“Due to the lack of a trade agreement, in the last 25 years we have practically continued to export the same thing to China”

Twenty-five years have passed since the Ecuadorian-China Chamber of Commerce was founded in 1998, a union that, on the verge of signing a Free Trade Agreement, sees crystallized the vision of its founder, Segundo Wong Mayorga (+), who always saw China as the country of the future, according to the president of the Chamber, Gustavo Cáceres, who also recounts how the commercial exchange between the two nations has evolved and the expectations of this new commercial stage between Ecuador and the Asian giant.

25 years ago – when the Chamber was created – what were bilateral relations with China like and how have they evolved to date?

We know that trade did not exceed $100 million, a slightly balanced balance, but we see that from that time to the present, the products that were normally exported remain the same, basically primary products such as bananas, plantains, shrimp, wood, sea ​​products, among others; They are those that appeared in the year 1998 that our Chamber was founded. The amounts have changed, we went from a commercial exchange of $100 million to the latest official figure that exceeds $10,000 million, a historic figure in 2022. However, according to data from Chinese customs, the commercial exchange in in 2022 it exceeded $13,000 million with a positive trade balance for the country, also an unprecedented situation.

Agreement with China excludes about 800 highly sensitive products; and includes relief with terms of up to 20 years for sectors of medium sensitivity

When would the agreement between Ecuador and China be signed?

The information we have is that at the beginning of the second quarter, tentatively in April, the trade agreement will be signed. We hope that President Guillermo Lasso’s visit to Beijing to sign with his counterpart, President Xi Jinping, can be finalized.

What are the expectations of the members of the Chamber that do business with the Asian giant and of the Chinese companies that have investments in Ecuador regarding the signing of the FTA?

The expectations that exist, beyond the signing, which we believe is a fact given the good political will that exists on the part of both governments, gives a little more to what comes next. After signing, this document must go to the Constitutional Court, which must ratify the validity of the document, to then go on to be ratified in the National Assembly, the expectation is up to this point because as a Chamber, as a productive sector, as businessmen, it is expected that the decision taken when it comes to debate in the Assembly will be a pragmatic decision.

There is no doubt that the agreement between Ecuador and China will favor our economy, we are complementary economies, China needs the food that Ecuador has and due to the lack of a trade agreement in the last 25 years we practically continue to export the same, only now in different amounts. The trade agreement will open the doors for new Ecuadorian products to reach the Chinese market.

How can you be more attractive to the Chinese market?

We have to learn what their tastes are, their interests and above all what are the media used. China is one of the number one countries in the use of the Internet, out of every 100 users who use the Internet in China, 80 use it to make purchases. Another important detail is that unlike what happens here in Latin America, in China the fruit is bought through platforms on-line and in the festivities a very appreciated gift is a basket with good fruits, knowing details like this or what type of packaging they prefer is a market that focuses a lot on taking care of food safety and health; So, we have to know more about this market.

In the coming weeks, the chief negotiators of China and Ecuador will define the date and place for the signing of the FTA

Has the announced signing of the agreement made more businessmen seek advice from the Chamber to explore the Chinese market?

Undoubtedly, this process has generated great expectations in the Ecuadorian business sector. Every day there are more businessmen who come to us to find out what opportunities there are, to buy products and also the export sector is seeing the opening of this market with great potential. the largest in the world with more than 1,400 million people, a middle class that exceeds 600 million people, this is more than the population in Latin America, which is a middle class with a very high purchasing power and tastes that they tend to westernize, that is, they see a lot of what is consumed in the West.

What do you think will be the segments that will benefit the most from the FTA with China?

We are sure that the ones that will benefit the most will be the exporting and importing sectors, without a doubt the exporter will see it much faster because we export many products to China. It is the main country of origin of imports that Ecuador makes with more than $5,000 million of purchases from China and an interesting fact is that more than 75% of imports made from China are related to capital goods, raw materials, work tools, that is, inputs that Ecuadorians use to be productive, having a better price, having zero tariffs, it will undoubtedly be a facility to have access to better technology and cheaper tools, which will allow us to be more competitive and more productive. (YO)