Ecuador-South Korea FTA to cut banana tariffs to zero within five years
Ecuador began its shift towards Asia in 2022 to reduce dependence on traditional markets.
ECUADOR – The ratification of a free trade agreement between Ecuador and South Korea marks a milestone for the country’s banana sector, with tariffs on Ecuadorean bananas set to be gradually reduced from 24% to zero over five years.
The agreement, approved on April 14, gives Ecuadorian exporters access to a country that imports approximately 70% of its food.
Ecuador began its shift towards Asia in 2022 to reduce dependence on traditional markets. The Ecuadorean Banana and Plantain Cluster played a key role in the negotiations, demonstrating how industry associations can drive trade policy outcomes.
The impact of tariff reductions has been dramatic. In 2024, when South Korea temporarily reduced tariffs on bananas, Ecuadorian exports surged by 207%. However, when the 30% tariff was reinstated, exports plummeted by 65.89% at the start of 2026. This volatility highlights the direct correlation between tax reductions and export volumes.
Currently, Ecuador ships approximately 3.57 million boxes of bananas, valued at US$49.28 million annually, to South Korea, where it holds an 11% market share, up from 6% in 2021. Under the new agreement, the tariff reduction will close the gap with competitors such as Peru, Colombia, and Vietnam, which already have tariff-free access to the Asian country.
The Ecuadorean Banana Association stated that the banana sector will be among the main beneficiaries, projecting annual revenues of approximately US$100 million from banana exports alone, with additional multiplier effects on employment, investment, and foreign exchange earnings.
As Ecuador secures preferential access to Asian markets, traditional banana suppliers in the Philippines and Central America may face heightened competition.
The deal also shows that strategic trade policy can transform a commodity sector’s profitability, shifting it from tariff-vulnerable to tariff-advantaged.
The agreement is the result of a strategy initiated in 2022, when Ecuador redefined its trade policy, shifting its focus towards Asia. With 98.8% of Ecuadorian exportable goods entering South Korea tariff-free, either immediately or progressively, the deal represents comprehensive trade liberalization.
As global trade competition intensifies, Ecuador’s Asian pivot provides a replicable model for produce-exporting nations across Africa and the Middle East.
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