Connecting U.S. businesses to a world of
opportunity.
Eric Olson
Senior Commercial Officer
U.S. Embassy, Quito
Ecuador Trade
Outlook – 2011
Economy Overview
U.S. Trade with Ecuador
Best Prospects SWOT for Ecuador Doing Business in
Ecuador
Agenda
Stats
– Geographical size of Colorado
– Population of 14 million
– Home of the Galápagos
Islands
Politics
– President Rafael Correa
– Citizens’ Revolution
Country Background
Agricultural and oil economy
– Oil is the largest Ecuadorian export, followed by cut flowers, bananas, and shrimp.
World’s 65th-largest economy (2009)
Ecuador’s global trade surpassed $36.2 billion in 2010
Economy Overview
U.S. Trade with Ecuador
$5.45 billion (2010) in exports to Ecuador
– 29% of Ecuador’s total imports
$6.05 billon (2010) in imports from Ecuador
– 35% of Ecuador’s total exports
the U.S. is Ecuador’s largest trading partner
Ecuador has been an ATPDEA beneficiary
U.S. Trade with Ecuador
566,731,297 21%
565,606,519 21%
537,741,043 20%
436,716,404 17%
230,900,701 9%
183,096,708 7%
136,562,218 5%
333--MACHINERY; EXCEPT ELECTRICAL 325--CHEMICALS
334--COMPUTER AND ELECTRONIC PRODUCTS 324--PETROLEUM & COAL PRODUCTS
336--TRANSPORTATION EQUIPMENT 322--PAPER
11--AGRICULTURE AND LIVESTOCK PRODUCTS *2008
Best Prospects
Best prospects for U.S. exports to Ecuador include: Automotive Parts and Accessories Construction Equipment Cosmetics Medical Equipment and Devices Printing and Graphic Arts Telecommunications Equipment Travel & Tourism
In addition, other good prospects include: Education and Training Services Plastics Machinery, Materials, and Resins Decontamination Equipment Fertilizers
For our Country Commercial Guide, please visit our website at: http://www.buyusa.gov/ecuador/en/
Best Prospects
Automotive Parts and Accessories U.S. is the major source of automotive parts and accessories
followed by Colombia, China, and Japan
Suspensions, shock absorbers, brake parts, brake fluid, transmission belts, rubber pneumatic tires, engine blocks and piston heads, piston rods, carburetors and valves, spark plugs, fuel injection pumps, clutch kits, air conditioner compressors, and ball bearings
Replacement parts, as well as accessories and appearance products
increase in “luxury tax” for cars means owners will maintain current cars
Construction Equipment Market size has tripled in eight years
Excavators, large trucks, parts of boring machines, paver trucks, cranes, track type tractors, motor graders, rollers, tandem rollers, pneumatic rollers, levelers, finishers, shovel loaders, road reclaimers, stone crushing equipment, and dump trucks
high demand for used construction equipment.
Best Prospects
Cosmetics
Skin care: anti-aging facial creams and hand and body lotions
Make-up: lipstick & solar protection products
97% of raw materials are imported and offer a good niche market
Medical Equipment and Devices
Government spent $1.76 billion in 2010 in health sector
Plans are to spend over $2 billion in 2011.
“State of emergency”
facilitates purchase of medical equipment, instruments, and supplies as well as the renovation of existing public hospitals
Printing and Graphic Arts
Export-oriented ag sector
92% of raw materials are imported from U.S.
Best Prospects
Telecommunications Equipment
Market worth $1.6 billion
CNT upgrading land and mobile networks
Japan/Brazil DTV standard selected
Plans for a fiber optic submarine cable
Travel & Tourism
Almost 170,000 Ecuadorian visited U.S. in 2009
162,000 visitors by October of 2010
average stay of 8 days
Ranked 31st
larger market than Peru, Russia, Chile, Turkey, and South Africa
SWOT on Ecuador
Affinity for U.S. products & services
Government promoting
development of local industry
Dollarized economy
Political uncertainty
IPR enforcement
Relatively small and under-
developed market
Difficulties in obtaining credit
World economy
Corruption
Protectionist policies
Politicization of judicial system
Growth of foreign
investment in local industries
Good niche opportunities –
vitamins, infrastructure, franchises,
cosmetics
Strengths Weaknesses
Opportunities Threats
Doing Business in Ecuador
1. Always have a formal introduction; don’t forget business cards.
2. Do your best to speak Spanish in meetings.
3. Invest in building relationships.
4. Appreciate the value of long-term loyalty.
5. Entertain and be entertained.
6. Perform adequate market research.
7. Be open to a different cultural perspective.
8. Protect your Intellectual Property Rights.
Doing Business in Ecuador
9. Appoint a qualified distributor. Do not appoint an exclusive distributor.
10. Have a local lawyer review your contracts.
11. Include an arbitration clause in your contracts.
Gracias!
Thank you, & visit us at
http://www.buyusa.gov/ecuador/en
Contact us today
to connect with a world of opportunity.
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