Price reduction and more jobs, among the benefits that a trade agreement with China could bring to the common citizen

The trade agreement to be negotiated with China generates expectations in the export sector that sees this future agreement as an opportunity to enter a market of 1.4 billion people and more than a billion dollars in exports.

However, this sector is not the only one projecting the effects of this future treaty, which would be ready by the end of this year. Importers, medium and small merchants and consumers make calculations and measurements on how this commercial opening with the Asian giant will be reflected, taking into account that China is already the first supplier of Ecuador.

According to figures from the Ecuadorian Federation of Exporters (Fedexpor), Ecuador imported in 2021 from China $5,212 million in products, with a growth of 44% in value and 45% in volume compared to 2020 figures.

China and Ecuador begin to negotiate an FTA, with the signing of a memorandum of understanding

Among the products that stand out are machinery and electrical appliances with $913 million and a growth in imported volume of 29%. Machinery and mechanical devices with $909 million and a growth of 32%, vehicles and parts with $696 million, a segment that shows the greatest growth in imported volume with an increase of 88% in value and 66% in volume.

After China as suppliers, it is followed by the countries of the Andean Community ($ 2,810 million), the United States ($ 2,599 million) and the European Union with ($ 2,175 million).

To this, Miguel Ángel González, president of the Ecuadorian Business Committee and the Guayaquil Chamber of Commerce, He added that China is the second most important trading partner for Ecuador. He pointed out that trade (exports + imports) with the Asian giant in the last five years has registered an accumulated growth of 100%.

For the economic analyst Jorge Calderón, A large part of the imported products found in Ecuador are of Chinese origin, such as textiles, technology, vehicles, machinery and equipment, among others.

He assured that with the commercial opening, a greater variety of products with lower prices will arrive due to the reduction or elimination of tariffs, which will benefit the consumer.

Gonzalez agrees. He indicated that the benefits of a trade agreement with China for the consumer are multiple. On the one hand, the consumer will have access to a greater range of products from that country. Likewise, the products that it already consumes will see a price reduction due to the tariff reduction, confirmed the leader.

For the first time, Ecuador is the leading supplier of seafood to the Chinese market

“Among the products that we would see an improvement are vehicles, telephones, office equipment, food, among others,” he added.

Meanwhile, Calderón said that the effect for Ecuadorians will also come from the growth of Ecuador’s exports to China, which could generate additional jobs and also improve the trade balance with that country.

According to figures from Ministry of Production, Foreign Trade, Investments and Fisheries, the balance is in deficit $1,493 millionsince Ecuador exported a little more than $3.62 billion in products to China during 2021. These figures include mining exports that represent $851 million.

“By exporting, that exportable supply increases and with that, Ecuadorian companies, by selling more, will use more resources and more local raw materials and will employ more people to participate in that production process,” explained the expert, who assured that the treaty will help improve the purchasing power of Ecuadorians.

This coincided Iván Ontaneda, former Minister of Production and Foreign Trade, who assured that being the main products imported from China: raw materials and capital goods, a trade agreement with this country will reduce the costs of imports, improving competitiveness and access to better prices for many products for citizens of “a foot”.

“We must understand that Ecuador is a dollarized country, expensive to produce, expensive to live in, expensive to buy; it is time to give back a real and favorable purchasing power to people, to the people, and in this way help to have better access to products in quality and price”, analyzed Ontaneda, who asserted that opening the economy, generating more and better market for Ecuadorian production will always be beneficial because it helps the sustainability and productive growth of the country.

For example, he indicated that the agricultural sector has enormous potential to increase the products sold in China, favoring all the productive links that make each export possible, more production, more work and more dollars for the economy. (I)