QUITO (AP) — Ecuador is preparing to sign a free trade agreement with China, its main non-oil trading partner, on Wednesday night, and expects broad economic benefits and job creation, Foreign Trade Minister Julio José Prado said. .
In statements to The Associated Press, Prado said that “never before in Ecuador’s history had a trade agreement been reached with our main trading partner” to which the South American country exported almost 5 billion dollars last year.
Ecuador’s representatives – led by President Guillermo Lasso – are expected to sign the treaty that was negotiated in 10 months. For it to enter into force, the approval of the Constitutional Court and the Assembly is required, with whose representatives Prado said that he has been in permanent dialogue.
The minister assured that exports to China could double until 2030, when they are expected to exceed 10,000 million dollars, “which will undoubtedly benefit jobs in all regions of the country.” Currently 1.2 million jobs are linked to export products but the number is expected to almost double when the free trade agreement is operational, Prado said.
Among the main Ecuadorian products that are exported to the Chinese market are shrimp, bananas, cocoa, flowers, fish and minerals, while Ecuador imports machinery, technological products such as cell phones, tools and vehicles, among others.
Franklin Torres, president of the National Federation of Banana Growers, stated that the agreement will facilitate the entry into China of Ecuadorian products without taxes -now bananas pay a 10% tariff-, but also “the arrival of Chinese products that we need here, for example, fertilizers, at lower prices”.
Prado pointed out that 828 products identified as “highly sensitive” such as textiles, metal-mechanics, footwear, flat ceramics, potatoes, rice and sugar were excluded from the agreement, as well as some 1,000 “medium sensitivity” products with tax reduction terms of 15 to 20 years such as meat, toys, plastic items and cocoa powder, among others.
He stressed that the trade agreement will also reduce production costs for the Ecuadorian industry when raw materials, inputs, capital goods, seeds and agrochemicals arrive from China without taxes.
“Trade agreements are supranational regulations that do not depend on a government or a minister, they are State agreements,” Prado said when asked about the delicate political moment the country is experiencing, with President Lasso about to face impeachment and a probable impeachment in Congress, could stop the negotiation.
He added that he is also seeking to achieve new trade agreements and the closest ones are with Canada, the Dominican Republic, Mexico and the Pacific Alliance, “which are very advanced.”
71% of the Ecuadorian companies that export products to China, especially agricultural, are medium and small companies and artisans.
