Ecuador-Mexico Agreement: it is likely that the issue will remain on ‘stand by’ and later one of the governments will take it up again

Concern, but not surprise. This is how the Ecuadorian business sector took the announcement made by the president of Mexico, Andrés López Obrador, who announced last week that shrimp and bananas from Ecuador will not enter into the trade agreement being negotiated with Mexico.

“We are going to sign it, but in that agreement it was included to remove tariffs for the importation of two products that they were proposing: shrimp and bananas. I told him that we were not going to be able, in this case, to include plantains and shrimp,” said the Mexican president.

Mexico announces that Ecuadorian shrimp and bananas will not enter into a trade agreement

For Alexandra Mosquera, director of the Ecuadorian-Mexican Binational Chamber of Commerce (Comecuamex), López Obrador’s announcement was not a surprise, as she recalled that the Mexican president had already exposed his position on bananas and shrimp on previous occasions. However, the perception that was had was that after the meeting of the leaders, Guillermo Lasso and López Obrador, there were agreements and that the details would be channeled.

The president of the National Chamber of Aquaculture (CNA), José Antonio Camposano, said that “given that access would not be given to the main product of the Ecuadorian offer, it loses relevance to pursue the signing of a trade agreement of no significant value for the country ”.

The Ecuadorian government, through the Minister of Production, Foreign Trade, Investment and Fisheries, Julio José Prado, reacted to the Mexican announcement: “During the last few weeks there have been advances that made it foreseeable that Mexico would grant access to shrimp and bananas based on proposed quotas for Ecuador. However, the exclusion is maintained and therefore the negotiations have not been closed. He ratified that as long as these two products remain excluded, “we will not close FTA with Mexico.”

Given this, Mosquera indicated that “it would be understood that for now it will not be possible to move forward.” What could mean the probability that the topic stays in standby, as has happened on other occasions, and later some of the governments take it up again.

“Both the sensitive sectors, as well as those most interested in the signing, agreed that the main objective of the agreement between Ecuador and Mexico was the final access of Ecuador to the Pacific Alliance, as a market with wide potential. But they always indicated to the Government that the Agreement should be a winner for both countries, and in the case of Ecuador, particularly for the country’s largest exportable supply. In addition, that the agreements set precedents and the country’s star products must have access,” explained the head of Comecuamex, noting that at least in the Ecuadorian business sector there was an expectation about the closing and signing of the agreement between Ecuador and Mexico. due to the information constantly indicated by the Ecuadorian Government about the proximity of this moment.

Fishing income “is resolved” for trade agreement between Ecuador and Mexico, negotiations continue with shrimp and bananas

However, despite the fact that not signing the agreement with Mexico means for Ecuador not entering the Pacific Alliance, Mosquera indicated that for this reason Ecuador opened direct parallel negotiations with other markets.

“It is understood that for this reason the Government is simultaneously seeking other direct agreements, such as the one with China and Korea, in Asia; and others with Canada, the Dominican Republic, Panama and even advances with the United States as alternatives to expand Ecuadorian exports,” said the union leader, who indicated that the important thing is that these agreements are also developed in conditions that allow the majority of the productive sectors and that the Government work in parallel on competitiveness, reducing red tape and promoting the sectors with the greatest potential to be productive and competitive, as he recalled that producing in Ecuador is more expensive than in other countries.

Regarding the other negotiation processes with more markets, Prado reviewed the progress of each one. He recalled that the negotiations with Costa Rica are already closed, with China they are in the last stage and with South Korea there is a 70% advance. Meanwhile, with Canada they are in the exploratory phase and with Panama, the Dominican Republic and the United States are in the second commercial protocol.

What bananas and shrimp represent for Ecuador and Mexico

• According to figures from the Banana Marketing and Export Association (Acorbanec), based on figures from the Trademap platform that covers 220 countries and territories and 5,300 products, Ecuador exported 6’813,409 metric tons of bananas to the world in 2021, which ranked as the first exporter globally.
• Meanwhile, Mexico exported 488,078 tons and ranked sixth in the rankingbehind Colombia, Costa Rica, Guatemala and the Philippines.
• As for shrimp, the Mexican aquaculture industry generates around $1 billion each year. The main producing state is Sinaloa with 40.3% of the country’s total production, followed by Sonora (39.7%) and Nayarit (7.5%), Tamaulipas (4.8%) and others (7.7%). %).
• Shrimp production in Mexico has shown a gradual increase since 2013. In 2020, around 219,000 metric tons were produced, according to figures from the Mexican Agro-Food and Fisheries Information Service (SIAP), with a decrease of 5.7% compared to the previous year. 2019.
• While, Aquaculture Magazine published on December 27, 2021 a ranking in which it positioned Ecuador as the first country to produce 1 million tons of shrimp, above China, Vietnam, India, among others, which placed the country as the largest shrimp producer in the previous year, in which the Ecuadorian aquaculture industry generated a total of $5,323 million. This year the industry plans to close with exports of around $7,000 million. (YO)