FTA with China is beneficial for Ecuador


Vicente Wong, CEO of Reybanpac, a leader in the production and export of bananas in Ecuador, has no doubt that the Free Trade Agreement (FTA) between Ecuador and China is beneficial agreement for the Andean country.

Over the past two decades, China has experienced sustained economic growth, averaging 6.6% annual gross domestic product (GDP). This growth, which peaked in 2007 at an impressive 14.4%, has cemented China as one of the world's leading economic powers. Over the past three years, China has become Ecuador's main export market and arguably the largest importer of Ecuadorian products in the past seven years. Despite a deficit of about $350 million last year, a balance has been achieved thanks to the growth of other products such as shrimp, fisheries, bananas, and flowers.

"This relationship is very important for the country today and I believe it will continue to be so in the years to come. This trade agreement with China will allow us to have a potential of more than 6,000 new products that will be able to access a market as important as China," said Wong. Reybanpac, along with its parent company Favorita Fruit Company, has been operating since 1977, exporting bananas both locally and internationally. It began exporting to China in 1983 with 10,000 tons and is currently the largest producer and second largest exporter of bananas. Under Wong's leadership, Reybanpac has obtained certifications such as GLOBALG.A.P. for its plantations and has recently achieved carbon neutral product certification for its banana operation, from its cultivation to the port of shipment.

Wong highlighted the importance of the FTA with China, since it will allow the immediate entry of 60% of items, while others will be tax-free within a period of ten years starting in May. Currently, bananas pay around 10% and will be taxed by 1% less each year until they reach zero.

The agreement considers those sensitive markets and products related to textiles, metalworking, ceramics, and white goods, and provides for a period of 20 years. In addition, the agreement will have several instruments to deal with the issue of dumping and, in the event of any situation that arises, it can be stopped at a certain time.

"It's a well-balanced deal, beneficial to the country and with a lot of long-term potential," economist Wong concluded.