China is the largest market with 1.4 billion consumers and a per capita income of $12,556. It is Ecuador’s first non-oil trading partner and the world’s leading importer of agricultural products and food.

This profile highlights the Ministry of Production, Foreign Trade, Investments and Fisheries regarding the commercial opportunities that will be opened by the trade agreement that Ecuador and China will sign on May 10, 2023. This document is also called a free trade agreement. What is the difference?

Corpei CEO Eduardo Egas, who was part of the negotiating team that reached an agreement with the European Union six years ago, explains that in seeking an agreement on the concession of mutual customs privileges, two or more countries can reach a binding trade agreement with different requirements and scope. A free trade agreement (FTA) is one of those ways, but not the only one:

What will be signed with China: FTA or agreement?

We will sign an agreement with China that is not necessarily a broad FTA, as some disciplines are excluded from negotiations on mutual concessions, which makes it less ambitious. An example is the topic of investment, where only one aspect of this discipline was considered.

This does not make the agreement any less important and valid, since the agreements reached allow a great possibility of access to Ecuadorian products and services, whereby almost 100% of our current export offer will have preferential access to the Chinese market.

Of all the signed agreements, which was signed with the best conditions for Ecuador or which gives the best results?

Without a doubt, and because of its results, the Agreement on Trade for Development that we signed with the European Union was the broadest and most comprehensive agreement that Ecuador has signed so far: it included different disciplines; it was broad in terms of market access – for example, 100% of the basket of industrial goods was completely exempted -; they recognized in the negotiations the status of Ecuador as a less developed country, which allows us to have better deals than those which, among others, we give to the EU.

As for the concrete results, thanks to the agreement, Ecuador now enters more of its products on the European market; and Europe has more of its products on the Ecuadorian market. The bilateral trade balance remains positive for Ecuador, and the entry of European products has benefited the Ecuadorian consumer.

Where would China rank?

We will have to evaluate it according to its results in a few more years, but from the point of view of expectations and opportunities, without a doubt, this agreement will take one of the first places in terms of importance for the country.