Treatment for signed trade agreement with China enters the final stage in the Committee for International Relations and Human Mobility of the National Assembly. In the afternoon of this Tuesday, January 2, members of the legislative committee plan to receive representatives from different sectors, which include former officials of the government of Guillermo Lasso, in which the agreement was signed on May 10, 2023.

“Today (Tuesday) would be the last session for this issue,” said the representative. Jonathan Parra, from the ruling Alliance of National Democratic Action (ADN).who presides over the legislative table, since they have to prepare a report by January 4, which they will send to the plenary session.

He said that the expectations from this agreement are “high”, because it is a very sensitive issue in terms of reactivating the economy that Ecuador needs. “We are reviewing and listening to every position of every sector, for example, textiles, automotive, agriculture, among others,” Parra said.

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This Tuesday, former Minister of Production Daniel Legarda is among those present, who, before his presentation, pointed out that his position and that shared by his predecessors, including those from the governments of Guillermo Lasso, Lenín Moreno and Rafael Correa, is that the national trade policy openness must be maintained through well-negotiated and strategic trade agreements for the country, such as those recently signed with China, South Korea and Costa Rica.

“The balance of the negotiations is favorable for the state, which covers the offensive elements, i.e. the export part, and takes into account the sensitivities, i.e. the part of the competition for products from China that interest us. in protection.. These two parts of the balance are considered in this agreement, along with improving the issue of phytosanitary access, economic cooperation, electronic commerce, customs benefits, among others”, explained Legarda.

That criterion is shared by the Executive Director of the Association of Ecuadorian Banana Exporters (AEBE) José Antonio Hidalgo and the President of the Ecuadorian Business Committee Miguel Ángel González, who also planned to speak on Tuesday afternoon and also highlighted the benefits of the agreement.

Hidalgo pointed out that it is a balanced and very well-negotiated agreement where all export and import products are taken into account through the space of the attached room. “We discussed there any sensitivity that may have existed, which was taken into account and which is reflected today in a balanced agreement.”

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González commented that the Business Committee led the fourth deputy, which is a private sector team that assists the negotiating team so that the agreement is signed in the best terms for Ecuador. “We are witnesses that the agreement was well negotiated. Properly negotiated trade agreements are the way to development. They open doors to possibilities. We support the signing of a trade agreement with China, but also with others. We have been insisting on a commercial opening for several years,” he emphasized.

Hidalgo pointed out that it must be taken into account that China is not a country of 40 years ago, which as a factory was focused on providing products that depended on cheap labor. “Today, the economic plans that are developed in China every five years have other priorities, and part of the cluster promoted by the Chinese government is the development of industries such as digital platforms that stimulate domestic consumption, the internal economy.”

For his part, González pointed out that the agreement with China was negotiated with regard to sectors that could be vulnerable. Because of this, 828 tariff items were excluded from the agreement, and the rest will be reduced within 15 years, which is why the domestic industry is cautious. He also pointed out that imports will also improve, which will make domestic production more competitive, and provide raw materials and capital goods at more favorable prices.

For Hidalgo, it is important that the fears disappear with the trade agreement because one must always look to the future. “Precisely because of the discussions or fears we had about the trade agreement with the European Union at the beginning, we entered the multilateral agreement three years later than our neighbors and because of that we lost close to 100 million dollars as a banana sector. late in those three years,” he said.

“The agreement with China protects the local market more than the one signed with the EU”

Legarda noted that even negotiations on a trade agreement with China allow for market protection more than negotiations with the (EU). “More exclusions, more time for tax breaks and what is reflected is a better outcome in the negotiations… Both are positive, but maybe because of the size of the trade, China is more relevant,” he said.

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The head of AEBE pointed out that the Chinese market represents an opportunity, since it has 1.4 billion inhabitants, a new consumer trend that has given way to the emergence of stores on the line. In addition, they have a deficit food balance. “Fruit consumption today reaches close to 60 kilograms per capita, with 60% of the fruit being imported, and Ecuador has only 1% of that market, which gives greater facilities for exporting products while reducing the customs burden, also hand in hand with the strategy of entering other additional products by opening their phytosanitary permits is a great opportunity for growth”, he emphasized.

Meanwhile, the former minister stressed that Ecuador needs to improve the competitive position of export products in foreign markets, including China, the main destination of non-oil exports. “There’s a lot to improve there, and this trade agreement has actually improved that,” he said.

Hidalgo also pointed out that China is the largest e-commerce market in the world and that today there is a favorable non-oil trade balance with China compared to 2019, which did not exist.

Finally, the President of the Business Committee added that Ecuadorian consumers will also benefit, as they will be able to get products at a lower price and with a greater variety. “This train cannot pass us. We need to sign the agreement and start working internally so that Ecuador can gain competitiveness and thus be able to take full advantage of the benefits of the trade agreement.”