The multilateral agreement signed between Ecuador and the European Union, which entered into force on January 1, 2017, turned seven years old this Monday and entered its eighth year. The negotiating set consists of 2,565 tariff items, of which 69.6% entered with zero customs duty as of 2017, and 3.6% were excluded, i.e. had no concessions.

The others followed a gradual tax reduction that went through periods of 3, 5, 7, and there were 10 and even 15 years remaining. At the time the agreement entered into force, the European Union (EU) liberalized almost 95 percent of customs items, and Ecuador about 60 percent. Since January 1, more than 140 product subheadings have been added that will enter the EU with zero customs duties, but which have been gradually reduced during these seven years.

One of them is vehicles of European origin, for which the customs duty has been reduced by 5% since 2017 until it reaches zero in 2024. In this case, the results were positive, noted Genaro Baldeón, executive president of the Association of Automobile Companies of Ecuador (Aeade), noting that sales of these vehicles increased by 507% between 2016 and 2022. In 2016, 17 brands with models assembled in Europe were present on the Ecuadorian market. By 2023, that number has almost doubled, with 30 brands.

Agreement with the EU increased sales of European vehicles by 507% in six years What will happen in 2024 with zero customs?

The discount schedule, which can be found on the website of the National Customs Service of Ecuador (Senae), also includes other products, such as hams, tomatoes, mixed vegetables, paints, dyes, perfumes, dental floss, deodorants, shaving preparations, pastes for teeth, shampoos, porcelain, among others.

For example, in the case of ham, they started declining by 3% per year from 2017. A customs duty of 22% was paid for this product in 2017. Toothpastes started with 18 percent, as well as shaving preparations and body deodorants. Vehicles and their CKD (parts and parts) are the ones that started with the highest tariffs, at 35%.

For Juan Carlos Díaz Granados, executive director of the Guayaquil Chamber of Commerce (CCG), trade agreements are a two-way street to progress: “We win by exporting, by selling more; and we gain through imports, reducing the costs of inputs and capital goods for production. We have also achieved that hangers have a greater product range and price competition in favor of the Ecuadorian consumer.”

To give an idea of ​​how trade between Ecuador and the EU has grown, he found that only in those 144 subheadings that will have a 0% tariff in 2024, between 2017 and 2022, imports increased by 73%. “In other words, we have already appreciated the advantage of accessing a larger market with high purchasing power and those interested in our products, such as the European Union. Therefore, it is important to continue signing trade agreements,” said Díaz Granados.

“The goal is to liberalize trade with all countries of the World Trade Organization”

Ecuador joined the World Trade Organization (WTO) in 1996, and thus the gradual liberalization of its trade, which is precisely the framework of the multi-party agreement with the EU. “The same agreement with the WTO allows an agreement between parties who want to deepen these advantages, to liberalize trade, which is what we should do with all WTO countries,” said Gabriela Uquillas, executive director of the Ecuadorian Business Committee (CEE).

For an expert on customs issues, the result of the agreement between the EU and Ecuador so far “has undoubtedly been fantastic”. And he adds: “We saw more in a couple of products; We saw less of this with other products, but our exports gained space because we were able to have European products with more favorable prices; and today, as the times are coming, we will go into full tax relief for goods that are of great interest.”

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

He assured that the agreement with the EU is a positive example of what Ecuador can get with these commercial instruments, warning that the country currently has agreements in preparation with Costa Rica, China and South Korea, reached during the government of Guillermo Lasso. , with negotiations on interests with Canada and the United States. Uquillas highlighted the work the previous regime did on the trade agenda. “We have to help him move forward; “We already have it: the Constitutional Court has passed… And it is important that parliamentarians look at it with the perspective of positivism that the agreement with the European Union brought us.