The SIFA aims to promote sustainable development in Ecuador by making it easier for EU companies to invest and expand their operations in the country, in sectors such as renewable energy, digitalisation, agriculture, transport and logistics. 

The agreement will increase the transparency of the regulatory framework, simplify authorisation procedures and cut red tape, as well as improve dialogue with investors and stakeholders, whilst also ensuring that high labour and environmental standards are upheld. 

The negotiations for a SIFA with Ecuador are part of the EU’s broader efforts to strengthen its ties with Latin American countries and will support and complement the EU’s efforts in the region under the Global Gateway. 

Although legally distinct, the SIFA will complement the EU-Andean Community Multiparty Trade Agreement, creating an even stronger partnership. Building on the trade agreement, the SIFA will further improve the regulatory and administrative environment, fostering further investment, economic growth, job creation, and sustainable development. The SIFA aligns with the EU’s objective of forging stronger, fairer, and more sustainable economic ties with developing partner countries.

Background 

The EU is Ecuador’s largest trade and investment partner, with EU foreign direct investment (FDI) stock reaching over €8 billion in 2023, up from €7.1 billion in 2022, in sectors such as construction, business services, transport, storage and communications, and manufacturing. Ecuador is the first Latin American country to negotiate a SIFA with the EU. 

SIFAs are designed to help enhance the investment climate of a partnering country of the EU by supporting transparency, good governance, reducing bureaucratic obstacles, and promoting responsible and sustainable business practices. These agreements contribute to the objectives of the European Commission’s Competition Compass of 29 January 2025, which called for new ways of deepening partnerships and creating benefits for businesses.Â