Ecuador and Europe: benefited with the commercial liberation

Published on 25 April 2018

The lifting of tariffs through the signing of treaties accelerates the economy and ensures better procedures. Ecuador does not seem to be the exception.

In January 2017, the Trade Agreement Ecuador - European Union came into force. This ensured the immediate liberalization of 99.7% of the historical exportable supply of Ecuador in agricultural products and of 100% of Ecuadorian industrial products, and so far has significantly contributed to boost the commercial movement between the South American country and the main ones. European economies.

In the following table, you can see the evolution of the number of shipments to and from Ecuador with respect to the block. It is taken as a reference to Holland, France and the United Kingdom, three of the most important destinations for exports to the old continent, especially in agricultural and fishing products. In particular, it is important to highlight the port of Rotterdam as the gateway, which leads the Netherlands to be the country with the most movement among the chosen ones, with a total of 103,320 shipments in 2017, compared to 8.55645 in the United Kingdom. and 92,582 from France.

Dentro del movimiento comercial con cada país, en el caso ecuatoriano sobresale el flujo de importaciones desde Reino Unido y Francia, que subió en 19% y 15% en un solo año en términos de movimientos, respectivamente. Desde el lado de las exportaciones, Destaca Reino Unido, con una subida de 9%. Es importante notar que este incremento muestra la ventaja de abaratar los bienes importados, tanto para el consumidor, como para las industrias que ven abaratados sus costos y pueden, finalmente, alimentar el círculo virtuoso de eficiencia que termina en menores precios. En el lado de las exportaciones, sin embargo, el proceso de aceleración es más complejo, debido a que se debe preparar la oferta y cumplir con ciertos requisitos para lograr entrar al mercado.

Despite the difficulties that may arise from complying with its demanding regulation, the countries of the European Union offer an important opportunity to diversify the portfolio in large markets. For this reason, a large number of European countries occupy the first places in the rankings of destinations of the main Ecuadorian export products. Let's review the cases of three of the most outstanding products of the export portfolio.

Perhaps the best way to represent the importance of European destinations for Ecuadorian exports is to highlight the fact that, despite appearing close to the 20th place in the list, the value of shipments reaches tens of millions of dollars. However, segmentation by destination hides the large volume that the European Union as a whole represents as a destination, and at the same time notes the complexity of the commercial strategy to enter these markets, given that specific proposals must be made for each market.

However, here comes to light the last point to highlight regarding the qualities of multilateral trade agreements: homologation. The fact of complying with the entire European Union allows access to each of its markets with a more standardized procedure, given that the regulation is shared. Incidentally, this is a demanding regulation that pushes to improve practices to minimize environmental impact, provide traceability to funds, and improve the safety of products.
In conclusion, signing a trade agreement not only brings tangible benefits, but also improvements in the functioning of governments and companies. The road that opens is much faster than the protectionist stalemate, in a world that requires ever greater adaptation to be able to supply the citizenship and reduce entry barriers to higher levels of life.
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