WORLD TRADE
ORGANIZATIONWT/GC/COM/4
24 February 1998
(98-0721)
General Council
19 February 1998
Item 6Original:  Spanish
ECUADOR - COMMITMENTS UNDER THE PROTOCOL OF ACCESSION
Statement by Ecuador
The following statement was made by Ecuador at the 19 February meeting of the General
Council.
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Two years after joining the WTO, Ecuador submits its second annual report on its accession
commitments.  This report supplements the report submitted on 6 February 1997 and gives details of
the progress made by Ecuador in this regard.
In paragraph 79 of its report, the Working Party on the Accession of Ecuador to the WTO
established that Ecuador would notify the implementation of the commitments referred to in
paragraphs 9, 19, 34, 48, 59, 75, 77 and 78 of the Report.  The information on these eight paragraphs
is given below.
Paragraph 9
In its previous report Ecuador stated that the commitment relating to its exchange policy had
been fulfilled earlier than scheduled.  Ecuador now confirms that there has been no change in the
national exchange system and that it remains entirely consistent with GATT Article XV.
Paragraph 19
The special consumption tax (ICE) is an internal indirect tax bearing on the consumption of a
small number of products, whether domestic or imported.  The National Congress has sole power to
reform the domestic tax system.
Despite the impact of this commitment on its tax revenues, Ecuador has spared no effort to
show its readiness to fulfil its WTO commitment.  In 1997, for the second consecutive year Ecuador
made further reforms in its domestic tax system w ith respect to the application of the ICE.  These
reforms were consistently aimed at fulfilling Ecuador's commitment and were published in the
Official Register, No. 120, of 31 July 1997.
Paragraph 34
Ecuador undertook the commitment to administer imports of used clothing, used vehicles and
used tyres in accordance with the relevant WTO provisions, even though these import restrictions on
used goods do not affect the excellent overall conditions ensuring free trade flows to the Ecuadorian
market for goods from WTO Members.WT/GC/COM/4
Page 2
With regard to the import of used vehicles, Ecuador is continuing to make efforts to
supplement the regime set out in Ministerial Decisions Nos. 241 and 242 of 6 August 1996, the texts
of which were submitted with last year's notification.
With regard to imports of used goods, Ecuador hopes to obtain the necessary technical
assistance from the WTO Secretariat in order to define non-restrictive controls so as to establish animport regime for such goods that is consistent with the WTO rules and fulfils Ecuador's interest in
protecting consumer health and safety.
Paragraph 48
Taking into account its WTO and Andean Community obligations, Ecuador has terminated
the application of the Tariff Adjustment Mechanism (MAAR) or national price band system for
agricultural products.  In the years 2000 and 2001, in accordance with the timetable agreed and set out
in the Annex to the Working Party's Report, it will fulfil the commitment to reduce the bound levels
by the percentages given therein.
Paragraph 59
Export subsidies.  Ecuador has fulfilled this accession commitment ahead of schedule, as it
reported to the General Council in its report last year.
Paragraph 75
Ecuador has also fulfilled the commitment of notifying Trade-Related Investment Measures
(TRIMs) within the corresponding period.  Ecuador  does not have any outstanding commitment at this
date.
Paragraphs 77 and 78
On 30 June 1997 Ecuador sent a communication to  the TRIPS Council informing it that the
TRIPS Agreement had been published in the Official Register, No. 977, of 28 June 1996 and that
therefore the legal provisions were in force.
In order to ensure full implementation of the TRIPS Agreement, in December 1997 the
Ecuadorian Government submitted a new intellectual property law for approval by the National
Congress.  The law is under consideration in Congress and, when approved, will update Ecuadorianlegislation in a manner fully in keeping with the country's WTO obligations.
With regard to the other concerns expressed by the representative of the United States, I must
inform the members of the General Council as follows:
1. Implementation of tariff-rate quotas.  Ecuador has not opened quotas because it has
applied the general tariff levels for imports of certain agricultural products, which
have been more advantageous than the tariff rates established for quotas.
2. Ecuador's legislation on preshipment inspection is in conformity with the multilateral
rules of the agreement governing the subject, and in particular the provisions on
transparency, price verification, submission of information, protection of information,
non-discrimination, etc., and the customs valuation rules provided for in GATT
Article VII.WT/GC/COM/4
Page 3
With regard to price verification, Ecuador's legislation repeats exactly the verification
guidelines laid down in Article 2.20 of th e Agreement and applies them without any
alteration.  It explicitly prohibits, as does the Agreement, the use of arbitrary or
fictitious prices or values for verification purposes.  The verification companies
normally make known all the requirements to users by various means, including theInternet.
Ecuador will continue publishing promptly all the laws and regulations applicable to
preshipment activities and will also notify them to the WTO so that WTO Members
receive the appropriate information.
3. With regard to the practices which, according to the United States exporters, are
related to the implementation of a standards regime that allegedly acts as an arbitrary
trade barrier for a variety of products, and an alleged prior authorization system foragricultural imports used to block imports and protect local production, Ecuador is
interested in receiving more information on these two issues in order to compare them
with the official information, because at present it does not apply a standards regime
or an import licensing system as erroneously suggested by the United States
exporters.
4. Finally, Ecuador informs members of the General Council that the Law for the
Protection of Representatives, Agents or Distributors of Foreign Enterprises, enacted
by Supreme Decree No. 1038-A, and Law No. 125, Interpreting and Amending
Supreme Decree 1038-A - the legal instruments styled the "Dealers Act" by the
United States representative - have both been revoked by Decision of the Congress ofEcuador dated 11 September 1997.  The National Congress enacted Law No. 22
under the title "Law Revoking Suprem e Decree No. 1038-A and Law No. 125 in
order to ensure equality as between Ec uadorians and foreigners in contractual
matters".  This instrument came into force upon publication in the Official Register,
and as a specific law takes precedence over any conflicting general or special legalprovision.  I have been instructed by my Government to repeat furthermore that in
Ecuador the principle of non-retroactivity of law applies and therefore it is quite
impossible to follow up suggestions to apply the new law to exclusivity contracts
with Ecuadorian agents signed prior to the enactment of the new law.
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