In Ecuador, the dissolution of its National Assembly leads to delay of FTA begin with China

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The banana industry and the other sectors of Ecuador did their research and came up with the free trade agreement (FTA) which was signed by the country with China and now will have to wait a bit longer time before enjoying the advantages. The delay is due to Ecuador’s president Guillermo Lasso dissolved the National Assembly on May 17, 2023. He also brought in elections in order to stop an attempt by opposition parties to impeach the president. This National Assembly is needed to accept the deal. The proposed FTA which was concluded with China on the 10th of May, 2023 will have prices on bananas reduce by 1 percent per year for 10 years, from 10% to percent to zero tariffs.


The digital FTA signature ceremony took place in between Ecuador and China during May.

The application of the FTA that took several years to negotiate, is affected by political developments that are taking place in Ecuador. Jose Antonio Hidalgo, Executive Director of the Association of Banana Exporters of Ecuador (AEBE): “Right this moment, the General Assembly is dissolved. It is now time to await an entirely New National Assembly, which will form later in the year, maybe around October. We will then go through the steps to ratify and approve the treaty into law for it to commence. The FTA as a long-term plan. Once we have reached the age of 10 years, we’ll be able to see better growth within that China market.”

Ecuador’s Banana Marketing and Export Association (Acorbanec) said that, at the moment, Ecuador entered a position that is advantageous. This may lead to an rise in the amount of fruits in addition to taking over different markets within the Chinese area, considering that currently Ecuador is the fourth source of bananas for the world, a position that is surpassed by Philippines, Vietnam and Cambodia. Based on data provided by the TradeMap General Customs Administration of China In 2022, Ecuador delivered just under 200,000 tonnes, which amounts to 11.05 percent of all the fruit exported by the Asian country.

Richard Salazar, executive director of Ecuador’s Banana Marketing and Export Association (Acorbanec) states: “It represents a unique chance that could let China to be one of the primary transportation destinations for the fruits in the future. The expectation for exports is to quadruple or even triple quantities of fruit exported in 2022.”

Another country that has devastating import tariffs of 30 percent are South Korea, which is the next priority for Ecuadorian officials to ease trade conditions. The top Ecuadorian Asian export destinations are China which receives 1.8 million boxes. South Korea receiving 125,000 boxes, Japan receiving 778,000 boxes, Singapore only 3,240 and Taiwan not receiving anything until the end of February 2023.

Hidalgo states that they are cooperating with Ecuador’s government. Ecuadorian government to improve trade circumstances for South Korea. “We would like to collaborate to finalize the Korean trade agreement, and we would like to see if in the future we will be able to start by working with Japan.”

For further information, click here.

Jose Antonio Hidalgo,

AEBE

Tel: +593 96 402 9141

Email: communications@aebe.com.ec

www.aebe.com.ec

Richard Salazar

Acorbanec

Tel. +593 42136348

Email: rsalazar@acorbanec.com

www.acorbanec.com

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