On December 14 and 15, Guayaquil will host the XV China-Lac 2022 Business Summit for the first time, the most important business meeting between China and the region. Gustavo Cáceres, president of the Ecuadorian-China Chamber of Commerce, one of the organizers of the event, comments on how Ecuador managed to host it, the expectations generated by the meeting of more than 2,000 visitors and the country’s aspirations before signing a trade agreement with China.
How and why Guayaquil is the venue for the XV China-LAC Business Summit 2022, what factors prompted this decision?
As a Chamber we have been here since the end of 2017, through different trades and letters, and together with the support of the Ecuadorian Embassy in Beijing, promoting Ecuador to host the summit. In 2019 we were candidates, however, Panama hosted the summit, it is now that with the new government of President Guillermo Lasso and after his visit to China, at the beginning of February, the invitation from of the Chinese government for Ecuador to be the headquarters. However, I highlight the fact that this has been largely due to the management that our institution has been doing since 2017 and 2018.
And why in Guayaquil?
In the last editions that have been carried out in Latin America: Panama, Montevideo, Monterrey, the fact that they have been port cities coincides, so on this occasion the precedent of Guayaquil being the venue was maintained.
What is the current trade between China and Ecuador?
Exports to China until September, according to the Ministry of Foreign Trade, exceed $4.4 billion, this represented a growth of 83% compared to 2021, and imports from China also reached $4.6 billion, showing an approximate increase of 2. 3 %. A very small deficit is still maintained within this trade balance, however, we are waiting to see how these figures will end until the end of December.
What benefits will Ecuador obtain by hosting the XV China-LAC Business Summit 2022?
This becomes the first face-to-face summit after the pandemic. In previous summits, the additional benefit for the host was the economic benefit, even for the city. We aspire to have a little more than 150 Chinese businessmen in person, plus the different delegations of businessmen who have already confirmed their attendance from Colombia, Mexico, Argentina and Peru. Due to the pandemic, I do not think that the numbers of the last venue, which was in Panama in 2019, will be reached, but it is very important because we are already resuming face-to-face activity.
Another benefit that has been repeated in several of the previous editions, both in Mexico, Uruguay and Panama, is that large investment projects were closed, even valued at more than $1,000 million, presented by the local government and which was somehow accepted their participation by the Chinese government. So we aspire that here also during these summit days, within the meetings that the authorities are going to have, these projects that may be seeking to be financed and that may have the support and support of the Chinese Government are presented.
It is expected that during the summit the technical memorandum will be signed before the signing of the FTA with China. What will come after that, when is the signing of the FTA expected?
This is an issue that is being handled 100% by the Ministry of Foreign Trade, we understand that after this signing, the following would be the legal review of the documents to be able to say that this will be the next step. On an estimated date, as a Chamber we insist that it must be signed when all pending issues are defined, be it in the technical, legal part and the political part will also come, such as the approval by our Assembly. We hope it will be as soon as possible because without a doubt this will generate great benefits for Ecuadorians, especially for the agro-export sector and I also believe that it will positively influence the development of the rural sector of our country.
Guillermo Lasso: Technical Memorandum of Understanding for the FTA with China will be signed on December 14 in Guayaquil
What benefit will the FTA with China bring to Ecuador, in terms of exports?
China is already our main export destination without a trade agreement, shrimp, bananas, cocoa, wood, minerals, flowers cover 90% or 95% of all exports from Ecuador to China, but with this trade agreement they will open up to us the gates of a large market. China has the largest middle class in the world, more than 800 million people, who have within their tastes and interests to be able to buy imported food, first of all because they have a medium-high purchasing power because they are upper middle class; second, also the issue of food safety, something that is now in vogue in China; and third, Ecuadorian products enjoy a great reputation in this country.
With this agreement, some products such as avocado, dragon fruit, pineapple and others in the medium term may have the same, why not a little more, the export levels that bananas and even shrimp already have. This is speaking of new products, and the direct benefits on current exports are a tentative 10% reduction in banana tariffs, in shrimp they also pay 2% tariffs, which will undoubtedly energize; According to figures from the banana unions, they aspire to be able to double the number of boxes sold to this country.
As for imports from China, are there exclusions to protect the national industry, which ones?
We know as a union that is part of the attached room that there are exclusions within this agreement, there has even been talk of a percentage that out of 100% of negotiated items is expected to be around 10% exclusions to protect the most sensitive industries, without However, we do not have this information, it is confidential information that, at the time, the Ministry of Production and Foreign Trade, have mentioned, will make known.
What kind of investments, from what sectors, are expected to land in Ecuador after the signing of the treaty with China?
The trade agreement that is being negotiated with China does not contemplate this investment chapter, however, what has happened in countries such as Peru (2010), Chile (2006) and Costa Rica (2011), which already have trade agreements in force with the Asian giant, has shown that Chinese investment comes later, this here, however, is going to be a job that the Government should promote with the different fairs and in activities such as the summit.
What other countries in the region have an FTA with China and what have been its results?
The increase in exports from Peru in the first years of the agreement was approximately 200%, they have a positive trade balance of more than $2,500 million… In the case of Chile, trade is greater, obviously it has more years in In effect, the best year of this relationship was in 2018 when it exceeded $35,000 million in trade, currently Chile also has a positive balance with China. (YO)
Source: Eluniverso
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