The breakup occurred after former Ecuadorian vice president Jorge Glas, a refugee in the Mexican embassy in Quito with political asylum, was arrested on Friday night and sentenced to prison for corruption.

Ecuador entered an impasse in its negotiations to conclude a Free Trade Agreement with Mexico and in its entry into the Pacific Alliance (PA), a bloc made up of Mexico, Colombia, Chile, Peru and Singapore.

In practice, Ecuador will not be able to close any of these negotiations after breaking diplomatic relations with Mexico this Friday.

The breakup occurred after former Ecuadorian vice president Jorge Glas, a refugee in the Mexican embassy in Quito with political asylum, was arrested on Friday night and sentenced to prison for corruption. The president of Mexico, Andrés Manuel López Obrador, described the event as a violation of international law.

These events occurred while Ecuador has managed in recent years to join the Pacific Alliance as a full member, which implies a broader opening to only trade.

At the end of 2021, the then government of Ecuador was already preparing to close negotiations for an FTA with Mexico for next December and was planning its entry as a full member of the Pacific Alliance for the first half of 2022. But from then until today, this objective has stumbled, either due to imbalances in the negotiation or political tensions.

For Ecuador to enter the Pacific Alliance, it must have an FTA with Mexico, among other requirements.

In 2023, exports from Mexico to the Ecuadorian market were US$596 million, a year-on-year decrease of 9.4%; while sales from Ecuador to the Mexican market totaled US$228 million, an increase of 2.2%.

The main sale from Mexico to Ecuador in 2023 was in the category of Medicines Consisting of Mixed or Unmixed Products, Preparations for Therapeutic or Prophylactic Uses (US$ 68.2 million), at the same time as the largest purchase from Mexico to Ecuador was Cocoa Beans, Whole or Cracked, Raw or Roasted (US$ 60.8 million).

From January 1999 to December 2023, Mexico has received a total of US$120 million in FDI from Ecuador.

In air connectivity, to date only Aeroméxico has a route from AICM to Quito, with four frequencies a week.

On the other hand, the government of former Ecuadorian president Guillermo Lasso had advocated an FTA between the United States and Ecuador, based on a limited first-phase trade agreement from 2020.

The Biden Administration has not expressed support for an FTA, but has welcomed Ecuador's participation in the Americas Partnership for Economic Prosperity initiative, an effort to foster regional competitiveness and inclusive growth.

Ecuador announced negotiations for an FTA with China in 2022 and signed an agreement in May 2023, although it has not yet been ratified.

Two bills introduced in the 118th US Congress would have Ecuador designated as a beneficiary country under the Caribbean Basin Economic Recovery Act.