Economy

Declining exports raise concerns over Ecuador-China Free Trade Agreement

Flagship exports like shrimp and bananas have faced setbacks due to phytosanitary restrictions, weak Chinese demand and persistently low prices.

During a plenary session of the National Assembly of Ecuador, civil society activists hold posters expressing opposition to the approval of a free trade pact with China. [Ecuador Today]
During a plenary session of the National Assembly of Ecuador, civil society activists hold posters expressing opposition to the approval of a free trade pact with China. [Ecuador Today]

By Catalino Hoyos |

QUITO -- Ecuador's exports to China experienced a significant downturn in 2024, despite the Free Trade Agreement (FTA) between the two nations coming into effect on May 1 of that year.

Contrary to optimistic projections, the trade pact coincided with a notable decline in exports.​

A mid-February report by the digital outlet Primicias, citing data from the Central Bank of Ecuador, revealed that Ecuador's non-oil exports to China fell to $5.09 billion in 2024, marking about a 10% decline from the $5.67 billion recorded in 2023.

In May 2024, the month the FTA took effect, exports to China plummeted by 23% compared to the same period in 2023, further underscoring the deal's underwhelming impact.

Shrimp are sold at the Playita Mia market in Manta, Ecuador. [Rodrigo Buendia/AFP]
Shrimp are sold at the Playita Mia market in Manta, Ecuador. [Rodrigo Buendia/AFP]

Unfulfilled expectations

Despite expectations of increased trade, China reduced its purchases from Ecuador, and Panama overtook it as a top destination for Ecuadorian exports.

Sales to Panama surged to $6.29 billion, a 40.5% increase from 2023, surpassing both China and the European Union as leading buyers of Ecuadorian goods.

Key exports like shrimp and bananas have struggled due to phytosanitary restrictions and weaker Chinese demand, while other markets have either maintained or increased their purchases.

Compounding the issue, China's General Administration of Customs suspended exports from nine Ecuadorian shrimp farms between February and early June 2024, citing alleged detections of metabisulfite levels exceeding permitted limits, Primicias reported.

This led to a 27% reduction in shrimp export volumes to China during the first quarter of the year. Although these companies regained access to the Chinese market by June 6, the suspensions had already inflicted substantial economic losses, according to an article by America Economía outlet published in June 2024.

The FTA between China and Ecuador attracted criticism from various sectors, particularly environmental advocates and certain lawmakers who argue that the agreement poses significant environmental risks.

In Latin America, China has FTAs with Chile, Costa Rica, Ecuador, Nicaragua and Peru.

Trade between China and Latin American countries with free trade agreements (FTAs) is largely driven by the exchange of raw materials for manufactured goods, reflecting a pattern of resource extraction and industrial imports.

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