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China trade
Economy

US frets about ‘erosion of influence’ as China and Ecuador move closer to a free-trade deal

  • A free-trade deal with Ecuador would be China’s fourth with a Latin American country, after signing agreements with Chile, Costa Rica and Peru
  • The warming relations have fuelled calls in the United States to open trade talks with Ecuador to counter China’s growing influence in the region

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Ecuador’s President Guillermo Lasso and US President Joe Biden attend a working luncheon with other heads of state during the 9th Summit of the Americas in Los Angeles on December 19. Photo: AFP
Ananta Agarwal

As Ecuador and China move closer towards sealing a free-trade agreement, concern is mounting in Washington that the United States is losing influence in Latin America.

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Ecuadorean President Guillermo Lasso said early in December that negotiations with China on a bilateral free-trade deal (FTA) were “practically closed”, some 10 months after talks started. The deal is expected to boost the value of Ecuadorean exports to China to US$1 billion, while offering Chinese firms access to an array of raw materials.

A FTA with Ecuador would be China’s fourth with a Latin American country, after signing deals with Chile, Costa Rica and Peru. In September, China agreed to restructure US$4.4 billion of debt owed by Ecuador, providing relief of $1 billion until 2025.
The warming relations have fuelled calls in the US to open trade talks with Ecuador to counter China’s growing influence.

“Without further US engagement,” wrote senators Bob Menendez and Rob Portman last week, “the United States risks losing market opportunities for American companies and the potential erosion of our influence in the region relative to China.”

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