Tratado de Libre Comercio Ecuador – China

Ecuador Signs Free Trade Agreement with China

Ecuador Signs Free Trade Agreement with China

The Ecuador-China Free Trade Agreement is the first trade agreement that Ecuador signs with an Asian country. It was signed virtually and simultaneously on May 10 in Quito and on May 11, 2023 in Beijing, as reported by the Gobierno del Ecuador.

The signing of the Free Trade Agreement “is a sign of mutual trust and the implementation of the consensus reached by the Heads of State, on February 5, 2022, in Beijing, who seek progress and mutual well-being,” stated the government of Ecuador.

The negotiation process involved 4 rounds and several technical meetings held during the months of April through December 2022, virtually.

This Trade Agreement, focused on goods, contemplates a total of 17 disciplines, and is considered state-of-the-art, since it contains a chapter on electronic commerce.

 

 

The Government of Ecuador states that Ecuador is the first Latin American country to include a chapter of this nature in a trade agreement with China.

In terms of goods, the Government of Ecuador cites that trade between the two countries reached around 12,000 million dollars in 2022.

 

China’s market tendencies. Image credit: Gobierno de Ecuador.

 

Exports amounted to 5,823 million dollars, highlighting products such as shrimp, lead and copper concentrate, other mining products, bananas, balsa, wood and its products, cocoa, among others.

Imports were registered for an approximate amount of 6,353 million dollars in products such as: metal manufactures, automobiles, cell phones, computers, machines and their parts, among others.

 

 

Ecuador’s administration states that 77% of imports from China are focused on raw materials, inputs, capital goods and fuels, elements necessary for production.

With the negotiation of the Ecuador-China FTA, “the first benefit is the real access of Ecuador’s current and potential exportable offer in better conditions to a market of 1,400 million consumers with high purchasing power,” stated Ecuador’s president’s office.

 

Cross Border E-Commerce-Gobierno de Ecuador.

 

 

Cross Border E-Commerce-Gobierno de Ecuador.

 

Cross Border E-Commerce-Gobierno de Ecuador.

 

“Indeed, with this negotiation, access was achieved for 99.6% of the current Ecuadorian supply to China in baskets with immediate tax relief or less than 10 years.”

 

 

In addition, this agreement allows Ecuador to equalize competition conditions with neighboring countries (Peru, Central America) that already have an agreement with the Asian country, as well as other Asian countries that compete in that market.

In the case of Ecuador, this instrument will be reviewed and approved by the Constitutional Court and the National Assembly. Once the internal legal formalities are completed in both countries, this Trade Agreement will enter into force.

 

Labels. All imported products must bear a permanent label. Image: Gobierno de Ecuador.

 

China’s Ministry of Commerce

Through the FTA, “China and Ecuador will create a favorable, convenient, transparent and stable environment for the businesses,” according to a statement by China’s Ministry of Commerce (MOFCOM) on Thursday.

China and Ecuador will eliminate tariffs on 90 percent of their products, with about 60 percent to be eliminated immediately after the FTA deal comes into force, published the Global Times.

 

Can My Product Enter China? Webinar: How to do business in China? Commercial Offices of Ecuador in Canton and Beijing. Source: Ministry of Production, Foreign Trade, Investment and Fisheries, Ecuador.

 

Ecuador’s major exports to China will be tariff-free under the FTA. The tariff rate on Ecuador’s bananas, white shrimp, fish, fish oil, flowers and dried flowers, cocoa and coffee will be reduced from current 5-20 percent to zero, according to the Global Times.

Tariffs on China’s exports to Ecuador, including plastics, chemical fibers, steel products, machinery and appliances, electrical equipment, furniture decoration, automobiles and spare parts, will be gradually reduced to zero from the current 5-40 percent.

 

Bilateral commerce. Image credit: Gobierno de Ecuador.

 

Bilateral Trade

In 2022, bilateral trade reached $13.1 billion, up 19.7 percent year-on-year. China was Ecuador’s second largest trading partner last year, reported Global Times, citing statistics from the General Administration of Customs.

“The FTA will also have a spillover effect on deepening cooperation between China and other Latin American countries,” Jiang Shixue, professor at the Center for Latin American Studies at Shanghai University, told the Global Times.

The China-Ecuador FTA is the 20th FTA signed between China and other countries, making Ecuador China’s 27th FTA partner and China’s fourth FTA partner in Latin America, after Chile, Peru and Costa Rica.

 

Bilateral Commerce, 2022. Webinar: How to do business in China? Commercial Offices of Ecuador in Canton and Beijing. Source: Ministry of Production, Foreign Trade, Investment and Fisheries, Ecuador.

 

Celebration of the Signing of the Ecuador-China FTA

Statement by Ambassador Chen Guoyou 

“Recently, we witnessed the historic moment of the signing of the Free Trade Agreement between China and Ecuador. In this sense, on behalf of the Chinese Government and the Chinese Embassy in Ecuador, I would like to extend my warm congratulations to both China and Ecuador, and express my sincere gratitude to all the friends who watch over the economic and commercial cooperation between the two countries, as well as the development of bilateral relations. Since the establishment of diplomatic relations 43 years ago, ties between China and Ecuador have been steadily deepening.

Economic and trade cooperation has become the “ballast” and “driver” of bilateral ties, bringing tangible benefits to the two peoples, and injecting new connotations into the long-term and stable progress of the China-Ecuador Comprehensive Strategic Partnership.

In particular, it is worth mentioning that in recent years, the magnitude of bilateral trade has been growing steadily and the structure has been optimizing day by day.

From 2020 to 2022, China has become Ecuador’s second most important trading partner for three consecutive years, and especially last year, it became the main destination for Ecuador’s non-oil exports for the first time.

Special high-quality products from the Andean country, such as shrimp, bananas, roses, yellow pitahayas, coffee, and toquilla straw hats are well known and collected in China.

Today, the signing of the China-Ecuador Free Trade Agreement is not only a great achievement of the diplomacy of the two presidents, but also an important milestone in the development of bilateral relations.

In this way, Ecuador has become the fourth Latin American country to sign a free trade agreement with China after Chile, Peru and Costa Rica.

This not only reflects our common desire to further deepen economic and trade relations between the two countries, but also demonstrates the new level of binational ties.

I believe that with the entry into force of the Treaty, the effects of trade creation, increased investment and job creation will further help the economic recovery, social progress and improvement of the well-being of the Ecuadorian people.

They will further deepen our relationship with intertwined interests, characterized by more China in Ecuador and more Ecuador in China, generating a remarkable demonstrative effect and profound influence in raising the level of economic and trade cooperation between China and Ecuador, and even between China. and Latin America.

Ladies and gentlemen, friends all,

Development is the eternal theme of human society and the key to social progress and people’s happiness. Although the current international situation is changing, economic growth is under increasing pressure and globalization is facing various adversities.

I am convinced that the historical trend of development and openness will not change, the desire of our two peoples to work together to face challenges and achieving common development and prosperity will not change either.

The signing of the Free Trade Agreement is precisely the best translation in this regard.

This Treaty carries the ardent expectations of the heads of state for further deepening of bilateral relations, and also embodies the valuable efforts of the negotiating teams of the two parties.

It is hoped that the business circles of the two countries can make full use of the preferential terms of the Agreement, take advantage of market, investment and growth opportunities, so as to be able to turn the Agreement into a “passport” and “coupon” in their importation, export and reciprocal investment.

China is willing to move forward in the same direction and work hand in hand with Ecuador at a new historical starting point, to push bilateral relations and economic-trade cooperation to a whole new height.

Thank you so much!” Ambassador Chen Guoyou.

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Dr. Soledad Quartucci | Founder

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