The term globalization refers to the integration of national economies into the international market, especially the exchange of goods and financial flows. We are currently experiencing a change in the original appearance of globalization, due to the predominance of geopolitical interests affecting the production chain.

Former US President Donald Trump began to distance himself from globalization and promote the principle of “America First”. He decided to impose sanctions on China for “national security” reasons, weakened the World Trade Organization and halted negotiations on trade agreements with several countries, including one that Ecuador was pursuing.

In less than 40 years, China has become the “factory of the world” where developed countries have set up their factories in order to export much cheaper products to their markets. The social and therefore political cost is what has changed the attitude of the United States in relation to globalization. President Joseph Biden’s administration followed that line for electoral motivations.

The possibility of worsening Sino-American geopolitical rivalry threatens production and supply chains, which is why today we are witnessing the migration of these investments from China, to what is called “near shoring”, which refers to the departure of production from China. China and the search for countries where facilities can be relocated to ensure the supply of goods and services. Destinations with comparative advantages are becoming more and more appreciated, such as geographical proximity to markets, port logistics capacity, the possibility of employment for large sectors of the population that are currently unemployed, the use of market access facilities and good public and private sector receptivity to foreign investment.

Ecuador has a great opportunity if it takes advantage of this geopolitical circumstance and acts quickly in a public-private partnership. First, a trade deal with China will provide a major boost to the nation’s exports to a vast market of 1.3 billion consumers of food, minerals and other things, creating jobs for hundreds of thousands of Ecuadorian families. The US, in the face of this expansion, also offered a system of preferences which, although more limited than a trade agreement, allows new national products to enter their market.

Second, Ecuador must launch a campaign to attract companies that are relocating their plants from Asia, which would also increase the number of jobs and provide better days for those without work.

In conclusion, Ecuador must initiate an intelligent and strategic foreign and trade policy to achieve these goals. It is not necessary to take sides in this geopolitical dispute, but it should be used by putting the interests of Ecuador before the interests of other countries. (OR)