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Ecuador is 4th Latin American country to sign China trade deal

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La Prensa Latina | 11 May 2023

Ecuador is 4th Latin American country to sign China trade deal

Quito, May 10 (EFE).- Ecuador became the fourth Latin American country Wednesday to sign a trade agreement with China, which since last year displaced the United States as its main non-oil trading partner.

After a negotiation of 10 months, the country joined Chile, Peru and Costa Rica, the other three nations that already had a free trade agreement with Beijing.

With this agreement, Ecuador hopes to catapult trade with China after bilateral trade between the two countries increased in recent years to reach $12.29 billion in 2022.

While Ecuadorian exports to China reached $ 5.84 billion in 2022, Chinese sales to Ecuador amounted to $ 6.45 billion.

The document was signed by Ecuadorian Trade Minister Julio Jose Prado and Chinese Commerce Minister Wang Wentao, in a ceremony held simultaneously in Quito and in Beijing via video call.

“This is the most important trade agreement in Ecuador and it will change the way it is produced in Ecuador,” Prado said, speaking of the “record time” of the negotiation.

The Ecuadorian minister said the agreement is limited only to the trade of goods and does not contemplate investments or services.

The treaty will immediately free 50 percent of Ecuador’s exportable supply from tariffs for entry into China, which will reach 99.6 percent over the course of 10 years, since there will be gradual reductions in other products.

Among the products that Ecuador exports, tuna and sardines will have immediate tax relief for entering the Chinese market, while roses and cocoa will reach that range in five years, and shrimp and bananas within 10 years.

The agreement excludes 828 Ecuadorian products that have been classified as highly sensitive to protect manufacturing, agricultural and even some industrial sectors, in items such as flat ceramics, wooden boards, some textiles and iron wire.

Without having any type of trade agreement, Ecuadorian non-oil exports to China have quadrupled in the last five years, going from $ 1.06 billion in 2018 to $ 5.73 million in 2022, with payments for tariffs that reached $ 140 million.

The Ecuadorian Federation of Exporters estimated that, with the current trade agreement, Ecuadorian non-oil exports to China would grow by $ 900 million in the short term.

There are more than 11,000 Ecuadorian companies that maintain commercial relations with China, of which about 600 are exporters.

 source: La Prensa Latina