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Ecuadorian Bananas Enjoy the Same Tariffs as Colombia and Costa Rica

3.1.2020

From 2020 Ecuador will compete on equal terms with Colombia, Peru and Costa Rica, in the export of bananas to the European Union (EU). With the Commercial Agreement with that block, which has been in force since 2017, the tariff has been decreasing over the years. Thus, in 2017 it was 97 Euros per metric ton; in 2018, 90; in 2019, 83; and in this year, 75 Euros.

According to Eduardo Ledesma, banana exporter the reduction will benefit the sector, since historically it has paid more than the fruit from other countries.

Xavier Rosero, technical manager of the Ecuadorian Federation of Exporters (Fedexpor), said that this is the first year in which Ecuadorian bananas haven’t had to pay a higher tariff.

"This is good news, but we are worried about how we are losing market share in the EU, due to our high cost structure while the Central Americans and Colombia have adjusted their prices downwards, making it increasingly difficult to compete," he said.

Ledesma said that the reduction of exports to the European bloc is a matter for public and private sector analysis.

When making a global evaluation of the results of the trade agreement, Rosero considers that the agreement is "absolutely" positive adding that Ecuador has increased its exports, 7% on average in the first two years.

He also said that if the country did not sign this multi-party agreement, it would have lost a large part of the tariff preferences of the European Generalized System of Preferences (GSP), with the consequent drop in exports of between US$ 400 million and US$ 500 million in the first year alone.

In 2017, he said there was an increase in exports of US$ 400 million, and about US$ 200 million in 2018, which totals an average increase of 7%.

"So far in the entire period of the trade agreement we have maintained a positive balance and that, in a dollarization scheme, is totally necessary and positive for the country. However, but seen from the less statistical perspective but rather from an already productive perspective, this has also meant a very important opportunity for many companies to begin to internationalize," said Rosero.

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