The signing of a trade agreement between China and Ecuador, which took place on May 10, is already raising expectations, although it has yet to enter into force, not only among exporters targeting the market of 1.4 billion people, but also in the import sector. plans to diversify more Asian prices and products in its catalogs in the country. This is the case of cell phones which have already benefited from reduced tariffs on equipment and taxes on plans in previous years.

In 2019, tariffs for mobile phones were abolished, pills and computers that left the tariff at zero, and in 2021 the special consumption tax (ICE) of mobile plans was reduced.

Although mobile phones are already imported with zero tariffs, they are included in the 4677 sub-headings of imported products that will immediately benefit from the agreement with China.

So what would be the benefit to those products when that agreement goes into effect? The Ministry of Production, Foreign Trade, Investments and Fisheries clarifies that the tax relief that was passed in 2019 is unilateral, i.e. it is not fixed that this duty remains at 0 percent over time.

“In the history of Ecuador, there is no trade agreement that was rejected by the Assembly.” We expect the same with the agreement with China’

“According to the responsible government, Ecuador could raise tariffs on these products tomorrow, which could increase in price again. With the free trade agreement with China, taking away these products at 0%, it was done to consolidate immediate access in the long term. That is, if the government on duty decides to raise tariffs, as has already happened, these products coming from China will continue to be paid 0%”, and thus the citizens’ access to these products is protected as a state policy, this portfolio of the state indicates.

In addition, the Ministry adds that there are other products for which Ecuador has not reduced the customs duty and that the agreement with China will reduce them to 0%. Some are parts and spare parts for computers (immediately going from 10% to 0%), printers, sound equipment, among others.

Overall, the perception among businesses and citizens is that the prices of Chinese cell phones – which are already coming cheaply to the domestic market – will continue to fall as the agreement takes effect.

Juan Carlos Rugel, administrator of Ganacello, located in the Plaza Quil shopping center, in the north of Guayaquil, assures that when the agreement with the Asian giant goes into effect, the strategy will be to bring more Chinese units and brands than those already marketed with local success.

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And it is about the fact that Ganacell has a dozen Chinese mobile phone brands in its catalog, which excelled in sales due to their low price and quality. They are up to three times cheaper than well-known brands, and the quality is even higher, says the administrator, who offers Chinese brands Tecno, Xiomi, Redmi, Infinix, Pocco and others.

The prices of these computers vary between 110 and 230 dollars, depending on their memory and processor capacity. While phones of more commercial brands, with the same characteristics, are sold in the same store for more than 300 dollars.

Another retailer, who prefers to reserve, assures that he sells Chinese phones from 2021 and also points out their low prices compared to other brands in the market, but admits that he has had two or three specific warranty problems with certain brands that he no longer sells.

“When importing, you have to be aware of what you are bringing, there are good brands, but there are also others. I already cured mine stock and I only bring brands that I know have no problems,” says a businessman who has a store on Avenida Francisco de Orellana, in the north.

He has high expectations for the reduction of Chinese mobile phones, currently markets eight brands and intends to bring more equipment as soon as the commercial agreement comes into force.

On the other hand, other businessmen, like Omar, the owner of Best Cell, hope to “absorb” the content of the agreement and the laws for analyzing the import of this equipment.

Smartphones with a zero tariff are not yet fully available

According to figures from the Ecuadorian Federation of Exporters (Fedexpor), total imports from China to Ecuador in 2022 amounted to $6,452 million, an increase of 19%. Of this, imports without oil amounted to a total of 6,264 million dollars, with a growth of 20%.

Manufacturing inputs (raw materials and capital goods) account for 77% of non-oil imports arriving from China, totaling $4,822 million in 2022, making the Asian giant a major supplier of raw materials and capital goods. capital needed for technicalization of national production. In 2023, between January and February, 160 million dollars of electrical appliances were imported from China.