This unbalanced conversion was extremely favorable to flower agribusiness men who

paid worker salaries, utilities, and other services in inexpensive sucres, but obtained high

valued dollars from exporting their product. But this advantage was turned into a

disadvantage when Ecuador decided to use dollars in national business contexts.

 The advantages that flower agribusiness enjoyed fueled a great development of this

industry in Ecuador, which is now one of the four major world flower producers. But

despite the economic boom of flower agribusiness, it is a very sensitive industry and has

to face some drawbacks that could threaten its entire economic structure.

 The most critical threat that the flower industry must face is the end of the trade

preferences under the ATPA, which could produce a contraction of the US market for the

Ecuadorian roses that comprise 70% of total production. In the round of negotiations

toward the free trade agreement that Ecuador has been discussing with the United States

during 2004, some flower agribusinesses have raised concerns regarding the economic

sustainability of the flower industry. The main issue that could constrain flower

production is the expiration of the duty-free status in the United States on products

imported from Ecuador and other Andean countries, which was scheduled for December

2001, but delayed due to a renewal approved in 2002. This renewal will last until 2005.5

If the duty-free status expires, it could result in disadvantageous trade conditions, not

only for flowers but also for a whole range of commodities exported by Ecuador to the

United States, including bananas, oil, minerals, and coffee. These concerns arose during

the fourth round of negotiations toward the Free Trade Agreement between the United

States and the Andean countries held in Puerto Rico during the second week of


5 The consensus to obtain a renewal of the ATPA in the US Congress was hard to reach due to debates on
the damages caused by no tariff in local flower industry.