LatinNews Daily - 11 May 2023

ECUADOR: FTA signed with China

On 10 May, Ecuador’s government signed a free trade agreement (FTA) with China.


The signing of the FTA was a rare boost for President Guillermo Lasso as he prepares to face an impeachment vote which could be held as early as next week. Lasso put an FTA with China at the centre of his foreign policy goals, and the agreement was reached after just 10 months of negotiations. The FTA contains provisions to protect some vulnerable Ecuadorean sectors, such as the textile industry, from being swamped by cheap Chinese imports, while enabling the vast majority of Ecuadorean exports to enter China tariff-free. Nevertheless, concerns are likely to be raised about the absence of clauses in the FTA on environmental standards, labour rights, or intellectual property rights.

  • The FTA was signed at a ceremony in Quito by Ecuador’s minister of trade, production and fishing, Julio José Prado, and China’s trade minister, Wang Wentao. Prado described it as “the most important trade agreement that Ecuador has signed,” saying that “it will change the way that the country produces – we must prepare to send more products to China”.
  • The FTA will enable 99.6% of Ecuador’s exports to enter China tariff-free, and will expand Ecuador’s China-bound exports to include dairy products, pork, chicken, pineapple, mango, blueberries, processed foods, among others.
  • Tariffs will be lifted on roughly 90% of Chinese imports to Ecuador, although they will be maintained on products such as textiles, tiles, tyres, furniture, sugar, rice, milk, potatoes, and corn.
  • Chinese technology exports such as computers and mobile phones will not be subjected to any tariffs, in a move which the Lasso administration has said will help modernise Ecuador’s economy.
  • Lasso framed the signing of the FTA as the culmination of his government’s increasing closeness to China, highlighting Chinese assistance to Ecuador during the coronavirus (Covid-19) pandemic. He said that the FTA would enable Ecuador to “match the competitiveness of countries in Latin America which already have a bilateral agreement with China”. Ecuador is the fourth country to have inked an FTA with China, after Peru, Chile, and Costa Rica.

Looking Ahead: Lasso said that the FTA is expected to boost exports to China by an additional US$3bn and US$4bn by 2030.

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