FILE PHOTO: Ecuadorian President Guillermo Lasso speaks at the inauguration of an extended marine reserve that will encompass 198,000 square kilometers (76,448 square miles), aboard a research vessel off Santa Cruz Island, in the Galapagos Islands, Ecuador January 14, 2022. REUTERS/Santiago Arcos/File Photo
February 6, 2022
By Alexandra Valencia
(Reuters) – Ecuador is expecting a planned trade deal with China to increase commerce between the two countries by about 35%, though the South American country will seek to protect some local industry, Exterior Commerce Minister Julio Jose Prado said on Sunday.
The two countries on Saturday said they would seek to reach a trade deal by the end of the year. The announcement was made during a state visit to China by Ecuadorean President Guillermo Lasso.
China became Ecuador’s top lender over the past decade, with millions of dollars in long-term credit tied to the handover of crude oil, large investments in hydro-electric and mining projects and other loans. China is a leading buyer of Ecuadorean products including shrimp and bananas and a major importer to the Andean country.
“There will be an increase of trade with China of at least 30% to 35% of what we have today,” Prado, accompanying Lasso on the trip, told Reuters in a video call from Beijing. “It is an accord with a broad reach. … It will cover intellectual property, public purchases, commercial defense.”
Though Ecuador will seek to reduce tariffs on products shipped to China to a minimum, it will also look to protect local industries including steel, textiles, shoes and assembly works that are sensitive to competition from imports, Prado said.
“For those products we would need to seek large tax exemption periods to allow the industry to be more competitive, to reinvent,” Prado said.
Some products may also be excluded from the deal, he said.
“Having the formal trade deal will make the rules of the game for imported products clearer,” Prado said.
Non-oil Ecuadorean exports to China between January and November last year totaled some $2.8 billion, while imports in the same period totaled $3.96 billion, according to the central bank of Ecuador. Ecuador’s oil exports to China are tied to debt re-payments, which Lasso is seeking to renegotiate.
Ecuador also expects to sign trade deals with Mexico, South Korea and the Dominican Republic this year, Prado said. It also is seeking a trade deal with the United States, Prado noted.
“Ecuador needs to open itself to the world, it needs to open itself to the United States, and we’ll keep seeking that deal long-term,” Prado said. “While that progresses, it’s necessary to look to Asia in the same way we’ve looked previously to Europe.”
(Reporting by Alexandra Valencia in Quito; Writing by Julia Symmes Cobb; Editing by Will Dunham)
