Ecuadorian exports will arrive at better prices to the United Kingdom
Published on 18 July 2019
The ratification of tariff preferences for shipments has made it possible to prevent the truncation of the dynamics of shipments.
The departure of the United Kingdom from the European Union after the referendum that gave way to the process known as Brexit led those in charge of governing the Crown to take immediate action to ensure the commercial dynamics of their country. In the absence of new agreements, leaving the bloc implies the automatic disengagement of all terms of tariff liberalization between the countries of the old continent and its other trading partners.
For this reason, parallel to the main current problem that today makes it difficult to sleep in Downing Street, the treatment of the border with Ireland, have begun to ratify preexisting agreements. In this case, Ecuador, Colombia and Peru recently signed an agreement to fulfill this purpose.
In 2013, the European Union signed the granting of tariff preferences to these countries, but this stopped working after leaving the United Kingdom. The new ratification allows 95% of Ecuadorian products to enter without paying tariffs, which is particularly important if one takes into account that it is the sixth largest economy in the world, with a GDP of US $ 2.6 billion, and a of the 25 with the highest GDP per capita, with an approximate ratio of US $ 40,000.
In this way, Ecuadorian products will maintain the competitiveness that has allowed it to position itself in the British and Northern Irish markets. It is worth mentioning that these products have agricultural and fishing origins, so the link with the creation of labor in segments of high sensitivity to the passage from poverty to the middle class is important. The following tables show the performance of total exports throughout 2018 for the five main products, as well as the results accumulated up to May of this year.
As you can see, the evolution of the value of shipments in 2019 has been positive, exceeding by $ 16.1 million the figure reached in the same period of 2018. This suggests that it will be a good year for Ecuadorian exports to the United Kingdom and that it would have been a pity to truncate the dynamics by the interruption of tariff preferences.
Free trade benefits all citizens. It is not about cheapening imports to favor a particular country, but about benefiting consumers with access to lower-priced products (always with the prevention of checking that there is no dumping through undervaluation practices or subsidies), and the generation of employment by increasing the efficiency of the companies that generate it, which will be able to access their inputs and capital goods at a lower price. Ecuador maintains good conditions to continue growing based on its exports.