Elections in Ecuador: A crucial factor for Colombian exporters

The presidential elections in Ecuador are generating unprecedented attention, not only in the neighboring country but also throughout the continent. Due to its geographic position and its role in the region, it has become a strategic partner for Colombia and a crucial actor in the complex South American political and economic scenario.

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Ecuador has historically had significant ties with Colombia, including trade agreements and diplomatic relations that have not escaped moments of tension. In terms of trade, DANE figures show that more than 2,700 exporters sold USD $1.8 billion in the Ecuadorian market in 2022 alone.

In a world where relations between South American governments are influenced by the rearrangement of world geopolitics, Ecuador emerges as a strategic actor for Colombian exporters seeking to maintain and expand their business in the region.

For all these reasons, the presidential elections in Ecuador are more than a local political event. They are a critical point for Colombian exporters, who depend on stable and predictable trade relations in the region.

Here are the main characteristics of trade between the two countries.

Bilateral Trade between Ecuador and Colombia

DANE figures show that Colombia and Ecuador have a robust trade relationship, with trade concentrated in 96% in manufactured goods, 2% in agricultural products and another 2% in mining products.

Although the volume of trade with the neighboring country has grown, its share in Colombia’s trade has decreased. It went from representing 4.8% of Colombia’s international trade in 2002 to 2.1% in 2022, according to DANE figures. However, it continues to be an important player, as purchases and sales between the two countries reached more than USD $2.7 billion in 2022.

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The balance of trade relations is positive for Colombian producers. DANE statistics show that our country has a growing trade balance with the neighboring country. Between 2002 and 2022, the annual trade surplus increased from USD $442 million to more than USD $930 million.

The productive activities that benefit most from the trade relationship with Ecuador are the food industry, the manufacture of chemical substances and products, the manufacture of motor vehicles, and the rubber and plastics industry.

Ecuador: an attractive market for Colombian industry

Colombia’s manufacturing exports to Ecuador grew at an average annual rate of 5.96% between 2002 and 2022, according to DANE reports. Chemical, food, automotive and pharmaceutical industries accounted for 55% of sales.

The most successful group of Colombian products in the Ecuadorian market comes from the manufacture of chemical substances and products, which accounted for 22% of Colombia’s manufacturing exports to Ecuador between January 2021 and December 2022.

From beauty and home care products, to the manufacture of plastics, to the supply of agricultural inputs, the list of leaders in this market includes companies such as Colgate – Palmolive, Corteva Agriscience, Esenttia, Mexichem Resinas de Colombia, Bayer and Yara Colombia.

Following DANE figures, the food industry ranked second in Colombian exports to Ecuador, with 16.6% between 2021 and 2022.

Companies such as Colombina, Ingredion Colombia, Compañía de Galletas Noel, Federación Nacional de Cafeteros, Compañía Nacional de Chocolates and QBCO led sales between 2021 and 2022, in sectors such as the processing of oils and fats of vegetable and animal origin, cocoa industry, coffee, bakery and animal feed concentrated more than half of the transactions.

The third group of Colombian manufactured goods with the highest exports to the Ecuadorian market is vehicles. With sales close to US$410 million between 2021 and 2022, this market is led by companies such as Renault, Hino, GMC and Toyota.

The chemical industry follows in the list, in fourth place. Companies such as Procaps, Tecnoquímicas, Laboratorios La Sante, Genfar, Merck and Vitalis, lead a market with sales of close to USD $100 million per year.

The remaining 45% of manufacturing exports are in electrical appliances and equipment, rubber, plastic, paper and cardboard products, textiles and clothing, machinery and equipment, metallurgy, among others.

Among the companies that made the largest sales of this type of manufactured goods to Ecuador are Eliot – Pat Primo, Tenaris Turbocaribe, Centelsa, Kimberly, MABE, ARCLA, Cartón de Colombia, Schneider Electric de Colombia and Procables, among others.

A relationship to be leveraged

In a world where global interests play an important role in intergovernmental relations in Latin America, it is essential that Colombia be attentive to the results of these elections and their possible repercussions on its trade and regional stability.

Colombian exporters must be prepared to adapt to any changes that may arise and keep a constant watch on political developments in Ecuador and the region in general.

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