Export Potential of Ecuador to Some Selected Countries: Gravity Analysis

We use the estimated equation of the gravity model to predict the values of imports (log). If the actual imported values of specialized products exceed the fitted values, we call it import potential for the importing country or export potential for the Exporting Country. We get the following results. The first column depicts the import potential of the reporter or the importing country (second column) or the export potential of the exporting country (third column and is Ecuador). Positive values mean positive export potential (for exporters-Ecuador) or import potential (for importers).

290040.1

Venezuela

ecu

-4759.89

Argentina

ecu

-709.13

Bolivia

ecu

-819955

Brazil

ecu

36633.4

Canada

ecu

799241.2

Chile

ecu

345205.7

China

ecu

-222946

Colombia

ecu

4455.463

Hong Kong

ecu

261.5587

Indonesia

ecu

130585.4

Japan

ecu

1504.165

Korea, Rep

.ecu

-23582.9

Mexico

ecu

-1124.93

Paraguay

ecu

487399.3

Peru

ecu

-1493.3

Singapore

ecu

1370.239

Vietnam

ecu

923086.6

United States

ecu

-564.786

Uruguay

ecu

Ecuador has positive export potential in providing these specialized products to Venezuela, Peru and Chile. These together add up to 1576.668 million US$ in 2010. The export potential to the US is worth 923 million US $ in 2010

We work out the Export Potential for 20 Specialized Products of Other Countries into Ecuador in 2010 using Gravity Analysis

180570.3

ecu

Argentina

99.78049

ecu

Austria

3068.556

ecu

Belgium

66681.59

ecu

Bolivia

-50628.4

ecu

Brazil

-17.9234

ecu

Bulgaria

2826.779

ecu

Canada

92744.8

ecu

Chile

35029.64

ecu

China

31974.83

ecu

Colombia

1817.811

ecu

Cyprus

-157.46

ecu

Czech Repu

122.4923

ecu

Denmark

-227.039

ecu

Estonia

-207.343

ecu

Finland

-6676.82

ecu

France

-1827.26

ecu

Germany

-39.4012

ecu

Greece

239.037

ecu

Hong Kong

643.3756

ecu

India

-462.804

ecu

Indonesia

55.46467

ecu

Ireland

628.5142

ecu

Italy

-4298.49

ecu

Japan

100.7447

ecu

Korea, Rep

-530.895

ecu

Lithuania

27.55283

ecu

Luxembourg

174.1041

ecu

Malaysia

-22028

ecu

Mexico

13692.75

ecu

Nederland

20531.03

ecu

Paraguay

163806.5

ecu

Peru

285.4557

ecu

Poland

2648.288

ecu

Portugal

-136.186

ecu

Romania

345.896

ecu

Singapore

-109.84

ecu

Slovak Rep

5187.999

ecu

Vietnam

-227.525

ecu

Slovenia

4967.741

ecu

Spain

-1049.65

ecu

Sweden

500.1947

ecu

Thailand

-3280.85

ecu

United King

-12044.4

ecu

United Stat

92.29361

ecu

Uruguay

-4134093

ecu

Venezuela

Argentina, Peru and Columbia, among other Latin American countries have lot of potential in trading of such products with Ecuador. SMART analysis confirms that liberalizing imports with respect to MERCOSUR countries will bring more overall gain to Ecuador.

Other Benefits of being Part of an Economic Agreement

The above analysis covers more technical aspects of an economic agreement. SMART analysis, in particular, gives numbers for evaluating the benefits of an economic agreement. The other benefits of having a preferential trading arrangement is to discuss the following

• Discuss energy and security issues

• Infrastructure Development including IT and Telecommunications and advent of some new air, road and rail links for increasing connectivity

• Services and Investment Liberalization measures

• Harmonizing regulatory standards relating to customs, accounting, educational services including professional activity

• Measures to tackle Climate Change, Disaster Management

• Tackle issues of Women Empowerment, Child Care

• Information Technology Enabled Services like Telemedicine and Tele-education

• Solar Rural Electrification, seed testing and rain water harvesting

• Dealing with financial crisis

• Water Scarcity

• Discuss ways and means to increase human capital and tackle inequality and poverty

 
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