The National Assembly of Ecuador has ratified a trade agreement with China, making it the fourth Latin American country to establish a free trade agreement with the Asian nation, following Chile, Peru, and Costa Rica. The agreement was approved by the Assembly with 76 votes in favor, 23 against, and 35 abstentions after a three-hour session.
The trade agreement, ratified on February 7, 2024, offers significant growth opportunities for Ecuador's primary export products. Despite a slight decrease in value compared to 2022, China remains the second-largest destination for Ecuadorian products, after the United States. The trade agreement's tariff reductions will lower export costs and provide growth opportunities in the Chinese market.
According to the Economic Commission for Latin America and the Caribbean (ECLAC), Ecuador's exports to China could increase by around 7% in the short term with the trade agreement. If other non-tariff measures are reduced for Ecuadorian products, the increase could reach 30%.
In addition to traditional products such as bananas, the trade agreement will encourage the diversification of exports to China. Non-traditional products, including dragon fruit, blueberries, and quinoa, will enter China tariff-free once the agreement takes effect.
Ecuadorian bananas, currently subject to a 10% tariff in China, will be tariff-free ten years after the agreement's implementation. In 2023, Ecuador exported 15.2 million boxes of bananas to China, a 45% increase from the previous year. With the trade agreement, banana shipments could triple or quadruple in the first three years, according to Richard Salazar, director of Acorbanec.
Source: www.ecuadortimes.net