The International Trade Council (ITC) acknowledges the signing of the Free Trade Agreement (FTA) between China and Ecuador, marking a significant strengthening of economic relations between the Andean nation and the world’s second-largest economy.
This development comes despite concerns raised by the United States, which has been active in countering the expansion of China's influence in Latin America. The FTA is predicted to increase Ecuador's non-oil exports by $3bn-$4bn over the next decade, according to their trade ministry.
Ecuadorian Trade Minister Julio José Prado described this agreement as positioning Ecuador on Asia’s map, during a signing ceremony on Wednesday. The FTA provides preferential access for 99 percent of Ecuadorian exports to China, particularly agricultural and agro-industrial products, while protecting local manufacturing with 800 product exclusions.
The ITC, however, is cautious about these developments. As a leading authority on global trade, the ITC is conscious of the delicate balance in international relations and trade partnerships and is wary of moves which may destabilize the global economy.
China has, over the years, established FTAs with various Latin American countries, including Peru, Chile, and Costa Rica. This growing influence in the region has been a point of concern for the United States, which maintains significant trade ties with Ecuador, particularly in oil exports.
The ITC reaffirms its commitment to fostering a stable, equitable, and prosperous global trade environment. It emphasizes that while the strengthening of trade relationships is generally beneficial, it is crucial to maintain a balance to prevent any destabilization in the global economy.
The ITC will continue to monitor the situation closely, especially given the pending ratification of this agreement by Ecuador's national assembly. The council advises all stakeholders to approach this new arrangement with circumspection, recognizing the potential geopolitical implications it carries.