On October 11, the generalized system of preferences (GSP) granted by Russia as part of the Eurasian Economic Union (UEEA) for a group of Ecuadorian products will expire and, from then on, the tariff paid by Ecuadorian banana to enter that market will increase from the 3.75% it is currently taxed to 4%.
Russia is the second main destination for Ecuadorian bananas, accounting for an average of 22% of exports. According to the Banana Cluster, this percentage has remained stable in recent years, even though it presented slight reductions in 2019 and 2020 due to various logistics and production factors, but also to the decrease in banana imports by Russia. However, in 2020 banana exports to this destination generated some $ 673 million, i.e. $ 31 million more than in 2019.
Ecuador is Russia's leading banana supplier and contributes an average of 97% of the bananas consumed in that country, according to the union.
Thus, Ecuadorian producers consider that the negotiation with Russia should be accelerated in order to reach a trade agreement with the country.
The Russian Ambassador to Ecuador, Vladimir Sprinchan, Ecuador's ambassador to Russia, Juan Holguin, and Ecuador's ambassador to the European Union, Hernan Ponce, were optimistic about strengthening the bilateral dialogue between both nations to promote trade agreements that allow boosting their economies. The three diplomats visited a banana farm owned by the Reybanpac company, in the province of Los Rios, where they were able to observe the treatment of bananas for export.
Vladimir Sprinchan promised to join forces to achieve a trade agreement. However, he stressed that it does not depend only on Russia, but on the EAEU, which is integrated by Russia and other countries, such as Armenia, Kazakhstan, Kyrgyzstan, and Belarus.
According to Ecuador's ambassador to Russia, Juan Holguin, there are two essential conditions to make a trade agreement viable: creating the political conditions for dialogue and a technical aspect. "If there is political will, these technical agreements are much easier to achieve because there is already interest," he said.
He also said President Guillermo Lasso had entrusted him with the priority of working to enhance the aforementioned conditions to achieve a commercial agreement.
Jose Antonio Hidalgo, executive director of the Association of Banana Exporters of Ecuador (AEBE) said that the Ecuadorian Banana Cluster is analyzing traveling to Russia to discuss a trade agreement.