Mexico and Ecuador agreed yesterday to start negotiations on expanding their trade agreement, which had been in force for the past decade, in an effort to boost trade and reduce import duties.

Ecuador's Foreign Minister, Joaquin Zevallos, announced that he would visit Mexico in the coming days to officially start as early as July 18, 2006. An extension of the agreement was discussed in May 2006 during an official visit of Ecuadorian President Alfredo Palacio to Mexico.

Ecuador also plans to open trade negotiations with other countries, though talks on an FTA with the United States were suspended in May, after the Ecuadorian government cancelled the contract of U.S. oil company Oxy in Ecuador, for breach of contract.

Trade between Ecuador and Mexico totals US$308 million annually, dominated by Mexican exports to Ecuador, which account for 70% of the bilateral trade. Mexico levies a 6.0% duty on imports from Central America and the Caribbean, but the duty on imports from Ecuador stands at 25%.