projects
governed in an increasingly authoritarian manner, limiting
2.9% growth for 2023. Fiscal stability has improved under
civic freedoms and restricting judicial independence.
Lasso, following efforts to reduce public spending and
Moreno, of Correa’s Alianza País (AP) party, was elected
improve tax collection. In December 2022, Ecuador
president in 2017. Although he had served as one of
concluded for the first time in two decades a $6.5 billion
Correa’s vice presidents, President Moreno quickly
extended fund facility agreement with the IMF.
distanced himself from Correa in style and substance. His
Lasso, however, has struggled to move some aspects of his
efforts to reduce corruption and liberalize trade led to
pro-business and fiscal stabilization agenda through the
backlash from his AP party and some sectors of Ecuadorian
divided National Assembly. The 24-seat pro-government
society. The fallout of the Coronavirus Disease 2019
voting bloc, consisting of CREO and some independent
(COVID-19) pandemic further eroded Moreno’s popularity.
legislators, has struggled to overcome opposition from the
47-seat Unity for Hope (UNES) coalition linked to former
In April 2021, Lasso defeated Andrés Arauz, a loyalist of
President Correa. The Pachakutik party—the political party
former President Correa, in a second-round presidential
of the country’s main Indigenous organization, the
runoff. However, Lasso’s CREO party won only 12 of 137
Confederation of Indigenous Nationalities (CONAIE)—has
seats in the 2021 unicameral National Assembly elections.
at times acted as a swing voting bloc with 27 seats.
Inaugurated in May 2021, Lasso had campaigned on tax
reforms intended to promote growth, import duty reduction,
Rising inflation and government-imposed fuel price
and eliminate a 2% income tax for small- and medium-
increases prompted nearly three weeks of protests (led by
sized businesses. He also promised to double oil production
CONAIE) in June 2022. The protests, at times violent,
and mining concessions. Lasso enjoyed widespread popular
propelled the UNES coalition to attempt, unsuccessfully, to
approval in his first 100 days in office for achieving a
impeach Lasso in mid-2022. The protests ended when the
notable increase in COVID-19 vaccination rates. Ecuador
Lasso government withdrew fuel price increases and
suffered one of the most severe outbreaks regionally but
suspended new oil and resource extraction projects in
attained a full vaccination rate of nearly 80% by August
Indigenous territories, among other guarantees. In March
2022, up from 4% in mid-2021. Ecuador continues to
2023, some protesters returned to the streets and among
contend with destabilizing consequences of the COVID-19
their concerns was a lack of government progress on the
pandemic, which resulted in 36,000 deaths and a mortality
post-June 2022 commitments agreed to by the government.
rate of 204 deaths per 100,000, as of May 2023.
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Ecuador: An Overview
The National Assembly is expected to vote in mid-May
signed on December 23, 2022. The resulting United States-
2023 on holding a new impeachment trial of Lasso for
Ecuador Partnership Act of 2022 includes measures for
corruption charges. Most parties, including former allies to
strengthening democratic governance, security cooperation,
the right of Lasso’s own party, potentially will vote to
and economic and commercial ties between the two
impeach. The affirmative votes of two-thirds of the
countries. At a White House meeting between Presidents
Assembly (92 of 137 legislators) would be required to
Biden and Lasso in December 2022, both leaders
impeach the president. The President has threatened to
highlighted Ecuador’s participation in the Americas
disband congress using a constitutional option that would
Partnership for Economic Prosperity initiative, intended to
trigger new general elections if he were impeached. Some
increase regional competitiveness, strengthen supply
analysts warn rising political uncertainty could further
chains, promote inclusive growth, and revitalize regional
erode investment and weaken Ecuador’s economy.
economic institutions.
Ecuador has seen a sharp rise in violence in the past three
The Biden Administration’s FY2024 congressional budget
years, a development the government attributes mainly to
justification proposed $45.7 million in bilateral foreign
illicit drug trafficking and organized crime. Homicide rates
assistance for Ecuador, with the largest portion for
rose sharply to nearly 26 per 100,000 in 2022 (see Fig. 2),
Development Assistance ($27 million), followed by $13.3
the highest rate since records were made public in the
million for International Narcotics Control and Law
1980s. Several high-fatality prison riots have prompted the
Enforcement programs. The United States donated 2
government to announce reforms to address poor conditions
million doses of COVID-19 vaccine in July 2021, and the
and gang rivalries in prisons. In August 2022, an explosion
U.S. Agency for International Development (USAID) has
in Guayaquil, Ecuador’s largest city, killed five and injured
provided close to $52 million to support Ecuador’s
more than two dozen people in what Ecuadorian authorities
pandemic response since FY2020. From 2017 through
labeled a terrorist incident. Since Lasso’s inauguration, his
September 2023, according to USAID, the United States
government has declared states of exception (states of
will have provided $240 million in assistance to help
emergency) to quell violence or restore stability in dozens
Ecuador address the needs of 500,000 Venezuelan migrants
of provinces. As of early May 2023, several remain in
and refugees, and their host communities.
place, including in Guayaquil. In late April 2023, the Lasso
government declared some Ecuadorian gangs to be
According to the Central Bank of Ecuador, U.S.-Ecuador
terrorists, allowing further military support for law
trade in 2022 totaled $16 billion and the United States
enforcement efforts.
remains Ecuador’s largest trade partner. However, for the
first time in 2022, China exceeded the United States in non-
Fig. 2. Ecuador Homicide Rate 2014 to 2022
oil trade. The top U.S. import from Ecuador is petroleum,
followed by seafood, including shellfish, and fruits,
including bananas. Ecuador’s top imports from the United
States are refined petroleum and machinery. The Lasso
government hopes to increase bilateral trade and investment
with the United States, building on a first-phase limited
trade agreement signed in 2020, and to eventually sign a
U.S.-Ecuador free trade agreement. In 2022, Ecuador began
the process of becoming a full member of the Pacific
Alliance, a regional trade bloc, and applied to join the
Comprehensive and Progressive Agreement for the Trans-
Sources: Data from InSight Crime’s “Homicide Round-up” (2014-
Pacific Partnership. Ecuador announced free trade
2022). Figure by CRS.
agreement negotiations with China in 2022 that concluded
U.S.-Ecuador Relations
in 2023, which the Lasso government anticipates will be
ratified this year. China’s economic engagement with
Although the United States traditionally had close relations
Ecuador has raised concern among some Members of
with Ecuador, former President Correa’s populist style and
Congress.
self-styled “anti-imperialist” policies increased friction.
Among other actions, Correa shut down U.S. counterdrug
Members of Congress have expressed various views on
operations at Manta Air Force Base in 2009 and expelled
aspects of the U.S.-Ecuador relationship. These include
the U.S. ambassador in 2011. Closer bilateral relations
support for a free-trade agreement and concerns about
resumed under President Moreno and have continued under
policing, security (including maritime security), human
President Lasso. Lasso has expressed interest in
rights, and crime, such as illicit drug flows and illegal
strengthening security and economic ties with the United
mining. Some Members have noted with concern Ecuador’s
States. In June 2022, he announced a “Plan Ecuador” to
increasing role in irregular migration. According to U.S.
advance cooperation in the fight against drug trafficking.
government data, Ecuadorians were the fourth-largest
nationality in U.S. Customs and Border Protection custody
In April 2022, the Senate Foreign Relations Committee
as of January 2023.
reported a bill, S. 3591, to advance U.S.-Ecuadorian
relations (a related bill, H.R. 8711, was introduced in the
June S. Beittel, Analyst in Latin American Affairs
House in August 2022). The bill was enacted in Title LV of
the James M. Inhofe National Defense Authorization Act
IF11218
for Fiscal Year 2023 (P.L. 117-263), which President Biden
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Ecuador: An Overview
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https://crsreports.congress.gov | IF11218 · VERSION 10 · UPDATED