The Committee on International Relations heard several business leadersand a former government official, about the possible effects which will bring to the country trade agreement with China, which must be ratified by the plenary session of the National Assembly in order to be implemented.

Most of the representatives spoke about uses in the medium and long term, and highlighted by figures increase in exports Ecuadorians. But that criterion was not shared by the spokesman for small and medium-sized enterprises (SMEs), who stated that yes there is concern in the sector for competitive disadvantages local industries against the Asian giant.

On Tuesday afternoon, the legislative committee received presentations Jose HidalgoExecutive Director of the Association of Banana Exporters of Ecuador (AEBE); Gustavo CaceresPresident of the Chinese Chamber of Commerce of Ecuador; Francisco Vergara, President of the Chamber of Small and Medium Enterprises Pichincha (Capeipi); Miguel Angel González, President of the Ecuadorian Business Committee; and Daniel Legarda, former Minister of Production in the government of Guillermo Lasso.

Hidalgo explained that currently Ecuadorian bananas pay a 10% duty. to enter China and according to the agreement the item will enjoy a progressive reduction until it reaches 0%.

“Our tariff is very high”, he pointed out and indicated that the reduction generates a great attraction for the company’s business. He also pointed out that currently Ecuador’s main competitor on the Chinese market, the Philippines, is going through a crisis due to the Fusarium race 4 fungus affecting their crops, which Ecuadorian producers must take advantage of.

The head of AEBE indicated that in the last three years the industry had exports fell from 31% to 38%. There is currently a recovery due to the problems facing the Philippines; However, due to customs barriers, Ecuadorian exports cannot grow further.

Hidalgo explained that the sector sells about 132 million dollars to China, but with a tariff of 0%. Exports could reach 350 million dollars in two years. “We might be thinking about a $500 million market for us,” he noted.

Gustavo Cáceres, for his part, pointed out that there is great growth potential for non-oil exports, especially for install products which do not currently enter the Chinese market.

He pointed out that exports to China amount to more than five billion dollars, because that country is the main destination for several domestic products, such as shrimp or bananas.

“Ecuador is considered a country that produces products of the highest quality”, he explained and pointed out that almost the same items have been exported for 25 years, since the absence of a trade agreement, with tariff preferences, makes it difficult for new products to find themselves on the shelves in that country.

In this regard, he pointed out that the agreement will provide preferential access for 99.6 percent of the current export basket. And it will allow the entry of items from various branches, such as frozen meat, dairy products, wine and sparkling wine, among others. He said There is a potential of $2.965 million in export growth.

In the same vein, Miguel Ángel González, representative of the Business Committee, commented that properly negotiated trade agreements are the path to development.

That sensitive sectors were considered in the negotiations, so 828 cases were excluded which will not enjoy tariff benefits.

The right thing is not to run away from the agreement, but the country must prepare and improve its competitiveness, González emphasized. “Agreements They force us to be more competitive. This forces us to make changes in the private and public sectors in order to be more competitive,” he said, noting that the agreements allow access to more products and better prices for consumers.

Three business leaders advocated for The National Assembly ratifies the agreement which Ecuador signed with China on May 10, 2023. They insisted that the negotiations achieved balanced results, protecting vulnerable sectors.

On the other hand, Francisco Vergara, a representative of small and medium-sized enterprises, expressed that the agreement of several companies producers will be harmed.

“Have concerns about the signature agreement. We who are in the manufacturing base are concerned,” said Vergara and mentioned that 2.5 million people depend on small and medium-sized enterprises.

He pointed out that the sector has been demanding that work be done for years competitiveness program, since it is difficult for a small or medium-sized businessman to export.

“Markets must be opened, we agree, but what will happen when some international products replace domestic ones”, he asked and indicated that Capeipio’s demands for the authorities are security, financing, technology and logistics.

The former Minister of Production replied that the agreement with China was better negotiated than the agreement with the European Union (EU), because more items were excluded.

“There will be no flood of products from China”, he explained. He showed official figures according to which 77% of imports from that country correspond to raw materials, inputs, capital goods and fuels; while only 23% are consumer goods.

He thereby asserted that domestic producers will benefit from the agreement because they will be able to obtain goods for production at more favorable prices, which will reduce their costs.

Daniel Legarda also specified that small and medium-sized enterprises are the protagonists of foreign trade. He said that 60 percent of the companies that export to China are from that segment.

“This is a state policy that corresponds to (the National Assembly) to give continuity,” insisted Legarda, who also stressed that trade agreements help to diversify production, but above all leave dependence on oil; For this reason, he said, it is urgently necessary for the parliament to make a decision in favor.

Tuesday’s speeches were the last to be received by the Committee on International Relations, which will now work on preparing a report to be presented to the plenary session for resolution..