RESTRICTED
WORLD TRADE WT/ACC/ECU/9
25February 1998
ORGANIZATION(98-0752)
Original: Spanish Working Party on
theAccession ofEcuador
ECUADOR: WTO ACCESSION COMMITMENTS
Report byEcuador
ThePermanent Mission ofEcuador hassubmitted information withregard tothespecific
commitments contained inparagraphs 9,19,34,48,59,75,77and78oftheReport oftheWorking
Party ontheAccession ofEcuador totheWTO (Document WT/L/77).
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Twoyears afterjoining theWTO, Ecuador submits itssecond annual report onitsaccession
commitments. Thisreport supplements thereport submitted on6February 1997 andgives details
oftheprogress made byEcuador inthisregard.
Inparagraph 79ofitsreport, theWorking Party ontheAccession ofEcuador totheWTO
establishedthatEcuadorwouldnotifytheimplementationofthecommitmentsreferredtoinparagraphs9,
19,34,48,59,75,77and78oftheReport. Theinformation ontheseeightparagraphs isgiven below.
Paragraph 9
Initsprevious report Ecuador stated thatthecommitment relating toitsexchange policy had
beenfulfilled earlier thanscheduled. Ecuador nowconfirms thattherehasbeennochange inthenational
exchange system andthatitremains entirely consistent withArticle XVofGATT 1994.
Paragraph 19
Thespecial consumption tax(ICE) isaninternal indirect taxbearing ontheconsumption of
asmall number ofproducts, whether domestic orimported. TheNational Congress hassolepower
toreform thedomestic taxsystem.
Despite theimpact ofthiscommitment onitstaxrevenues, Ecuador hasspared noeffort to
show itsreadiness tofulfil itsWTO commitment. In1997, forthesecond consecutive yearEcuador
made further reforms initsdomestic taxsystem withrespect totheapplication oftheICE. These reforms
wereconsistently aimed atfulfilling Ecuador 'scommitment andwerepublished intheOfficial Register,
No.120,of31July1997.
Paragraph 34
Ecuador undertook thecommitment toadminister imports ofusedclothing, usedvehicles and
usedtyresinaccordance withtherelevant WTO provisions, eventhough these import restrictions on
usedgoods donotaffect theexcellent overall conditions ensuring freetrade flows totheEcuadorian
market forgoods from WTO Members.WT/ACC/ECU/9
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Withregard totheimport ofusedvehicles, Ecuador iscontinuing tomake efforts tosupplement
theregime setoutinMinisterial Decisions Nos. 241and242of6August 1996, thetextsofwhich
were submitted withlastyear'snotification.
Withregard toimports ofusedgoods, Ecuador hopes toobtain thenecessary technical assistance
fromtheWTO Secretariat inorder todefine non-restrictive controls soastoestablish animport regime
forsuchgoods thatisconsistent withtheWTO rulesandfulfils Ecuador 'sinterest inprotecting consumer
health andsafety.
Paragraph 48
Taking intoaccount itsWTO andAndean Community obligations, Ecuador hasterminated
theapplication oftheTariff Adjustment Mechanism (MAAR) ornational price band system for
agricultural products. Intheyears 2000 and2001, inaccordance withthetimetable agreed andset
outintheAnnex totheWorking Party'sReport, itwillfulfil thecommitment toreduce thebound
levels bythepercentages given therein.
Paragraph 59
Export subsidies. Ecuador hasfulfilled thisaccession commitment ahead ofschedule, asit
reported totheGeneral Council initsreport lastyear.
Paragraph 75
Ecuador hasalsofulfilled thecommitment ofnotifying Trade-Related Investment Measures
(TRIMs) within thecorresponding period. Ecuador doesnothaveanyoutstanding commitment at
thisdate.
Paragraphs 77and78
On30June1997 Ecuador sentacommunication totheTRIPS Council informing itthatthe
TRIPS Agreement hadbeenpublished intheOfficial Register, No.977,of28June1996 andthat
therefore thelegalprovisions were inforce.
Inorder toensure fullimplementation oftheTRIPS Agreement, inDecember 1997 the
EcuadorianGovernmentsubmittedanewintellectualpropertylawforapprovalbytheNationalCongress.
Thelawisunder consideration inCongress and,when approved, willupdate Ecuadorian legislation
inamanner fullyinkeeping withthecountry 'sWTO obligations.
Withregard totheother concerns expressed bytherepresentative oftheUnited States, Imust
inform themembers oftheGeneral Council asfollows:
(i) Implementation oftariff-rate quotas. Ecuador hasnotopened quotas because ithas
applied thegeneral tarifflevels forimports ofcertain agricultural products, which have
beenmore advantageous thanthetariff ratesestablished forquotas.
(ii) Ecuador 'slegislation onpreshipment inspection isinconformity withthemultilateral
rules oftheagreement governing thesubject, andinparticular theprovisions on
transparency, priceverification, submission ofinformation, protection ofinformation,
non-discrimination, etc.,andthecustoms valuation rulesprovided forinArticle VII
ofGATT 1994.WT/ACC/ECU/9
Page3
Withregard topriceverification, Ecuador 'slegislation repeats exactly theverification
guidelines laiddown inArticle 2.20oftheAgreement andapplies them without any
alteration. Itexplicitly prohibits, asdoestheAgreement, theuseofarbitrary or
fictitiouspricesorvaluesforverificationpurposes.Theverificationcompaniesnormally
make known alltherequirements tousers byvarious means, including theInternet.
Ecuador willcontinue publishing promptly allthelawsandregulations applicable to
preshipment activities andwillalsonotify them totheWTO sothatWTO Members
receive theappropriate information.
(iii) Withregard tothepractices which, according totheUnited States exporters, arerelated
totheimplementation ofastandards regime thatallegedly actsasanarbitrary trade
barrier foravariety ofproducts, andanalleged prior authorization system for
agricultural imports usedtoblock imports andprotect local production, Ecuador is
interested inreceiving more information onthese twoissues inorder tocompare them
withtheofficial information, because atpresent itdoesnotapply astandards regime
oranimport licensing system aserroneously suggested bytheUnited States exporters.
(iv) Finally, Ecuador informs members oftheGeneral Council thattheLawforthe
Protection ofRepresentatives, Agents orDistributors ofForeign Enterprises, enacted
bySupremeDecreeNo.1038-A,andLawNo.125,InterpretingandAmendingSupreme
Decree 1038-A -thelegalinstruments styled the"Dealers Act"bytheUnited States
representative -havebothbeenrevoked byDecision oftheCongress ofEcuador dated
11September 1997. TheNational Congress enacted LawNo.22under thetitle"Law
Revoking Supreme Decree No.1038-A andLawNo.125inorder toensure equality
asbetween Ecuadorians andforeigners incontractual matters". Thisinstrument came
intoforce upon publication intheOfficial Register, andasaspecific lawtakes
precedence over anyconflicting general orspecial legal provision. Ihave been
instructed bymyGovernment torepeat furthermore thatinEcuador theprinciple of
non-retroactivity oflawapplies andtherefore itisquite impossible tofollow up
suggestions toapply thenewlawtoexclusivity contracts withEcuadorian agents signed
prior totheenactment ofthenewlaw.
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