It will officially take effect tomorrow! China and Ecuador cancel tariffs on each other

According to the China Business website, on May 11, 2023, China and Ecuador signed the Free Trade Agreement between the Government of the people's Republic of China and the Government of the Republic of Ecuador. At present, both China and Ecuador have completed their respective domestic approval procedures, and the agreement will enter into force on May 1, 2024.

According to the announcement, after the entry into force of the free trade agreement between China and Ecuador, the two sides will gradually eliminate tariffs on about 90% of the tax items, covering each other's major export products, of which about 60% will be cancelled immediately on the day the agreement takes effect. When most of China's plastic products, chemical fibers, iron and steel products, machinery, electrical equipment, home decoration, cars and parts, lithium batteries and other products enter the Ecuadorian market, Ecuadorian import tariffs will be gradually reduced to zero from the current 5%. 40%.

The gradual elimination of tariffs between the two countries will play an important role in expanding bilateral trade, promoting the integration of industrial chains and mutual investment, and will also further raise the level of trade facilitation. At the same time, the two sides will establish closer communication and cooperation mechanisms in many areas, such as rules of origin, customs procedures and trade facilitation, sanitary and plant livelihood measures, technical barriers to trade, trade relief, dispute settlement, investment cooperation, e-commerce, competition, economic cooperation and many other fields, to promote the coordination of relevant rules and regulations, and to provide a more convenient, transparent and stable business environment for enterprises of the two countries.

Ecuador's economy depends mainly on bananas, cocoa, oil, coffee and tourism, and the severing of diplomatic relations between Mexico and Ecuador will also reduce exports between countries. In addition, the recent drought in Ecuador has also seriously affected hydropower generation, and power cuts have been implemented in many parts of the country since April 16.

It is reported that 75% of Ecuador's electricity comes from hydropower, affected by the El Ni ñ o phenomenon. Ecuador is currently suffering from a serious drought, which has led to a drop in the water level of many rivers and reservoirs. Local media also announced on the 16th the arrangements for power cuts in the capital Quito and the port city of Yakir.

The diplomatic crisis and the severe domestic drought have affected Ecuador's export trade such as bananas and coffee. However, after the entry into force of the Free Trade Agreement between the Government of the people's Republic of China and the Government of the Republic of Ecuador, when Ecuadorian products such as bananas, prawns, fish, fish oil, fresh and dried flowers, cocoa and coffee enter the Chinese market, China's import tariffs will also be gradually reduced from the current 5% to 20%. This will benefit the development of Ecuador's export trade.

It is understood that China has also imposed zero tariff on products originating in Angola, the Gambia, Mali, Madagascar, Mauritania and the Democratic Republic of the Congo, and the zero tariff treatment covers 98% of the taxable products of these African countries. such as coffee, palm oil, cotton, cocoa, fruit, seafood and spices.

The entry into force and implementation of the agreement between China and Ecuador will enhance the level of trade and investment liberalization and facilitation between the two countries, further stimulate the potential of trade and investment cooperation, and promote the all-round upgrading of bilateral economic and trade cooperation. Enhance the well-being of enterprises and peoples of the two countries.