The analysis of the Free Trade Agreement with the People’s Republic of China began in the National Assembly with questions from legislators who make up the International Relations and Human Mobility table of the National Assembly.

Minister of Production and Foreign Trade, Sonsoles García, was in charge of clarifying the scope of the trade agreement with China, and she first pointed out that an agreement is underway with another non-oil export ally, and what is required is to increase the volume of exports and increase real access to markets, generate economic growth, greater employment, promote production chains , promote and strengthen the internationalization of MSMEs, improve diversification and export growth.

He insisted that trade with China is important because it is the second strongest economy in the world with a growing market, with a poverty rate of 0% in 2020 and an unemployment rate of 4.8%, a digital leader.

In front of the legislators, he explained that 71% of Ecuador’s exports to China are made up of small and medium-sized enterprises and craftsmen, and that the projection of export growth would amount to almost 4%, while imports would increase by 19%.

The trade agreement between Ecuador and China has already started the process in the International Relations Commission

For legislator Ricardo Ulcuang, from the Civil Revolution (RC) movement, He is concerned whether this agreement guarantees a level playing field since China has its own currency that it can devalue and Ecuador has the dollar; In China, their work is cheap, while in Ecuador it has a high price.

Minister Sonsoles García confirmed that the labor regime in China is similar to those in the region; that although the two countries have different currencies, “the minimum wage in China is $400, there is $3.9 an hour; In other words, it is monopolized by our salary, it is even higher than neighboring countries.”

In the information on the website, it is known that the Chinese interprofessional minimum wage for 2022 was 268.3 euros per month.

Another aspect that worries the Correísta sector is the level of impact that commercial relations with the United States would have if the agreement with China is approved.. He asked this because the legislator of the Republic of Croatia stated that a year ago the USA approved the law law which set up obstacles for Ecuador to have the possibility of establishing relations with China, which former President Guillermo Lasso welcomed, he said.

Ulcuango stated that although it is true that the agreement includes barriers to protect national products, it is easy to see that Chinese manufacturing has invaded Ecuador affecting the textile, leather, footwear and agricultural products sector, therefore he added that it is necessary to know in detail how plans to resolve this issue.

An official from the Department of Foreign Trade responded that the United States knows that this agreement between Ecuador and China is more of a market access than a trade agreement.; which is a bilateral system of customs privileges, where we have tried, with exceptions, to be able to protect the local industry and know that there are sensitive products such as textiles, footwear and leather, “which we cannot put into play with the differences in conditions that it has.” China and Ecuador can compete.”

García stated that the United States understands the need for Ecuador to be such a small market, but with so much production that it has to reach different markets; “There was no resistance from the United States to having a market access agreement with China.”

Fausto Fernández, from the National Democratic Action bloc (ADN)said that he reflects the concerns of legislator Ricardo Ulcuang and asked the official if this trade agreement with China will be subject to international courts that have caused so much damage to our country with resolutions when certain disagreements arise.

Minister Sonsoles García’s response to the Legislative Commission was: “There is no arbitration chapter, it was not negotiated.”

Rep. Carla Cruz of the Construye movement also joined the concerns expressed by Rep. Ulcuango., regarding the strengthening of the national industry in the face of Chinese competition, assuming that this Asian country is much more powerful than Ecuador; and for this purpose he also asked about the strategies that the Ministry of Production will use to support national companies, he asked for data on the number of positions that will be opened in the market for Ecuadorians; and finally, he asked what was happening with the trade we have with Taiwan.

Minister García pointed out that in terms of strengthening the industry, they are looking for tools to be more competitive, and that the main pain point of the entire local and industrial sector is the cost of transportation, energy, production and labor; That is why he believes that free zones will be an excellent tool. And as for jobs, he said that in the next ten years, about 11,000 jobs will be created and exports of three billion dollars will be achieved.

Regarding trade with Taiwan, the state minister assured that there will be no impact, as this trade agreement does not affect Taiwan and Ecuador does not intend to start negotiations for market access or a trade agreement with that country, he explained.