Commercial agreement with EFTA benefits 99% of shipments

Ecuadornews:

Ecuador closed on Wednesday, April 25, 2018, in Brussels the negotiations of the trade agreement with the member countries of the European Free Trade Association

The next step will be to sign the agreement, which is expected by June 2018. The Minister of Foreign Trade and Investment, Pablo Campana, through his Twitter account explained that the country’s products may enter with a zero tariff to a market of 12.5 million people.

The country expects to increase shipments to the nations that make up this block: Switzerland, Norway, Iceland and Liechtenstein.

According to figures from the Central Bank of Ecuador the trade balance with EFTA is negative, that is, the country sells fewer products than it imports.

93% of all shipments from Ecuador are non-oil products. On average, in the last 10 years, these exports to the bloc totaled USD 50 million. But since 2014 they started falling until they touched a floor of USD 27 million last year. However, it is a complementary market for the country and with great potential.

This agreement will benefit a portfolio of important products for the country, such as: natural flowers, bananas, tuna and fish oil, said Daniel Legarda, president of the Ecuadorian Federation of Exporters (Fedexpor).

Of the block, on the other hand, the country imports mainly medicines, vaccines, plasmas, immunological products, machinery and its parts, substances to elaborate beverages and supplies for the industry.

In 2017, purchases to that block reached USD 112 million. 99% of the country’s exports, basically agricultural and fishing, will be duty-free to the EFTA. Immediately upon the entry into force of the Agreement, once it is signed, products such as bananas, tuna, shrimp, bananas, flowers, panela, quinoa, mango, pineapples, pitahaya, tropical fruit juices, hearts of palm, asparagus, crude oil de palma and others will enjoy the preference of a total exoneration of liens.

The country’s manufacturing industry will also enjoy 100% tariff preferences immediately, opening opportunities for products with higher added value. Sacharose is a national company that exports roses for a decade to markets such as the United States, Holland and Russia. Its director, Guillermo Bustamante, says that so far the Scandinavian countries had not been a main destination for the tariff issue. But with the agreement the EFTA becomes an interesting panorama, he says, because the income per capita is high and the flowers, which are a sumptuous product, are of relevance.

“Any developed country is a good market,” said the businessman. The company sells USD 500 000 a year and 70% corresponds to Europe. For Bustamante, expectations are now for growth and diversification of destinations.

According to Richard Salazar, administrator of the Banana Marketing and Export Association (Acorbanec), the fruit currently pays 25% of the tariff to enter the EFTA market, unlike other countries in the region that do not cancel.

This sector currently exports 2,400 boxes per week to these destinations. With the agreement, the figure could grow to 150,000, according to Salazar. The country would be “on an equal footing” with the main competitors, such as Colombia and Central America. Specifying the trade agreement with EFTA was a request from the fishing sector.

The director of the Ecuadorian Chamber of Tuna Industrialists and Processors (Ceipa), Mónica Maldonado, said in recent days that the agreement will allow shipments to increase by 25%. An additional benefit is that the agreement contemplates the elimination of the specific requirements of origin (REO).

The shrimp, nowadays, enters the EFTA with 20% tariff. Despite this, it has increased its exports by USD 30 million during 2017, in relation to the previous year, said the president of the National Chamber of Aquaculture (CNA) José Antonio Camposano.

Once there are no tariffs, greater dynamism is expected in the shipments. The president of Fedexpor considered that the announcement of the closure is positive and stressed that, once the agreement is signed, other state agencies should streamline the processes to ratify the agreement.

The Foreign Trade Council (Comex), the Constitutional Court and the Assembly must revalidate the text in the country. According to the Government, in the terms of the agreement mechanisms are envisaged to protect national, agricultural and industrial production. (I)

Source: http://www.elcomercio.com/actualidad/acuerdo-comercial-efta-beneficio-ecuador.html