On January 2, China and Ecuador celebrated the 45th anniversary of their diplomatic relations, marking a significant milestone in their enduring partnership. President Xi Jinping highlighted the importance of this relationship in his congratulatory message to Ecuadorian President Daniel Noboa, emphasizing it as a new starting point to elevate their collaboration.
Over the past 45 years, Ecuador has benefited from its cooperation with China in various sectors, leading to economic integration and prosperity. This longstanding relationship exemplifies how win-win cooperation can thrive even amidst a globally polarized landscape.
The Free Trade Pact
The cornerstone of this enhanced partnership is the free trade agreement (FTA) signed in 2023, which aims to gradually eliminate tariffs on 90 percent of traded items. As of May 1, 2024, tariffs on approximately 60 percent of these items were removed immediately upon the agreement's implementation.
The FTA grants Ecuador greater access to China's expansive market and its vast consumer base. As a major exporter of agrarian products, Ecuador's export portfolio, which accounted for 42 percent of its exports in 2024, includes bananas, shrimps, fish, fish oil, cocoa, and coffee. The tariff reductions are set to significantly boost these exports, while also allowing Quito to diversify its global and regional trade partnerships and strengthen its domestic manufacturing and industrial sectors.
Long-term economic stability is crucial for Ecuador, and the FTA provides a buffer against fluctuations in consumer demand from any single region. This diversification helps mitigate economic vulnerabilities and supports sustained growth.
Furthermore, the FTA facilitates access to Chinese machinery, raw materials, and technology transfers, enhancing Ecuador's developing manufacturing sector. This cooperation is expected to reduce production costs, develop a robust industrial base, improve technological capabilities, and increase competitiveness. In the long run, these advantages will help Ecuador navigate economic challenges, such as debt management and implementing necessary reforms.
China's vision for increased globalization and cooperation among Global South countries positions Ecuador to integrate more deeply into the global supply chain. With China's expanding role in global manufacturing, Ecuador stands to gain from increased export opportunities, job creation, and a strengthened industrial sector, essential for regional and international competitiveness.
Environmental sustainability is another key benefit of the FTA. The agreement fosters collaboration on sustainable practices in industries like agriculture and mining, allowing Quito to adopt China's advancements in renewable energy, organic farming, and building environmental resilience.
Reference(s):
cgtn.com
