Ecuador rushes free trade agreement with China amid buoyant trade relationship

The negotiation of a free trade agreement (FTA) between China and Ecuador comes precisely when non-oil, non-mining exports to the Asian country register a significant rebound. In the first quarter of the year, Ecuadorian sales to China grew 100%, according to information provided by Fedexpor.

National shipments totaled US$1.8 billion to China, almost 50% of what was sold in total in 2021. Of this amount, US$1.6 billion corresponds to shrimp, followed by US$55 million in bananas and US$49 million in timber and manufactured goods, among others.

Despite the fact that the trade balance continues to be in deficit, Ecuador bought more from China than it sold to it. Imports in this period totaled US$2.5 billion, US$739 million more than exports.

But the most relevant fact is that China is currently the main destination for Ecuador’s non-oil sales, with a 23% share, surpassing even the United States (22%), which has historically been the largest buyer. These markets are followed by the European Union (20%) and Russia (-7%).

NEGOTIATIONS BEGIN

Hence, the Ecuadorian government’s interest in advancing an FTA with the Asian nation is increasing. The Ministry of Production informed this Tuesday that it has already started the first round of negotiations that will occur virtually from July 18 to 28.

The Ministry pointed out that in this phase, there will be an exchange of bilateral proposals for the texts of the chapters to be included in the treaty “and the positions in several negotiation disciplines, as well as the resolution of doubts regarding the proposals presented”.

On the first day, the Market Access and Legal Provisions roundtables met, while yesterday, the Investment Cooperation roundtable was set up, and today the Customs Procedures and Trade Facilitation and Rules of Origin roundtable are scheduled to be convened.

The Sanitary and Phytosanitary Measures and Economic Cooperation, Technical Barriers to Trade and Trade Defense, and Electronic Commerce and Dispute Settlement roundtables will meet from July 25 to 27. The round will conclude on Thursday, July 28, with the negotiation of the Competition Chapter.

In addition, the second round of negotiations is expected to take place in August and a third in September, by which time progress is expected on the texts of the chapters of the trade agreement between the two countries.

In 2021, Ecuadorian non-oil exports to China reached US$3.6 billion, being the second largest non-oil export destination for Ecuador.

Regarding imports, the three main products that the country bought abroad are machinery and mechanical appliances, vehicles and their parts, and electrical machinery and appliances, all from China, with amounts of US$1.2 billion, US$988 million, and US$815 million, respectively.

With information from Bloomberg

More: Brazil news in English, every day from The Rio Times.