The first quarter of 2023 enters its last leg with Ecuador focusing its commercial agenda and strategy on opening and improving the conditions of destination markets, through the signing of commercial agreements, towards the countries of Central America and the Caribbean.

Seven days after the signing of the trade agreement with Costa Rica, on March 1 in San José, Julio José Prado, Minister of Production, Foreign Trade, Investments and Fisheries, announced the start of negotiations to negotiate trade agreements with the Dominican Republic and Panama.

97% of the export supply from Ecuador to Costa Rica will benefit from the trade agreement

“We will start negotiations with Panama in the coming weeks. We have agreed on quick and expeditious negotiations, as we did with Costa Rica,” Prado revealed in a radio interview, revealing that Ecuador’s strategy with Panama will be based on reaching a partial rather than a full trade agreement like the one signed with Costa Rica.

“We will only negotiate on specific lists of products, not like Costa Rica where we negotiate on everything. This will allow us to make better progress with Panama,” said Prado, who confirmed that they have also agreed to start trade negotiations with the Dominican Republic in the coming months.

This was confirmed by the president of that nation, Luis Abinader, during his official visit to Ecuador this week. “Commission of Dominican businessmen and the Ministry of Foreign Affairs; and from industry and commerce, they will meet to see some free trade agreements for different products of interest to both Ecuador and the Dominican Republic,” Abinader said.

For economic analyst Jorge Calderón, this commercial strategy of seeking better conditions in the countries of Central America and the Caribbean could correspond to a way of partially replacing the commercial agreement that Ecuador has not yet signed with Mexico. According to experts, this cannot yet be ruled out because it is a condition for membership in the Pacific Alliance.

New markets, which will be opened by trade agreements, will be able to accept the excess production of Ecuadorian agriculture

“In this case, the failure that exists with Mexico, especially regarding shrimp, forces us to look for other alternatives in the short and medium term, so that Ecuadorian products that have an interesting reception in Mexico can have alternative markets that, in addition to distance and logistics the issues show certain similarities in consumption and habits that Central America and the Caribbean have,” explained Calderón, who in any case emphasized the need to insist on reaching an agreement with Mexico, although he admitted that it might take time because of the “rather nationalistic” attitude” President Andrés López Obrador.

In any case, the expert described as an ideal alternative the search for agreements with countries such as Costa Rica, Panama and the Dominican Republic, which, although they are smaller and smaller economies, but relatively stable, show that at the macroeconomic level in recent years they have shown interesting indicators and have become additional space for Ecuadorian exports.

Favorable trade balance for Ecuador

In the case of the Dominican Republic, according to figures from the Ecuadorian Federation of Exporters (Fedexpor), in 2022, non-oil trade left a favorable balance of $98 million for Ecuador, where exports outweighed imports.

In the case of exports, it reached $121 million, an increase of 14% compared to 2021. This places the Dominican Republic as the twentieth destination market for non-oil exports from the country, which currently markets more than 230 oil products. exports to that market and more than 370 companies related to exports to this country.

The five main products that Ecuador exports to the Dominican Republic:

These products concentrate 69% of Ecuador’s non-oil exports to the Dominican Republic.

As for non-oil imports from the Caribbean country, it is expected to grow by 8% in 2022.

Five main products imported from the Dominican Republic:

These products concentrate 92% of non-oil imports.

Meanwhile, non-oil exports to Panama also increased in 2022, a year in which the Central American country ranked as the 26th destination of Ecuador’s non-oil exports to the world, with a share of 0.3% of total non-oil exports.

According to data from the Ministry of Production. Ecuador exported products in the amount of 71 million dollars, with a growth of 22.7% compared to 2021 (+13 million dollars). In addition, the state portfolio pointed out that during the last five years, the average of non-oil exports reached 53 million dollars.

Non-oil imports from Panama also increased and reached $69 million, 13.5% more than in 2021 (+ $8 million), which also results in an average non-oil import of $56 million over the last five years and a surplus of non-oil imports in favor of the trade balance Ecuador in 2017, 2018 and 2022, this past year with a positive balance of $2.2 million, but a deficit between 2019 and 2021.

Three teams are in charge of negotiating Ecuador’s trade agreements. Get to know who their heads are

In addition, in 2022 the National Customs Service of Ecuador registered 310 Ecuadorian companies exporting non-oil products whose final destination was Panama. The main products in the non-oil export basket are fodder, medicines, extracts and vegetable oils, other metal products and other products.

While 80.7% of imports from the Central American country are non-oil products such as fish and processed food, electrical transformers, vaccines, immune products and plasma, animal products (not for food), among others.