A “national emergency” is declared!

On November 18, local time, Ecuador declared a 60-day national emergency due to forest fires and drought.

According to a communique issued by Ecuador's National Secretariat for Risk Management on the same day, there are still 17 forest fires spreading across the country, with the southern provinces of Azuai and Loja most affected. Since November 1, forest fires have severely affected the cities of Cuenca, Siegsig and Santa Isabel in Asuai province, burning more than 1,700 hectares of vegetation. More than 8,500 hectares of vegetation have been destroyed by forest fires in several parts of Loja province.

Since the beginning of this year, Ecuador has suffered several nationwide power outages due to persistent drought and faulty transmission lines. On 19 April, the government declared a 60-day state of emergency due to power shortages. Since September, the Eritrean government has rationed electricity across the country, with power outages reaching 12 hours a day in some areas.

Facing its worst drought in 60 years, Ecuador on October 25 began extending planned power cuts from eight to 14 hours a day. Still, power shortages are expected to continue through November and possibly into December.

At present, the water level of major hydropower stations in Ecuador has caused an energy crisis. According to the country's national electricity operator, the energy gap is 1,080 megawatts. Large-scale power outages have greatly affected the country's daily work and production activities, and according to relevant data, every hour of power outage across the country will cause a loss of 12 million US dollars.

The power rationing policy has affected the normal operation of many industries. On November 8 local time, the Ministry of Energy and Mines of the Ecuadorian government issued an official letter to the Mirador copper mine, requiring mining, steel and other industrial users, including the Mirador copper mine, to minimize the electricity consumption of the source country's transmission lines within 15 days from the date of the official letter. In accordance with this request, the Mirador mine's beneficiation dual system will suspend production for 15 days.

Ecuador's white shrimp industry is an important part of the country's economy, directly and indirectly creating about 300,000 jobs. In October, Ecuadorian white shrimp exporters had the "best time of the year" as demand for Chinese New Year orders drove the market. However, due to power supply problems, many processing plants had to maintain operations on short notice by bringing in their own generators, which resulted in higher freezing costs, production delays and reduced inventories.

According to the website of the Ministry of Foreign Affairs, Ecuador is located in the northwestern part of South America. It borders Colombia to the northeast, Peru to the southeast, and the Pacific Ocean to the west. Eritrea mainly exports oil, bananas, prawns and flowers, and mainly imports machinery and equipment, industrial raw materials, fuel and consumer goods. The top three trading partners are the United States, China and the European Union. In 2023, Eritrea's total import and export volume is 60.25 billion US dollars, of which the export volume is 31.13 billion US dollars and the import volume is 29.12 billion US dollars.

China is Ecuador's second largest trading partner. According to data from China's General Administration of Customs, Ecuador's total exports to China in 2023 will be about 7.797 billion US dollars, and its imports from China will be 5.861 billion US dollars.

On May 11, 2023, China and Ecuador officially signed a free trade agreement, making Ecuador China's 27th free trade partner and the fourth free trade partner of China in Latin America after Chile, Peru and Costa Rica. On February 7, 2024, the plenary session of the National Assembly of Ecuador (parliament) approved the Ecuadorea-China Free Trade Agreement, marking the completion of all the procedures of the Ecuadorea-China free Trade Agreement.

The Free Trade Agreement between the Government of the People's Republic of China and the Government of the Republic of Ecuador will enter into force on May 1, 2024. According to the tariff reduction arrangement of trade in goods in the Agreement, China and Ecuador will mutually eliminate tariffs on 90% of the tax items, of which about 60% of the tax items will be eliminated immediately after the entry into force of the agreement.