Universidad Del Azuay Faculty of Law School of International Relations “STUDY OF TRADE BETWEEN ECUADOR AND THE UNITED KINGDOM (GREAT BRITAIN AND NORTHERN IRELAND), SPECIFICALLY THE TRADE BALANCE BETWEEN 2007 AND 2012, AND PROPOSALS FOR ITS GROWTH” Graduate thesis prior to obtaining a Bilingual Bachelor in International Studies minor in Foreing Trade AUTHOR: Geovanny Mauricio Carreño Ulloa. DIRECTOR: Eng. Antonio Fabián Torres Dávila. CUENCA – ECUADOR 2015 iii Dedication To my parents, José and Victoria. iv Acknowledgments To my parents, for their unconditional love, support, and trust, a thousand thanks to you; I am what I am because of you today. A special thanks to my mother; since childhood she has taught me to be a responsible and dedicated man; she has managed to guide me in every moment of my life with advice and infinite love, thank you for your unconditional support in converting me into a good man. To my grandparents, who were constantly there to take care of me and love me; much of what I am today I owe to them specifically. To my nephews, because they are the most beautiful gift that God has given me, I hope to be a source of inspiration and pride to them. To my good friends, for always giving me help with words of encouragement to complete my goals. To my supervisor, Antonio Torres, who has guided me in the development of this thesis. v Table of Contents Dedication ...................................................................................................................... iv Acknowledgments ........................................................................................................... v Table of Contents ........................................................................................................... vi Tables Index .................................................................................................................. viii Graphs Index .................................................................................................................. ix Images Index ................................................................................................................... x Abstract .......................................................................................................................... xi Introduction.................................................................................................................... xiii Chapter I: Background of trade relations and agreements signed by Ecuador and the United Kingdom ............................................................................................................... 1 1.1 Historical precedents .......................................................................................... 1 1.2 Agreements signed between the two countries .................................................. 3 1.3 Meetings between the government of the Republic of Ecuador and the government of the United Kingdom - Great Britain and Northern Ireland ..................... 8 Chapter II: Profile of the United Kingdom - specifically Great Britain and Northern Ireland ........................................................................................................................... 10 2.1. Political factor ................................................................................................... 10 2.2. Economic factor ............................................................................................... 12 2.3. Social factor ..................................................................................................... 15 2.4. Technological factor ......................................................................................... 18 Chapter III: Commercial study of Ecuador and the United Kingdom - specifically Great Britain and Northern Ireland .......................................................................................... 21 3.1. Trade balance of oil and non-oil exports from Ecuador to the world; 2008 – 2009, 2009 – 2010, 2010 – 2011, and 2011 – 2012 ................................................... 21 3.2. Analysis of the Trade Balance between Ecuador and the United Kingdom, specifically Great Britain and Northern Ireland, from 2007 to 2012 ............................ 30 3.3. Main exports from Ecuador to Great Britain and Northern Ireland; 2007-2012 41 3.4. Ecuadorian products exported to the UK .......................................................... 42 3.4.1. Tuna .......................................................................................................... 42 3.4.2. Shrimp ....................................................................................................... 45 vi 3.4.3. Cavendish Valery bananas ........................................................................ 48 3.4.4. Fresh cut roses .......................................................................................... 52 3.5. Analysis of the United Kingdom’s trade balance .............................................. 56 3.6. Main products of Great Britain and Northern Ireland that were imported to Ecuador from 2007 to 2012 ........................................................................................ 60 3.6.1. Solvent Naphtha ........................................................................................ 61 3.6.2. Whisky ....................................................................................................... 64 3.6.3. Machines whose superstructure can spin 360º .......................................... 66 3.6.4. Anesthetics ................................................................................................ 68 3.7. Perspectives on the best commercial exchanges between Ecuador and the United Kingdom, specifically Great Britain and Northern Ireland................................ 71 3.8. Achievements and losses acquired from the treaties signed by Ecuador and the United Kingdom .......................................................................................................... 72 3.8.1. Economic and Investment ......................................................................... 72 3.8.2. Cultural ...................................................................................................... 78 3.8.3. Education ................................................................................................... 79 Chapter IV: Proposals for growth .................................................................................. 82 4.1. Exportation of new products from Ecuador to the United Kingdom .................. 82 4.1.1. Panama hats ................................................................................................. 82 4.1.2. Fruit puree ..................................................................................................... 85 4.2. Importation of new British products into Ecuador ............................................. 89 4.3. Observations for better exchange of culture, technology, and education ......... 91 Conclusions and Recommendations ............................................................................. 95 Bibliography ................................................................................................................. 100 Annexes ...................................................................................................................... 115 vii Tables Index Table N° 1: Major Economic Indicators in the UK - 2013/2014 ..................................... 12 Table N° 2: Changes in GDP for 2010, 2011, and 2012 ................................................ 13 Table N° 3: Comparison of the UK’s GDP with the World - 2013 .................................. 15 Table N° 4: Trade balance of oil and non-oil exports from Ecuador to the world; 2008 – 2009 ........................................................................................................................ 22 Table N° 5: Trade balance of oil and non-oil exports from Ecuador to the world; 2009 - 2010 ........................................................................................................................ 24 Table N° 6: Trade balance of oil and non-oil exports from Ecuador to the world; 2010 - 2011 ........................................................................................................................ 26 Table N° 7: Trade balance of oil and non-oil exports from Ecuador to the world; 2011 – 2012 ........................................................................................................................ 28 Table Nº 8: Ecuadorian exports to Great Britain and Northern Ireland; 2007 – 2012 .... 32 Table N° 9: Imports from the United Kingdom to Ecuador from 2007 to 2012 ............... 34 Table N° 10: Horizontal analysis of the trade balance between the UK and Ecuador ... 40 Table N° 11: Tuna exports to the United Kingdom (2007-2012) .................................... 43 Table N° 12: Ecuadorian tuna exports to the world ....................................................... 44 Table N° 13: Shrimp exports to the United Kingdom (2007-2012)................................. 45 Table N° 14: Ecuadorian, Cavendish Valery banana exports to the United Kingdom (2007-2012) ............................................................................................................ 49 Table N° 15: Exports of roses to the UK from 2007 to 2012 .......................................... 53 Table N° 16: Major Trade Partners of the UK ...............................................................