China trade pact seen lifting Ecuador

A free trade agreement between Ecuador and China will give the Andean country's economy a boost, experts said.

"To promote products such as shrimp, bananas and other fruits, we need this trade agreement," said Jose Antonio Hidalgo, executive director of the Association of Banana Exporters of Ecuador.

A country of nearly 18 million people, Ecuador is keen to deepen links and expand opportunities by working with the Chinese market. Sectors such as the one that Hidalgo represents have a profound impact on the economy of the small South American nation.

Ecuador's Exterior Commerce Minister Julio Jose Prado said an FTA with China could increase trade by about 35 percent.

"By improving the competitiveness scheme, we can double our position in China," said Hidalgo, talking about Ecuador's banana exports to China.

"In 2020, our position (in the Chinese market) was worth $156 million, but in less than two years we can (boost it to)$315 million with the signing of the agreement," he said.

Non-oil exports to China between January and November 2021 reached $2.8 billion, whereas imports totaled $3.96 billion, according to Ecuador's central bank.

The Ecuadorian government led by President Guillermo Lasso is moving quickly to ink the free trade pact with China.

In February, Lasso visited Beijing to attend the opening ceremony of the Winter Olympic Games. During the trip, he signed a memorandum of understanding to advance talks toward an FTA, which could conclude by the end of this year.

"Since 2021, when the Lasso government took office, the team led by the minister of foreign trade has shown a unique way of working, very open-minded, to fulfill the legacy of more Ecuador in the world and more world in Ecuador," said Gustavo Caceres, president of the Ecuadorian Chinese Chamber of Commerce.

"This is an opportunity for Ecuador to offer more of what it has, and what China needs."

Food and agricultural product suppliers are likely to benefit most from an FTA with China. Shrimps, bananas and other fruits, as well as flowers, are some of the key sectors that are expected to be highlighted in the agreement.

"We've got an excess of production of fruits such as dragon fruit and China will be a key export destination for this fruit," Caceres said. Pineapple trade could also benefit, as Ecuador is the top producer of the fruit in South America.

"For small countries like Ecuador, opening to the world for export is important," said Pablo Lucio Paredes, director of the Institute of Economy at the San Francisco University of Quito.

"More foreign trade for small countries is a net benefit for society. Overall, it is positive for Ecuadorian society."

Seafood is another sector in Ecuador that could benefit from an FTA with China. Last year, Ecuador became China's main seafood supplier, with exports rising 27 percent.

The writer is a freelance journalist for China Daily.