QUITO (Reuters) - Ecuador expects to pull together a trade deal with China at the end of this year and begin formal debt renegotiations with the Asian country, Ecuadorean President Guillermo Lasso said on Saturday, after a Beijing visit with his counterpart Xi Jinping.
Over the last decade, China became Ecuador's top lender, with millions of dollars in long-term credit tied to the handover of crude oil, significant investments in hydroelectric and mining projects, and other loans.
"In China, we had a productive meeting with President Xi Jinping," Lasso posted on Twitter (NYSE: TWTR). "We achieved great results in commercial openings, cooperation in health and debt renegotiation."
At the meeting, the two countries signed a memorandum of understanding to pave the way for a trade deal at the end of the year, which would benefit Ecuadorean exports of shrimp, bananas, cacao, other fruit, and minerals.
China said on Sunday the two countries have agreed to open negotiations for a free-trade pact. In a statement on its website, the commerce ministry offered no details on the planned talks.
At the meeting on the sidelines of the Beijing 2022 Winter Olympics, Xi said China and Ecuador should use negotiations on the free trade agreement as an opportunity to deepen practical cooperation between the two countries, China's Xinhua news agency said.
Xi was quoted as expressing hope that Ecuador would continue to provide a fair business environment for Chinese companies to invest and operate in Ecuador while saying China would continue to help Ecuador fight COVID-19.
Lasso, who took office in May, has said more trade and foreign investment are crucial to stimulating the South American country's COVID-battered and liquidity-poor economy.
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"It would increase the market by nearly $1 billion more in export opportunities," commerce minister Julio Jose Prado said during a virtual press conference. "And that will mean we could almost be doubling the exports we make to China in various products."
The countries have agreed that their finance ministries will conduct initial debt renegotiation as Ecuador seeks to improve its payment periods and interest rates.
According to foreign minister Juan Carlos Holguin, Ecuador is also seeking to disconnect the handover of crude from outstanding debts with Chinese banks worth some $2.08 billion, which would free up some $400 million per year in potential spending.
The Ecuadorean government added that China would donate 2.5 million doses of COVID-19 vaccines for injection of 3- to 5-year-olds.
