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Anti-China sentiment could sink a free trade deal with Ecuador

World Politics Review - 30 January 2024

Anti-China sentiment could sink a free trade deal with Ecuador
By Julie Radomski

The Ecuador-China Free Trade Agreement has often been portrayed as a milestone for China in Latin America, particularly amid perceptions of diminishing U.S. influence in the region. When the agreement was signed by former President Guillermo Lasso’s administration in May 2023, it was heralded as cementing China’s robust presence in the Western Hemisphere, while also putting Ecuador “on Asia’s map.” The agreement grants preferential access to 99 percent of Ecuador’s current exports to China, including shrimp and agricultural products such as bananas and dragonfruit. In return, approximately 4,600 types of Chinese products, including seeds, medications and electronics, will be able to enter Ecuador tariff-free. However, recent developments have thrown the fate of the FTA into doubt.

Before it can enter into effect, the deal must first be ratified by Ecuador’s National Assembly, the nation’s legislative body. This process was substantially delayed when Lasso dissolved the assembly and called snap elections mere days after the FTA with China was signed. Earlier this month, when the agreement was finally introduced into the new legislative session for debate, it encountered unanticipated levels of resistance. For over four hours during the debate on Jan. 11, hostile legislators across disparate political parties denounced the FTA as undemocratic and a threat to Ecuador’s environment, its small and medium enterprises, and even its sovereignty. As it became clear that ratification of the agreement was not guaranteed, the debate was suspended indefinitely.

The uncertainty surrounding the future of the FTA has implications that extend beyond Ecuador’s borders, affecting the broader landscape of China’s relations across Latin America. The domestic debate in Ecuador reflects the burgeoning anti-China sentiment within Latin American countries, challenging the narrative of China’s uncontested ascent in the region. Moreover, the real possibility that the FTA will be rejected underscores the agency of Latin American actors in navigating their relationships with China against the backdrop of great power competition between Beijing and Washington. Rather than passively accepting China’s terms, resistance from a range of stakeholders in Ecuador points to the willingness of Latin American actors to assert their interests. This dynamic reflects the pivotal importance of domestic politics in shaping the terms of engagement with China.

The brewing opposition to the Ecuador-China FTA can be traced back to the lack of transparency and public engagement in the negotiation process in 2022. Critics point out that the agreement was brokered behind closed doors, with minimal transparency or opportunities for civil society input. Observers were given a mere 10 days to comment on the 700-page document, after which it was ratified by the Constitutional Court in November 2023. This opacity fueled suspicions regarding the deal’s content, especially as it was negotiated by the exceedingly unpopular Lasso administration. Indeed, in the legislative debate earlier this month, politicians associated with the Citizen’s Revolution and Pachakutik parties—both of which squared off with Lasso—appeared loath to endorse any major initiative of the previous administration.

The most significant substantive objection to the FTA centers around environmental anxieties. Legislators and environmental advocates argue that the agreement would harm Ecuador’s “megadiverse” ecosystems. The country is home to unique Amazonian and Andean biomes as well as the Galapagos Islands. According to Diana Castro, a researcher at the China-focused NGO Latinoamerica Sustentable, or Sustainable Latin America, the FTA could spur additional investment in extractive industries and monocultures for export, leading to Amazonian deforestation and other alarming environmental impacts. For example, demand for balsa wood by China’s wind turbine industry has already contributed to deforestation in Amazonian conservation zones. “Ecuador is not prepared for these scenarios with an environmental and social regulatory framework,” said Castro.

As the legislative debate unfolded, civil society opposition led primarily by environmental groups gained popular traction. An open letter urging rejection of the FTA has been signed by over 100 Ecuadorian and international organizations. Across social media, citizens articulated their concerns regarding the perceived repercussions of the FTA and Ecuador’s asymmetric relationship with China, particularly with regard to the potential influx of plastic waste and low-quality products as a result of the FTA. A widely shared video parodied Ecuadorian elites promoting the FTA, portraying it instead as a deal in which Ecuador turns over its natural resources in exchange for Chinese “junk.” Civil society opposition is circulating on social media using the hashtag #EcuadorNoEsBasureroDeChina, or Ecuador is not China’s trashcan.

“The domestic debate over the FTA in Ecuador reflects the burgeoning anti-China sentiment within Latin American countries, challenging the narrative of China’s uncontested ascent in the region.”

These concerns center around imports under the FTA of “plastic waste, parings, and scrap,” as well as in the popular perception of Chinese products as generally low-quality and disposable. But the “trashcan” metaphor also reflects broader popular discontent in Ecuador with regard to China’s economic footprint in the country, especially in light of highly contentious projects such as the open-pit Mirador mega-mine and the scandal-plagued Coca Codo Sinclair hydroelectric project. Environmental groups and legislators alike noted that environmental destruction would outweigh the promised economic gains from the FTA and undermine Ecuador’s long-term prosperity.

The debate in Ecuador over the FTA also includes issues of sovereignty and resilience. Concerns about becoming economically dependent on China, with the potential for exploitation and undue influence, fuel hostility to the FTA. Opponents in the National Assembly also expressed apprehensions regarding adverse effects the deal could have on small and medium enterprises in Ecuador, contending that competition from cheaper Chinese products could wipe out domestic small businesses. During the assembly debate, one legislator described Ecuador as having been “invaded” by Chinese products. Several others expressed their support for the idea of an FTA, but insisted that the terms of the current agreement needed to be renegotiated.

Meanwhile, the agreement’s supporters claim that these criticisms are politically motivated by a blanket rejection of the Lasso administration. They also dispute that the agreement will open the door for China to export waste or “trash,” as argued by environmentalists. Julio Jose Prado, a former Cabinet member of the Lasso administration who led the negotiations for the FTA, called the “China’s trashcan” narrative patently false, while also pointing out that key Ecuadorian sectors like textiles and footwear were protected by exclusions in the agreement.

As the fate of the China-Ecuador FTA hangs in the balance, the ongoing legislative negotiations and public debate over China’s role in the country resonate throughout Latin America. And while U.S. observers have repeatedly described the deal as evidence of China’s grip on the region, there is a real possibility that it will be scrapped as a result of Ecuador’s democratic process. That serves as a timely reminder that the countries of Latin America—and of the Global South more broadly—are not mere pawns in a bipolar competition or “New Cold War,” but rather participants who are actively contesting and at times resisting the terms of their relationships with the great powers.

 source: World Politics Review