Foreign trade with Ecuador offers opportunities for Colombia

Foreign trade with Ecuador is concentrated in non-mineral-energy products and represents an opportunity for the industries of both countries.

Ecuador is a country with a population of 18 million inhabitants and a land area of 248,360 square kilometers, while Colombia has a little more than 50 million inhabitants and 1,142 million square kilometers. It also shares a land border of nearly 586 kilometers with Colombia, according to the Colombian Foreign Ministry.

In 2024, Colombia faces the challenge of deepening trade relations with its neighbor, particularly in manufacturing production. In particular, according to ProColombia, our country has good opportunities with products from the metal-mechanic, chemical and fashion industries.

In 2022, Ecuador’s Gross Domestic Product (GDP) was USD $115 billion, while Colombia’s was USD $343.94 billion, almost three times higher. However, in 2023 the GDP per capita was USD $6,391, close to the Colombian GDP of USD $6,630 (World Bank).

Below, we tell you how trade is between both countries and in which sectors there are more opportunities.

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Foreign trade with Ecuador

According to the Colombian Ministry of Commerce, Industry and Tourism (MinCIT), in 2022, 96.9% of imports to Colombia from Ecuador were non-mining-energy products. Similarly, 97.6% of exports to Ecuador were non-mining-energy products.

Colombian exports to Ecuador between 2012 and 2022 have averaged USD $1,711,639 million, according to DANE data. In 2022, these sales amounted to USD $1,882 million and accounted for 3.31% of total Colombian exports.

In 2022, the main products exported to Ecuador were passenger cars and passenger transport vehicles (USD $108 million), dosed medicines (USD $105 million) and goods transport vehicles (USD $87 million).

Exports to Ecuador are concentrated in sectors with high added value and this makes it an important market. In 2022, according to MinCIT calculations, Colombian basic and light industries sold USD $427.7 million to Ecuador, agribusiness USD $312.5 million and the agricultural sector USD $154.8 million.

In these and other sectors, Colombia faces the challenge of taking better advantage of opportunities to increase trade with Ecuador, a country that is close to it, so transportation costs are lower, with which it has cultural affinities and to which it has advantages to reach thanks to the trade agreements in force.

On the other hand, imports from Ecuador between 2012 and 2022 have averaged USD $819.9 million, according to DANE data. In 2022, these purchases were USD $941 million and represented 1.28% of total Colombian imports.

In 2022, the main products imported from Ecuador were fish preparations and canned fish (USD $156 million), wood particle boards (USD $132 million) and palm oil and its fractions (USD $71 million).

This dynamic of foreign trade with Ecuador left in 2022 a positive trade balance for Colombia of USD $970 million. Between 2012 and 2022, this trade balance has been in surplus for the country by USD $883 million per year on average, according to DANE figures.

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Bilateral investment between Ecuador and Colombia

Ecuador is a modest player in terms of foreign direct investment. During 2022, foreign direct investment entering Colombia was USD $17,393 million, according to data from Banco de la República. Of this, USD $53.9 million came from Ecuador.

And in the first semester of 2023, of the USD $9,560 million of FDI that entered the country, USD $19.9 million came from Ecuador.

According to the same source, Colombian investment abroad reached USD $3,401 million in 2022. Of this, USD $38 million was invested in Ecuador. During the first semester of 2023, USD $4.5 million went to Ecuador out of the USD $148 million invested by Colombia abroad.

In figures: Ecuador’s foreign trade in numbers

In 2022, Ecuadorian exports to the entire world reached USD $35,380 million, while imports were for USD $33,048 million, resulting in a trade surplus of USD $2,332 million (DANE).

According to MinCIT, the main buyer of Ecuador’s goods in 2022 was the United States, which accounted for 27.2% of Ecuador’s exports, worth USD $9,804 million. It was followed by China, with purchases of USD $6,242 million (17.6%); Panama with USD $4,990 million (14.1%) and Chile with USD $1,361 million (3.8%). Colombia was in fifth place, with purchases of US$1,072 million, 3% of Ecuador’s total exports.

The main products exported by Ecuador in 2022 were crude petroleum or bituminous mineral oils (USD $10.835million), crustaceans fit for human consumption (USD $8.010 million) and bananas (USD $3.523 million). These three tariff items accounted for 63.2% of total exports, according to DANE figures.

The main suppliers of goods to Ecuador during 2022 were the United States, with sales of USD $8,569 million, representing 25.9% of imports, and China, with 22% of imports, equivalent to USD $7,281 million.

In 2022, Colombia was the third country of origin of imports to Ecuador, with USD 2,055 million (6.2%). Then came Brazil, with US$1,328 million (4%), and South Korea with US$1,217 million (3.7%).The main products imported by Ecuador in 2022 were petroleum oils, except crude oils, for US$4,597 million (13.9%); oils and products of the distillation of coal tars, for US$2,512 million (7.6%), and passenger cars and automobiles for US$1,239 million (3.8%).

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