Trade agreement with China is ‘virtually closed’, although the technical memorandum has not been signed

After about ten months of negotiations, the trade agreement with China is practically closed and Ecuador will be the fourth country in Latin America to have a free trade agreement with the Asian giant, said this Wednesday morning, December 14, the president of the Republic, Guillermo Lasso, at the inauguration of the XV China-LAC Business Summit 2022, at the Guayaquil Convention Center.

The summit is jointly organized by the Chinese Council for the Promotion of International Trade (CCPIT) and the Ministry of Production, Foreign Trade, Investment and Fisheries of Ecuador, with the support of various public institutions and the private sector.

“Today I can confirm that the trade agreement with China is practically closed. In ten months, we have carried out a highly efficient negotiation, protecting the interests of our industrial sectors and guaranteeing the access of our main export products”, affirmed Lasso, who explained that, from January to September of this year, Ecuador exported $4,448 million , surpassing everything from 2021, when $3,623 million were exported; and he projected that exports will grow 51% at the end of this year compared to the previous year.

China-Lac Summit 2022: “We aspire to present projects that seek financing and that may have the support of the Chinese Government”

However, the president avoided signing a technical memorandum of understanding that he himself announced last week would be signed during the summit. In this regard, Julio José Prado, Minister of Production, Foreign Trade, Investment and Fisheries, clarified that the document will not be signed until the negotiations are 100% closed, which could take place in the coming days.

“In this case, we have defined that, until there is a total technical closure of 100% of the products and we are fully in agreement between Ecuador and China, a memorandum has not been signed,” said Prado, who added: ” Beyond the signing of a technical memorandum, what I can announce is that this is the fastest and most efficient negotiation, said by the Chinese ambassadors”.

The minister indicated that the latest offers made by Ecuador and China are being reviewed; he reiterated that, of the 17 negotiating tables, 16 are totally closed; He revealed that the talks are currently focused on making an improvement in the offer, especially on the Ecuadorian side; although he assured that, to date, 100% of the export products that Ecuador sends to China are included in the trade agreement.

Regarding the improvement that Ecuador is looking for, Prado said that these are very specific products. “Chapters related to cooperation and customs matters, cooperation in services, cooperation in investment matters and a very important chapter related to electronic commerce have been closed,” added the official, who assured that the signing of the agreement will represent an additional increase in exports of $1,000 million immediately.

Regarding imports from China to Ecuador, he assured that these negotiations with China will be the most successful in terms of exclusions of Ecuadorian products that are highly sensitive, such as textiles, footwear, the metal-mechanic sector, the ceramic sector, and agriculture.

Meanwhile, Foreign Minister Juan Carlos Holguín assured that the commitment of President Guillermo Lasso and his Chinese counterpart, Xi Jinping, is to have the final text of the agreement signed before the end of the year, that is, in the next fifteen days.

Ecuador maintains the expectation of closing negotiations with Mexico and China before the end of 2022

For his part, the President of China, Xi Jinping, thanked, through a written message, the Ecuadorian Government and President Lasso for the preparations made for this event.

“Throughout fifteen years, since its creation, the China – LAC Business Summit, with a firm commitment to serve companies, has played an important role in promoting economic-commercial cooperation and deepening cultural exchanges. between China and the region, becoming a flagship brand of practical China-LAC cooperation,” said the Chinese president.

According to figures disclosed by Minister Prado during the opening of the event, China is the region’s second largest trading partner, which is the main destination for Chinese investment. He mentioned that, in 2021, trade between China and the region reached $449 billion, which represents an increase of 41% compared to 2020, according to Chinese customs figures.

Shrimp, the star product in China and at the top

The summit has been held since November 2007, with alternating editions between China and Latin American and Caribbean countries. Until now, fourteen editions have been organized in the countries of Chile, Colombia, Peru, Costa Rica, Mexico, Uruguay and Panama, with the participation of more than 16,000 businessmen.

In the commercial exhibition there is a large presence of Ecuadorian shrimp companies that export to China. According to Minister Julio José Prado, shrimp is the Ecuadorian star product: it represents more than $3,000 million of the $4,448 million that Ecuador exported in total to the Asian giant from January to September. Crustacean exports to China grew this year by 103% compared to 2021.

Shrimp exports consolidated upwards in the first half of the year; its entry into the Mexican market has not yet been defined

Another sector with significant growth, but in imports to Ecuador, is the Chinese automotive sector, which is also present at the summit with exposure of some brands.

The program includes a macro business roundtable and a plenary session to take advantage of post-pandemic revitalization opportunities in order to build a more interconnected world. This event also presents various cooperation forums on the topics of trade and investment, green industry, Think Tank China-LAC and digital cooperation. (YO)