China has replaced the U.S. as Ecuador’s top trading partner, according to the Ministry of Foreign Trade. “Based on recent trends, this change was inevitable and follows a pattern we are witnessing throughout Latin America,” says Vice Minister for Trade Daniel Legarda.
The change is based on non-oil exports, most of which are repayment for loans Ecuador has with Chinese banks. “If you include oil exports, China has been the number one trade partner since 2016,” according to Legarda.
According to a report released by the ministry, total non-oil trade between China and Ecuador amounted to $2.35 billion through the first five months of 2022 compared to $1.8 billion for the U.S. Trade with the European Union totaled $1.68 billion during the same period followed by $405 million with Russia and $393 million with Colombia.
According to Legarda, trade with China increased by 110% in the first five months of 2022 compared to growth of 16% with the U.S. “This is a remarkable discrepancy given that the U.S. has been our number one trading partner for almost a century,” he said. “We believe this gap will continue to widen as more trade markets open between China and Ecuador.
“The reason for this change and for the fact that the trend will continue is that there are fewer barriers for Ecuadorian products in China and for Chinese products coming to Ecuador,” Legarda said. “Although we eventually expect favorable outcomes in our trade talks with the U.S., there are many obstacles to overcome. Meanwhile, we are encountering much less resistance in discussions with the Chinese.”
According to the trade ministry, shrimp, bananas, canned goods, lead, copper and flowers are Ecuador’s top non-oil exports to China, with exports of shrimp and other seafood growing by more than 100% in 2022 compared to 2021, and lead and copper exports growing by 84%.
Legarda says he expects the EU to surpass the U.S. as the number two trading partner within one to two years. “Because of the trade agreement we signed with the EU six years ago, we are seeing rapid growth. There are are still restrictions on several imports and exports that were built into the original agreement but most of these will phase out by 2024.”
He added that South Korea could soon displace Colombia as the fifth largest trading partner. “Out talks in Quito and Seoul have been very productive and a number of markets will soon open for both parties.”