Prices of 1,300 European products drop in 2022 as more tariffs are eliminated or reduced
As the trade agreement between Ecuador and the European Union (EU) enters its sixth year, consumers will see the elimination or reduction of tariffs on 1,300 products.
Among products that will be cheaper in 2022 are food items, health and pharmaceutical products, industrial machinery, cars, trucks, farm equipment and clothing, according to Xavier Rosero, executive vice president of the Federation of Exporters of Ecuador. “The tariff reductions are gradual over a 10 year period so most of the price drops will not be dramatic,” he says. “A few items saw an immediate elimination of tariffs at the beginning of the agreement, such as liquor, but for others, like automobiles, import fees are eliminated year-by-year over 10 years.”
Among European foods that will cost less are cheeses, olive oil, cured ham, olives, canned goods, dried fruits, nuts and crackers and cookies. “This is significant since many of these products were priced out of reach of Ecuadorian shoppers before the agreement took effect,” Rosero. “Today, they are widely available in local supermarkets and because they are recognized for being superior in quality, consumers are eager to buy them.”
Rosero says that the market share of European-made cars and trucks could reach 10 percent in 2022, up from less than three percent at the start of the trade agreement. “Vehicles have already seen a price reduction of as much as 35 percent since 2015 and this will increase to 45 percent, adjusted for inflation, by the time the trade deal is in full effect in four years. This is especially impressive considering the rapid sales growth of Chinese and Indian vehicles in Ecuador, since they sell for 20 to 30 less.”
Among other products that will benefit from tariff reductions in 2022 are toys, musical instruments, textiles, perfumes and bicycles.
Ecuadorian manufacturers, agricultural interests and fisheries are also benefiting from the trade agreement, Rosero says. “Through October of 2021, the country shipped $2.8 billion in products to Europe, which is a 14 percent increase over 2020,” he says. “We benefited, of course, from recovery from the pandemic but more than half of the increase is due strictly to the tariff reductions. The major exports from Ecuador to the EU are shrimp, bananas, tuna, cocoa and flowers and we expect a continued upward trend for all of these products in 2022.”
He added that there are emerging product markets that will benefit Ecuadorian interests. “One of them is coffee. This is currently a niche market but production and exports are expected to increase rapidly in the coming years as Ecuadorian coffee is becoming recognized as some of the best in the world.”