Easy come, easy go, certainly doesn’t define the fate of Ecuador Import Export Markets as recent as 2003, when this nation-state held a significant trade deficit. Even in the current year, after several years of a reasonable surplus, Ecuador is showing a relatively slight balance of trade deficit. Why such a struggle? The reasons are varied and, at first glance, they mask ideal opportunities.
To understand the Ecuador import-export dynamic, one has to better grasp Ecuador’s export-oriented product base and better understand the primary trade partners of Ecuador. Ecuador is highly dependent on oil products for exports. A ten year analysis will show a low of 50% of Ecuador export composition and a high of 62% of export composition being oil products. Those are very significant numbers.
Separately, despite all the press hype and diplomatic jaw-boning, Ecuador’s primary export partner is the USA, representing approximately 45% of export trade. A sizable percentage of that is oil products. By contrast, Peru represents the second largest export trade partner with a total of just 9.2%! As for imports, the USA ranks #1, again, as the primary trade partner of Ecuador, with Venezuela in second place.
The core dominant dynamic in Ecuador import-export circles is a declining USA economic market, less and less able to afford ever-increasing imports from Ecuador, while a growing domestic middle-class within Ecuador is driving greater and greater demand for perceived higher quality imports. The balance of trade deficit continues to keep Ecuador near equilibrium or threatening to permanently break bad into the red.
The Correa government has partially met the challenge by looking to increase domestic production of goods, thereby breaking the increasing reliance on imports. Also, in spurring better quality domestic product in Ecuador, Correa hopes to make “made in Ecuador” product more marketable as an Export to secondary (non-USA) markets. Therein lies the hidden import-export possibility, perhaps even beyond the more modest plans of the Correa Administration.
However, before I address the latter, let us first look at more basic and mundane import-export business opportunities in Ecuador. The leather trade is an exceptional export opportunity in Ecuador, with high-quality product manufactured here that would easily command much higher prices abroad. Likewise, for the textile trade, particularly in terms of local handicraft, such as hand-knit alpaca wool sweaters. Jewelry, especially of the gold variety, is another enticing export option, but shop carefully, as quality varies dramatically. Additionally, Ecuadorean handicrafts make exceptionally good export items, everything from Panama Hats to Tagua figurines to ethnically infused decorative ceramics.
For Ecuador importers, if one can find the way to consistently “break the code” and import name brand electronics for less, they would make a financial killing. An example of this would be Apple brand products. Likewise, with Argentina so relatively close, if an importer could find a consistent and reliable way to import Argentinian beef into Ecuador, the world would open up to them. Certain automotive products from abroad, amongst the highest tariff goods, such as Harley-Davidson motorcycles, would find ready markets here, as pent up demand in Ecuador continuously grows. It is all about finding a consistent, cost-effective way to import the product to market.
Any and all of these import-export options are highly desirable business models, just waiting for the right expat entrepreneur. The export options discussed are all pretty much straight-forward deals. The imports to Ecuador discussed all carry with them some variant of reducing costs for the product to enter the local market. However, what if there was a better way?
We all know the realistic facts. Under the Correa Administration, the current desire is to cut back on foreign imports, ramp up domestic production of consumable goods, and enhance domestic production quality to create consistently viable product for external export. So, if you have a speciality in a particular trade that can be linked to the consumable goods sector, why not enter the arena and offer a way to build a better mouse trap?
You don’t have to reinvent the wheel. Take existing consumable goods product, in your selected field of specialization, and show the Ecuadorean manufacturers how they can build it better, more efficiently and more cost-effectively, in essence, helping them improve their competitiveness as an export product. In exchange, a healthy consulting fee might be in order, as well as a piece of the export pie. Challenge yourself. Think outside the box. Improvise an array of solutions and instead of finding work-arounds to the Correa government’s objectives, why not feed those objects with better solutions. Instant win-win all around. Opportunity is knocking, why not open the door?
The best opportunities often occur at a time of great change and some market inefficiencies. Ecuador finds itself in just such a position relative to the import-export sector. It is an exciting arena, in a fresh market. Why not come to Ecuador and explore the varied possibilities?