After the signing of the trade agreement between Ecuador and South Korea, the banana sector has high expectations. They hope to quintuple exports to that country, even from the fourth largest supplier of bananas to become the first, which is now the Philippines.

And the 30% tariff paid for fruit entering South Korea will be reduced by 6% each year until it reaches 0% within five years, after the Strategic Cooperation Agreement takes effect. Economic Commission (SECA), which was signed on the night of Tuesday, October 10, by the foreign trade ministers of Ecuador, Daniel Legarda, and South Korea, Bang Moon Kyu, in Seoul, as a prelude to the full ratification of the trade agreement.

Ecuador will start exporting mangoes to South Korea, health protocol and trade agreement are ready

According to Legarda, Ecuador has an export structure of about $100 million in non-oil products to the Asian country, but with the agreement it could be “much more.”

South Korea is a country that annually imports about 320,000 tons of bananas. The Philippines is by far one of the largest suppliers of bananas, followed by Vietnam, Colombia, Ecuador, Guatemala, Peru, Costa Rica, other countries, in that order, according to the executive director of the Banana Export and Marketing Association (Acorbanec). ).), Richard Salazar.

Ecuador accounts for approximately 4.7% of South Korea’s total banana imports; However, one of the restrictions to not exporting bananas anymore is the high tariff that the fruit currently pays, which is 30%, which countries like Colombia, which already has a trade agreement, do not pay, explains Salazar.

It shows that from January to August this year, even without the trade agreement, there was a 37% increase in exports compared to the same period in 2022, but based on the country’s total banana exports, shipments to South Korea alone represent 0.34% due to the high paid tariffs.

Now, with the trade agreement, he adds, the customs duty would be reduced for five years, that is, it would reach 0 percent in 5 years. “This creates a very interesting potential for Ecuadorian bananas that we could easily quintuple in exports. It is the first world market that buys bananas premium and it is no doubt already tending to become a high potential market.”

Ecuador and South Korea completed the pre-signing of a trade agreement

For his part, the executive director of the Association of Banana Exporters of Ecuador, José Antonio Hidalgo, who accompanied the Ecuadorian delegation to the pre-signing, points out that they hope to triple banana exports.

“For us as a banana sector, Korea represents a market of 51 million inhabitants, the possibility of signing this trade agreement and reducing the customs burden, which is currently 30%, would mean that in the future we can double or even triple our position in a market that appreciates quality bananas and with quality efforts. This means returning the volumes we had five years ago, being able to generate more jobs and having the expectation that we will continue to grow in the Asian markets,” says Hidalgo.

Although the Philippines leads the list of countries to which South Korea imports bananas, Salazar points out that the nation has continued problems with production due to phytosanitary problems. From 2020 to 2022, almost 26,000 tons fell. “I would say that they will continue to have problems, this year they have reduced production again.”

This is Formosana 218, a banana resistant to Fusarium race 4 that has been tested in two provinces of Ecuador

In this context, he points out that Ecuador exports more and more to China, Japan and South Korea, so our country “becomes the main substitute for the Philippines in case it produces less and exports to these countries”.

And Ecuador has a very important advantage: the organoleptic conditions of the fruit. “It allows us to reach such distant markets and for the fruit to arrive green, unlike other countries like Colombia, Costa Rica and Guatemala that mainly export to the US or Europe, we have more fruit and the conditions allow us to arrive or travel long distances, without the fruit arriving ripe.”

According to Salazar, East Asia is the main exporter, with China leading the way, followed by South Korea and Japan, which he considers extremely important markets with large populations. “In the specific case, South Korea has a population of almost 52 million inhabitants, there is an incredible potential for growth in all exports, but I think there is a great potential especially in bananas”, he points out.

The pre-signing of the trade agreement between Ecuador and South Korea will take place on the night of this Tuesday, October 10

According to Acorbanec’s report on the number of exported boxes, from January to August this year, China tops the list of East Asian countries with 10,749,702 million compared to 8,070,548 in 2022. It is followed by South Korea (837,177 and 609,737 in 2022), Japan (3,545 .088, last year 4,433,445), Singapore (16,200, and 21,614 in 2022). Except for Indonesia and Taiwan, but there were no exports to those countries this year.

The Regional Corporation of Ecuadorian Banana Growers (Agroban) also celebrated the signing of the trade agreement and after recalling the FTA with China, they decided on Japan.

According to Salazar, Japan is paid a tariff of between 20% and 30%, and after signing with China and South Korea, he indicates that “they are two of the three, we are now going through Japan, which is now our turn. It will have to be done by another government, but in any case there is a pending task.”