UNIVERSIDAD CATOLICA DE SANTIAGO DE GUAYAQUIL

FACULTY OF ECONOMICS AND ADMINISTRATION

COURSE:

COMMERCIAL ENGLISH I

TUTORY SUBJECT:

BUSINESS REPORT

MEMBERS:

ABARCA ERICK

MACÍAS CHRYSTEL

MORENO GABRIELA

BERMEO LADY

RODRIGUEZ ALEJANDRO

SEMESTER:

B-2018
 Content page
 Executive Summary
 Terms of reference
 Procedure
 Findings
-Oil trade balance
-Non-oil trade balance
-Total Exports
-Exports by product
Total Imports
 Conclusions
 Recomendations
1.Executive Summary
European Free Trade Association (EFTA) is composed by four European countries that

are not part of the E.U: Switzerland, Liechtenstein, Norway and Iceland. In this report,

the main objective is to analyze the commercial relations between Ecuador and EFTA.

For achieving this objective, the report has the following structure: Initially, we

analyzed general data from Ecuador such as its total exports and non-oil exports, and in

the next part we analyzed specific information of the commercial relation between both

parties.

As mentionable findings, we can state that total Ecuadorian exports have reduced

drastically from $24.957.644 in 2013 to $19.122.455 in 2017. Lately we have stopped

our total exports continuous reduction and it is expected that this important part of our

economy recovers as fast as possible. Also, Ecuadorian exports to EFTA countries have

reduced considerably from $107.867.689 in 2013 to $94.699.848 in 2017. This last year

was the worst for Ecuadorian exports to EFTA, that is why, in order to maintain EFTA

as an important commercial partner the Ecuadorian government signed the Ecuador –

EFTA Free Trade Agreement.

As conclusions and recommendations, Ecuador must take full advantage of the tariff

benefits obtained through the free trade agreement. By using these tariff benefits, the

Ecuadorian products in the EFTA will obtain a considerable advantage since this will

allow the products of our country to have competitive prices. Additionally, the

authorities should promote a gradual change to stop being a country dependent on the

export of oil becoming a country that exports industrialized products. This research is

useful since it allows to identify if the treaty between Ecuador and EFTA will be

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beneficial, besides it allows to identify potential business ideas that could be exploited

in these European countries.

2. Terms of Reference
This report has been requested by the teacher miss Dafne Vera for the class of
Commercial English. The purpose of this report is to analyze the Statistical Information
from Ecuador – EFTA Commercial Relations in order to determine if the Ecuador –
EFTA Free Trade Agreement will be beneficial for Ecuador. In this report we will
present the findings and conclusions from information dated from 2013 to 2017.

Here you can see the different graphs describing what is in them. The graphics shown
are:
 Total Ecuadorian Exports
 Ecuadorian Non-oil exports
 Total exports from Ecuador to EFTA
 Ecuadorian exports to EFTA by country
 Ecuadorian exports to EFTA by products

Through the explanations given, it will be possible to understand in a better way the
changes that occur in the commercial relationship between the European Free Trade
Association "EFTA" and Ecuador year after year. This report is due to Monday 18 th,
2019.

3. Procedure
The information used in the analysis was gathered via published data and documents
from the official web page of the Ministry of International Commerce of Ecuador and
the EFTA countries official web page. The data recollected was obtained from the
annual reports that both institutions publish periodically. For this reason, it is concluded
that the method used in this report is the research from literature review. We also used
factual checking procedures in order to classify or discard information

4. Findings

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4.1 Total Ecuadorian Exports – Gabriela Moreno
In the following line graph (fig 1), total Ecuadorian exports from the period 2013 to
2017 are presented. The horizontal axis shows the years of study, 2013-2017, and the
vertical axis shows the total Ecuadorian exports in millions of dollars.

As shown in the line graph, Ecuador exported $24.957.644 in 2013, then the next year

the total exports raised to $25.724.432. By the year 2015, the total Ecuadorian exports

were $18.330.608, in 2016 the exports dropped to $16.797.665 and finally in 2017 the

total Ecuadorian exports were $19.122.455.

Figure #1

4.2 Total Ecuadorian Non-Oil Exports – Lady Bermeo

This line graph (Fig. 2) shows the total Ecuadorian Non -Oil exports in a five-year

period of time, from 2013 to 2017. The horizontal axis shows the years (2013-2017) and

the vertical axis indicates the total Ecuadorian Non - Oil exports to EFTA in millions of

dollars.

As shown in the line graph, Ecuador exported $9.657.000 in 2013, then the next year

the total Non-Oil exports were $11.410.000. By the year 2015, the total Ecuadorian

Non-Oil exports dropped to $10.667.000, in 2016 the exports kept dropping to

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$10.312.000 and finally in 2017 the total Ecuadorian Non-Oil exports were

$11.208.000.

Figure #2

4.3 Total exports from Ecuador to EFTA – Erick Abarca

This line graph (Fig. 3) shows the total exports from Ecuador to EFTA in the past five
years, from 2013 to 2017. The horizontal axis shows the years (2013-2017) and the
vertical axis indicates the total Ecuadorian exports to EFTA in dollars.

As we can see, Ecuador exported $107.867.689 to EFTA in 2013, then the next year
Ecuador exported $96.574.926 to EFTA. By the year 2015, Ecuador exported
$120.848.031 to EFTA, then in 2016 Ecuadorian exports to EFTA dropped to
$108.126.193 and finally, in 2017 Ecuador exported $94.699.848 to EFTA.

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 Figure #3

4.4 Ecuadorian exports to EFTA by country – Alejandro Rodriguez

This pie chart (Fig. 4) represents the total exports from Ecuador to EFTA classified by
country from the period 2013 to 2017. As shown in the pie chart, in the period 2013-
2017, Switzerland imported 66% of the products that Ecuador exported to the EFTA.
(Liechtenstein’s trade is included in the numbers for Switzerland due to the customs
union between Switzerland and Liechtenstein). Norway imported 30% of the products
that Ecuador exported to the EFTA. Finally, Iceland just imported 4% of the products
that Ecuador exported to the EFTA in the period 2013-2017.
Figure #4

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4.5 Ecuadorian exports to EFTA by products – Chrystel Macias
Figure #5

This pie chart (Fig. 5) represents the total exports from Ecuador to EFTA classified by

type of product from the period 2013 to 2017.

As shown in the pie chart, the category “Fruits and Nuts” with a total of $236.310.794

represents 45% of the total of Ecuadorian products exported to EFTA. The next

category, “Cocoa and its preparations”, with a total export of $141.884.304 represents

27% of the total of Ecuadorian products exported to EFTA. The category “Metals”

represents 17% of the total. Finally, the last category of exported products from Ecuador

to EFTA are “live trees and other plants” with $61.041.427 which only represents 11%

of the total.

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5. Conclusions
5.1 Total Ecuadorian Exports – Gabriela Moreno

Ecuadorian exports have been going through rough times lately. As we can see in the
graphic, from 2013 to 2014, the exports increased $766.788 (millions), but in 2015 the
exports dropped drastically from $25.724.432 to $18.330.608, situation that affected the
internal economy of our country. In 2016, the total of exports dropped again to
$16.797.665, being this the worst year analyzed, but lately in 2017 the situation has
improved with exports of $19.122.455, an increase of $2.324.790 (millions) compared
to the previous year. This improvement in 2017 has occurred due to the new free trade
agreements our government has signed with many strategical partners, being one of
them the EFTA countries. The tendency is for Ecuadorian total exports to improve
progressively

5.2 Total Ecuadorian Non-Oil Exports – Lady Bermeo

The situation of Ecuadorian non-oil exports is critical and worrying. Between 2013 and
2014, there was a significant increase in this type of exports that went from $ 9,657,000
to $ 11,410,000, an increase of 18.15% of the non-oil exports which made 2014 the best
year for Ecuadorian non-oil exports. For the year 2015, exports of non-oil products fell

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by almost 7% and in the following year (2016) the reduction of this type of exports
continued until it reached $ 10,312,000, thus marking a 9.6% drop in non-oil exports
from our country which made 2016 the worst year for this type of exports.

Finally, in 2017, thanks to the signing of new trade agreements, the non-oil exports of
our country recovered until they reached $ 11,208,000; it is expected that with the
signing of the trade agreement with the EFTA countries, these exports continue to
increase

5.3 Total exports from Ecuador to EFTA – Erick Abarca

Analyzing the trade relations between Ecuador and EFTA, we can see that a trade
agreement was necessary for our country. In the period from 2013 to 2017 the average
Ecuadorian exports is $105.623.337 (Millions); from 2013 to 2014 our exports reduced
$11.292.689, which represents a reduction of 10.47%, but in the following year (2015)
Ecuadorian exports recovered and reached the highest peak in this five-year period, the
total exports to EFTA in this year were $120.848.031, being this the best year.
Then, from 2015 to 2017 the Ecuadorian exports to EFTA dropped drastically from
$120.848.031 to $94.699.848, in the last two years (2016 and 2017) there was a
reduction of 12.42%. 2017 was the worst year for Ecuadorian exports to EFTA, that is
why, in order to avoid this continuous reduction and to maintain EFTA as an important
commercial partner the Ecuadorian government signed the Ecuador – EFTA Free Trade
Agreement.

5.4 Ecuadorian exports to EFTA by country – Alejandro Rodriguez

By observing the pie chart, we can determine that Switzerland is the country that
imports the most quantity from the products exported by Ecuador to the EFTA. This is
reasonable because from the four countries that integrate the EFTA, Switzerland is the
richest and is among the top 30 trading partners of Ecuador. As mentioned before,
Liechtenstein's trade is included in the numbers for Switzerland due to the customs
union between Switzerland and Liechtenstein. Norway is the second country that
imports the most quantity from the products exported by Ecuador to the EFTA, it is
logical since Norway has half of the GDP that Switzerland has. Finally, the country that

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imports the least quantity of products of Ecuador is Iceland, a country that is even
smaller that Ecuador.

5.5 Ecuadorian exports to EFTA by products – Chrystel Macias

As shown in the graph, the Ecuadorian product category that the EFTA imported the
most in the period 2013 to 2017 was “Fruits and Nuts” which represents 45% of the
total and includes fruits such as bananas, strawberries, corn grains and others. It is
logical that the most exported category to the EFTA is “Fruits and nuts” since Ecuador
is known worldwide as an exporter of fruits of the highest quality.
The second most exported Ecuadorian product to EFTA was “Cocoa and its
preparations”, which includes products such as cocoa grains and cocoa powder, this
category is mainly imported by Switzerland in order to produce chocolate, a
distinguished product of this country.
The third category is “Metals” which includes gold, silver, copper and other types of
metals. Finally, the last category of exported products from Ecuador to EFTA are “live
trees and other plants” which only represents 11% of the total. The main product of the
last category are preserved roses, a highly valued product in this European region.

6. Recommendations

6.1 Total Ecuadorian Exports – Gabriela Moreno

In order to improve the critical situation of the Ecuadorian exports, the government
should make new trade agreements with strategic partners such as the United States,
China and European countries with the purpose that our country obtains access to new
markets and obtains commercial advantages such as the reduction of export tariffs.
Additionally, Ecuador must diversify its export products and not depend mainly on oil
and its prices.

6.2 Total Ecuadorian Non-Oil Exports – Lady Bermeo

As a recommendation, Ecuador should continue to improve exports of non-oil
products.

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Ecuador is an oil exporting country; however, this should change. The authorities
should promote a gradual change to stop being a country dependent on the export of oil
becoming a country that exports industrialized products.

Through technology and the signing of new treaties, Ecuador must aim to increase its
non-oil trade balance in such a way that it exceeds the income of the oil trade balance.

6.3 Total exports from Ecuador to EFTA – Erick Abarca

In order to eliminate the continuous reduction of Ecuadorian exports to the EFTA, the
government and Ecuadorian companies should take full advantage of the tariff benefits
obtained through the free trade agreement. By using these tariff benefits, the Ecuadorian
products in the EFTA will obtain a considerable advantage since this will allow the
products of our country to have competitive prices. It is expected that the free trade
agreement will have positive results for our country

6.4 Ecuadorian exports to EFTA by country – Alejandro Rodriguez

As a recommendation, the excellent commercial relations with Switzerland should be

maintained since it is a key partner for Ecuador. However, trade relations with Norway
should be improved since that country could become a key trading partner of our
country (due to its high GDP).

Ecuador produces many of the products demanded by Norway, however, we do not

export them to this country. For example, in Norway there is a demand for marine
products such as shrimp and fish that we could supply. We must export more key
products to Norway.

6.5 Ecuadorian exports to EFTA by products – Chrystel Macias

As a recommendation, Ecuador should expand its export product line. Initially, as a

country we should export industrialized products and not only export raw material, in
this way we would obtain greater economic benefits. Additionally, we must export other
types of products such as fish and shrimp preparations, treated metals and other
industrialized products that allow a greater profitability than the one offered in the
export of raw materials.

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 7. APPENDICES

7. 1 Total Ecuadorian Exports – Gabriela Moreno

TOTAL EXPORTS FROM ECUADOR TO THE WORLD (In Millions of $)

Exported to 2013 2014 2015 2016 2017
World 24,957,644 25,724,432 18,330,608 16,797,665 19,122,455

7.2 Total Ecuadorian Non-Oil Exports – Lady Bermeo

ECUADORIAN NON OIL EXPORTS (In Millions of $)
Exported to 2013 2014 2015 2016 2017
World 9,657,000 11,410,000 10,667,000 10,312,000 11,208,000

7.3 Total exports from Ecuador to EFTA – Erick Abarca

TOTAL EXPORTS FROM ECUADOR TO EFTA ($)
Exported to 2013 2014 2015 2016 2017
EFTA 107,867,689 96,574,926 120,848,031 108,126,193 94,699,848

7.4 Ecuadorian exports to EFTA by country – Alejandro Rodriguez

ECUADORIAN EXPORTS TO EFTA BY COUNTRY
Exports 2013 2014 2015 2016 2017 TOTAL SHARE
Exports from Ecuador to Iceland 2,794,566 4,757,028 6,467,202 4,395,574 4,407,008 22,821,378 4.32%
Exports from Ecuador to Norway 39,753,458 29,047,227 32,683,413 31,929,068 23,951,390 157,364,556 29.80%
Exports from Ecuador to Switzerland (Liechtenstein)
65,319,665 62,770,671 81,697,416 71,801,551 66,341,450 347,930,753 65.88%
528,116,687 100%

7.5 Ecuadorian exports to EFTA by products – Chrystel Macias

ECUADORIAN EXPORTS TO EFTA BY PRODUCTS

TOP ECUADOR EXPORTS TO EFTA BY PRODUCTS2013 2014 2015 2016 2017 TOTAL SHARE
Fruit and nuts 50,179,600 44,766,075 49,155,283 48,681,544 43,528,292 236,310,794 45%
Cocoa and cocoa preparations 27,309,371 25,268,662 34,104,489 28,691,337 26,510,445 141,884,304 27%
Live trees and other plants 11,778,316 11,676,836 13,271,403 12,266,414 12,048,458 61,041,427 12%
Metals (Gold, Cooper, others) 18,600,402 14,863,354 24,316,856 18,486,898 12,612,653 88,880,163 17%
Total Ecuador exports to EFTA 107,867,689 96,574,926 11120,848,031 108,126,193 94,699,848 528,116,687 100.00%
8. BIBLIOGRAPHY
 Ecuadorian Ministry of Foreign Trade, Foreign Trade Report, December 2017
https://www.comercioexterior.gob.ec/wp-content/uploads/2018/01/Informe-Mensual-
Diciembre_4.pdf

 Ecuadorian Ministry of Foreign Trade, Accountability, December 2017:

https://www.comercioexterior.gob.ec/wp-content/uploads/2018/02/MCEI_RC2017.pdf

 National Customs Service, 2017

https://www.aduana.gob.ec/exportaciones/

 Trade Map, Ecuador by product, 2017

https://www.trademap.org/Country_SelProductCountry_TS.aspx?nvpm=3%7c218%7c%7c
%7c%7cTOTAL%7c%7c%7c2%7c1%7c1%7c2%7c2%7c1%7c2%7c1%7c1

 EFTA Statistics, 2018

http://trade.efta.int/#/country-graph/EFTA/EC/2017/HS2

 PROECUADOR, Export Monitoring, 2017

https://www.proecuador.gob.ec/monitoreo-de-exportaciones/

 Observatory of Economic Complexity, Ecuador, 2017

https://atlas.media.mit.edu/es/profile/country/ecu/

 El Comercio, Exports of Ecuador according to the Central Bank, 2016

https://www.elcomercio.com/actualidad/exportaciones-ecuador-comercio-bancocentral-
negocios.html

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