The government aims to expand its record of successful trade agreements by including three new countries on its list, which already features China, Costa Rica, and South Korea.
Over the past two years, the government of Ecuador has been working to promote foreign trade as a key driver of economic growth and development. The country has pursued an ambitious trade agenda, which aims to deepen its commercial ties with major trading partners around the world.
One of the countries on Ecuador’s trade agenda is Canada, with whom it currently has a negative trade balance. The government expects to begin negotiations for the trade agreement with Canada between May and June 2023.
“We are in the last preparatory phase. It will be a long and broad agreement to negotiate,” said Julio Prado, Minister of Production.
Canada is an important market for Ecuadorian exports, particularly for mining products and cocoa.
In 2022, the value of exports to Canada reached $297 million, while imports amounted to $794 million.
The largest export market to Canada is for mining products, with 20,097 tons exported in 2022, for a value of $115 million.
The second export most exported product to Canada is cocoa, with 19,993 tons shipped in 2022, equivalent to $44.8 million.
The vice president of the Ecuadorian Federation of Exporters, Xavier Rosero, stresses that Ecuador’s interest is to reach a full-scope Free Trade Agreement with Canada. However, the conditions are yet to be defined.
Rosero adds that the export sector is interested in opening or expanding the Canadian market for products such as canned fish, fresh fruit, and flowers.
Central American partners
Ecuador also plans to start negotiations with two Central American countries, Panama and the Dominican Republic.
With Panama, the government plans to negotiate a partial scope agreement, where only market access will be negotiated. The Government has already begun an “exchange of information” on the agreement, although negotiations have not yet formally begun, Minister Prado clarified.
Negotiations are expected to start with the Dominican Republic in mid-May 2023.
Panama is an important market for Ecuadorian manufactured goods. Ecuador’s manufacturing sector has been growing rapidly in recent years, driven by strong demand from regional markets such as Central America and the Caribbean. Among the products that could benefit from a trade agreement with Panama are freight elevators, fruit pulp, dairy products, and frozen preserves.
The Dominican Republic is a niche market for premium segments, but it could offer opportunities for Ecuadorian exporters of exotic fruits or superfoods, such as blueberries, chia, amaranth, and their derivatives. Exports of manufactures, such as wood, white goods, or ceramics, could also grow in this market.
Multiple new trade agreements
With these agreements, Ecuador aims to advance its foreign trade agenda, whose most important achievements have been the signing of the trade agreement with Costa Rica, on March 1, 2023, and the technical closure of the agreements with China and South Korea.
Currently, 60% of Ecuador’s export products pay tariffs to enter other markets. The government’s objective is to achieve the greatest commercial opening for these products. By negotiating trade agreements with key markets around the world, Ecuador hopes to increase its exports, create new jobs, and promote economic development.
In addition to trade agreements, the government of Ecuador is implementing a series of measures to promote exports, such as the simplification of administrative procedures, the promotion of value-added products, and the establishment of trade offices in key markets around the world.
These measures aim to make it easier for Ecuadorian exporters to access international markets and to compete with other countries that already have established trade agreements in place.
Overall, the trade agreements that Ecuador is seeking with Canada, Panama, and the Dominican Republic represent an important opportunity for the country to expand its commercial ties and to promote economic growth and development.
These agreements could benefit a wide range of sectors, from mining to manufacturing, agriculture, and tourism. As such, they represent an important step forward in Ecuador’s efforts to become a more competitive and integrated player in the global economy.