ECUADOR - Economy
Minister of International Trade, Ecuador
Diego Aulestia Valencia was born in Quito and was appointed as Minister of International Trade in February 2015. This portfolio of State, formed a year ago, is the governing body of the policy of International Trade and Investment, which is conducive to strategically and sovereign economic integration and trade of the country within the international context. An Economist from the Catholic University of Ecuador, he holds three Master’s degrees in Economics, Latin American Studies with a major in Economic History, and History. He also has a diploma in Urban Studies. He stands out for his wide-ranging career in the public sector and academia, and has previously served as Minister of Housing and Urban Development.
Negotiating the agreement became a smooth affair once a common consensus had been reached; yet there are always processes that require implementation to fully appraise the final form. The EU, in 2015, extended commercial preferences for Ecuador to access the EU market. This was highly significant and we believe that the advantages of such an agreement benefit both Ecuadorian and EU companies. Europe is a substantial market and we see the agreement as the stability and long-term vision that Ecuador’s productive sector requires in order to grow and develop closer ties with the EU. This agreement also helps in the government’s efforts toward the diversification of the economy and markets of operation, thereby helping Ecuadorian companies to broaden their horizons and further expand their internationalization. Europe has traditionally been our main export market for non-oil products; however, we perceive broader opportunities to capitalize on going forward.
Europe is a highly important market for fair trade and organic products, a niche in which Ecuador already plays an important role, but has much more yet to offer. At the same time, I believe that Europe can provide an answer to the intangible value of our products.
This measure has the objective to influence in the kinds of products Ecuador imports. This technical action was developed in accordance with the framework provided by the World Trade Organization (WTO), whom we expect to fully validate it shortly. This is a temporary decision aimed at taking action in a context in which Ecuador has the inability to make a correction of the value of its national currency. We, in this case, need to take similar action to that of devaluing ones own currency, for example. I think this measure has a rather low impact on the productive apparatus of the country and the main raw materials we import.
Non-traditional exports have positively increased over the past seven years at an average annual rate of 14%. This has resulted from several incentives and efforts from public authorities that include wider financial tools, tax incentives, and export support, among others. Our efforts have run in parallel to those of Pro Ecuador and its extensive network of offices across the world.
Traditionally, Ecuador has not been a destination for FDI. However, we have increased the benefits available and attractiveness of the country through tax and other incentives. We have also worked to increase the competitiveness of Ecuador’s economy by such measures as eliminating bureaucratic barriers in order to establish companies and setting preferential credit lines. All of these actions fit within the country’s legal framework. Overall, we are interested in foreign investment both in quantitative and qualitative terms.
1H2015 threw highly interesting figures into the mix; we are one of the very few regional countries in which non-oil exports have not decreased. This is vital when taking into account the complex international situation. In 2015, we will strengthen efforts and actions to diversify products, services, and markets. We will also ramp up our efforts to better articulate commercial and public policies. And meanwhile, we expect to maintain the level of exports observed in 2014, which would be a significant achievement. Overall, I think that the economic situation of Ecuador has yet to further improve; currency savings will increase as we decrease oil derivative imports, for example, to generate electrical energy. I think exports of non-oil products will considerably increase in the near future thanks to commercial agreements as well as the revocation of other types of barriers at the local level.
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