China trade deal has pros and cons for Ecuador

Significance

The deal, which was finalised under former President Guillermo Lasso (2021-23) and approved by the National Assembly in February, promises improved access to expanding Chinese markets for Ecuadoran exporters and benefits for importers, retailers and consumers of clothing, cars and electronics in terms of lower prices. However, it may also undermine local production and encourage extractive industries, stoking sociopolitical tensions.

Impacts

• A free trade deal with South Korea would diversify Ecuador’s export markets but further undermine local industrial production.
• Latin American countries will become increasingly important export markets for China amid growing US and EU protectionism.
• The China agreement will boost economic growth, but economic conditions will remain weak in the short-to-medium term.