Ecuador: Proposed FTA with China promises to strengthen agricultural exports but risks driving away local manufacturers reeling from pandemic
"Ecuador’s proposed FTA with China generates opportunities and concerns" 16 March 2022
Ecuadorian president Guillermo Lasso brought back two pieces of good news from his trip to China this past February. Not only did the Asian country express a favourable position on renegotiating Ecuador’s outstanding bilateral debt, which amounts to US$4.6 billion, but the two countries also kicked off negotiations for a free trade agreement (FTA). Across Latin America, only Peru, Chile and Costa Rica currently have FTAs with China. [...]
Cáceres told Diálogo Chino that a trade agreement with China is key for agricultural exports to take off. However, he says that such a treaty should be thoroughly analysed and “socialised” – to understand and accept its wider sociocultural consequences – in order to protect other productive sectors that could face tough competition from Chinese counterparts. [...]
Certain industries, such as textiles and footwear, may need extra protection and Lasso assured that, if an FTA is signed, trade liberalisation would be gradual, to give local producers a chance to increase their competitive capability as the market opens up. “We are definitely going to protect [these sectors],” he said. [...]
Risks for footwear
Lidia Villavicencio, president of Ecuador’s National Chamber of Footwear (CALTU), told Diálogo Chino that the organisation will closely analyse the sector’s situation and the potential impacts of an FTA with China.
Expectations and concerns in this sector – upon which 118,000 jobs directly depend, according to Villavicencio – centre on fears they will not be able to compete on price with Chinese products, as well as the overall health of the industry following its troubles during the pandemic. For this reason, Villavicencio believes that tariff reductions should be one protective measure. [...]