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Ecuador Confirms Final Removal Of Import Surcharges

Ecuador imposed the surcharges in March 2015, for 15 months, in response to a sharp drop in oil prices starting in late 2014, which led to a deterioration in the country’s balance of payments. The tariff surcharges were initially fixed at between 5% and 45% and were applied to nearly 3,000 tariff lines, or 38% of the country’s total.

Following an earthquake which struck the country in April 2016, Ecuador decided to extend the surcharge for one year, until June 2017.

Humberto Jiménez Torres, Vice Minister of Negotiations, Integration and Trade Defence in Ecuador’s Ministry of Foreign Trade, told the committee that the safeguard made it possible for Ecuador to protect its external financial situation, restore macroeconomic balance and safeguard its dollarized economy.

Delegations took the floor to thank Ecuador for cooperating with the committee, acting in a transparent manner and ultimately removing the measures.  Several members however said they were concerned that Ecuador might be considering the adoption of new measures to replace the safeguard and urged it not to take any actions which might be incompatible with WTO rules.

Mr Jiménez Torres responded that Ecuador’s government was not considering re-establishing, or establishing any new, safeguard measure for balance of payments purposes. He added that Ecuador was seeking to increase trade by expanding its network of free trade agreements.

WTO members facing balance-of-payment difficulties may apply import restrictions under provisions in the General Agreement on Tariffs and Trade (GATT) 1994 and under the General Agreement on Trade in Services (GATS).  A member applying new restrictions or substantially intensifying existing ones is obliged to consult with the committee immediately after taking action or before doing so if prior consultation is practicable and is subject to periodic review in the committee on the measures taken.

During the six previous rounds of consultations by the committee on this issue, WTO members were divided on whether the application of the import surcharge complied with WTO rules. Ecuador was urged to keep making progress and confirm the dismantling of the surcharge as soon as possible.

The committee wrapped up its work on 21 July by adopting a report on the conclusion of the consultations with Ecuador. The report will now be transmitted to the WTO’s General Council for adoption in the autumn.

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Publication  World Trade Organization [5F]
Core Series Globelex ,GPETR
Topic codes

98IGO , 151WTO

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