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TIC and treaty are crucial to recover the United States market
Posted On 02 Apr 2019
Ecuadornews:
There is concern in the export sector to complete the fourth consecutive year in which Ecuadorian non-oil sales to the United States, its main trading partner, fall by an average of 2%.
This is revealed by figures from the Ecuadorian Federation of Exporters (Fedexpor), based on the Central Bank of Ecuador, which show that exports totaled $ 2,536 million in 2018, 1.8% less than in 2017.
The Corporation for the Promotion of Exports and Investments (Corpei) indicates that in 2018 the export volume also dropped by 9%.
In the last 4 years, between 2014 and 2018, the decrease in average has been of 7.15% in values and 2.14% in tons, indicates the executive president of Corpei, Eduardo Egas.
The figures were exposed at the end of February by the Minister of Production, Foreign Trade, Investment and Fisheries, Pablo Campana.
The minister blamed the lack of competitiveness for the absence of a trade agreement with the United States, although he said that they are already working towards one, for the time being with the reactivation of the Trade and Investment Council (TIC) between both nations, whose second appointment was on November 15 in Washington, after nine years of inactivity.
Xavier Rosero, technical manager of Fedexpor, confirms that the main export products to that market fell in relation to similar products from competing countries with lower cost structures and commercial agreements that allow them to enter with 0% tariff.
He points out that by not having preferential treatment, the Ecuadorian exportable supply is being displaced by products from Colombia, Peru and Central America.
He adds that among the Ecuadorian products, with a traditional presence in the US market, which decreased are the banana that fell by 15%, shrimp by 8% and flowers by 5%.
Egas explains that in the case of shrimp, Ecuador lost market shares to India, due to its low production costs. In banana, with Guatemala, a country that offers cheaper fruit, also due to its low production costs and higher productivity per hectare.
He says that the roses lost competitiveness as well as the tuna pouch to end the unilateral ATPDEA scheme and have to pay tariffs.
Rosero recommends an aggressive agenda of recovery of business competitiveness that allows to boost production with an export focus, reducing production costs, tax surcharges, time and procedures, logistics and soft credit financing for exporters.
Externally, he recommends reinforcing the negotiations with the Trade Authorities to promote the bilateral relationship in the framework of the TIC, leading the process with the objective of signing a Bilateral Trade Agreement.
Egas reveals that at the TIC meeting scheduled for mid-2019 in Quito, the progress of the commitments made in November should be reviewed and new commitments defined.
He mentions that in order to ratify the interest of Ecuador, it is important that the country coordinates the work tables envisaged and advances in the fulfillment of the other commitments.
The tables that were established in November are Agricultural issues, Labor issues, Environmental issues, Intellectual Property, Investment, services and digital economy, and Customs, trade facilitation. For Egas, the agreement with the US It must take into consideration elements such as investments to advance industrial development.
Bilateral relationship Ecuador-USA
Commercial balance in favor: According to the Ministry of Production, Foreign Trade, Investment and Fisheries, the non-oil trade balance with the United States showed a deficit behavior up to 2013, inclusive. In 2016, the surplus exceeded $ 800 million. In volume, positive results were recorded, except for the year 2013.
Best commercial partner: In the first four years (2007-2010) the non-oil exported to the United States constituted 22.6% of exports to the world, in the last four years (2013-2016) it was 25%. (I)
