The trade agreement that Ecuador signed with China on May 11 is historic.
It is historic because of the economic impact it will have and because it will surpass what has been achieved so far with other markets such as Europe.
China has become the country’s most important trading partner, surpassing the United States, with 27% of non-oil exports destined for this market.
Moreover, the deficit in the binational trade balance has been gradually reduced.
Between 2018 and 2021, the lead of imports from China ranged from US$623 million to US$3.104 billion.
In 2022, this difference narrowed to US$525 million due to higher growth in sales.
China is the main supplier of raw materials and capital goods needed to mechanize domestic production.
This is one of the advantages highlighted by the Ecuadorian Exporters Association.
And the figures confirm this.
Imports of production inputs such as raw materials and capital goods account for 77% of non-oil imports from this country.
In other words, they amounted to US$4.822 billion in 2022.
Although the tariff reductions do not apply immediately to all products, they allow for future planning to increase sales under better conditions.
Ecuador pays US$140 million in tariffs annually for its export goods to enter China.
The most affected are bananas, roses, traditional fruits, fish and flour, leather products, and shrimp.
This agreement is also historic from a geopolitical point of view.
It represents another step toward China’s regional consolidation while a trade agreement with the United States is still underway.
News Ecuador, English news Ecuador, Ecuadorian economy
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