RESTRICTED  
  
WT/TPR/G/383  
8 January 2019  
(19-0081) Page: 1/32 
Trade Policy Review Body   Original: Spanish  
 
 
TRADE POLICY REVIEW  
REPORT BY  
ECUADOR  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by Ecuador  
is attached.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report is subject to restricted circulation and press emb argo until the end of the 
first session of the meeting of the Trade Policy Review Body on Ecuador . WT/TPR/G/383 • Ecuador  
 
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  Contents  
1   MACROECONOMIC ENVIRONMENT AND ECON OMIC POLICY  ................................ ........  4 
1.1   Introduction  ................................ ................................ ................................ ................  4 
1.1.1    Economic growth  ................................ ................................ ................................ ...... 4 
1.1.2    Economic development in the second quarter of 2018  ................................ ...................  8 
1.1.3    Economic policy  ................................ ................................ ................................ .......10 
1.2   Legislative framework  ................................ ................................ ................................ .11 
1.2.1    2008 Constitution of the Republic  ................................ ................................ .............. 11 
1.2.2    National Development Plan 2017 -2021 "A Lifetime"  ................................ ..................... 12 
1.2.3    Institutional changes: Executi ve Decree 520  ................................ ............................... 15 
2   TRADE ENVIRONMEN T AND TRADE POLICY  ................................ ...............................  16 
2.1   Trends in foreign trade and investment  ................................ ................................ ......... 16 
2.1.1    Trend in imports  ................................ ................................ ................................ ......21 
2.1.2    Trade in services  ................................ ................................ ................................ .....22 
2.2   Trade policy and integration  ................................ ................................ ......................... 24 
2.3   Progress in implementing the Trade Facilitation Agreemen t ................................ ............. 24 
2.4   Related policies  ................................ ................................ ................................ .......... 26 
2.4.1    Investment  ................................ ................................ ................................ ............. 26 
2.4.2    Agriculture and livestock  ................................ ................................ ........................... 26 
2.4.3    Industry  ................................ ................................ ................................ ................. 28 
2.4.4    Fisheries and Aquaculture  ................................ ................................ ......................... 29 
2.4.5    MSMEs, Crafts and the Popular and Solidarity Economy (EPS)  ................................ .......30 
2.4.6    Manufacturing  ................................ ................................ ................................ ......... 31 
2.4.7    Ecuadorian quality system and technical regulation  ................................ ...................... 31 
3   CONCLUSIONS ................................ ................................ ................................ ...........  32 
Charts  
Chart 1.1 Trend in Ecuador's GDP  ................................ ................................ .........................  4 
Chart 1.2 Aggregate demand: determinants of growth ................................ .............................  5 
Chart 1.3 Oil and non -oil GVA  ................................ ................................ ...............................  7 
Chart 1.4 Gross domestic product (GDP)  ................................ ................................ ................  8 
Chart 1.5 Oil and non -oil GVA  ................................ ................................ ...............................  9 
Chart 2.1 Ecuador's overall trade balance with the rest of the world, 2012 -2017 ........................ 16 
Chart 2.2 Ecuador's non -oil trade balance with the rest of the world, 2012 -2017 ....................... 17 
Chart 2.3 Trend in Ecuador's overall exports according to country of destination, 2012 -2017 ......18 
Chart 2.4 Trend in Ecuador's non -oil exports according to country of destination, 2012 -2017 ......19 
Chart 2.5 Ecuador's main export destinations, 2012 and 2017  ................................ ................. 19 
Chart 2.6 Performance of Ecuador's non -oil exports, 2012 -2017 ................................ .............. 20 
Chart 2.7 Main export products, 2012 -2017 ................................ ................................ .......... 20 
Chart 2.8 Ecuador's exports to the rest of the world and number of products exported,  
2012-2017 ................................ ................................ ................................ ........................ 21 WT/TPR/G/383 • Ecuador  
 
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  Chart 2.9 Ecuador's imports by economic use or destination, 2012 -2017 ................................ ..22 
Chart 2.10 Foreign direct investment in Ecuador  ................................ ................................ ....23 
Chart 2.11 Main sources of foreign  investment in Ecuador  ................................ ....................... 24 
Tables  
Table 1.1 National Development Plan "A Lifetime" 2017 -2021 ................................ .................. 13 
Table 1.2 Pillar 2 Economics at the service of society  ................................ .............................. 13 
Table 2.1 Balance of trade in services  ................................ ................................ ................... 22 
 
 
  WT/TPR/G/383 • Ecuador  
 
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  1  MACROECONOMIC ENVIRONMENT AND ECON OMIC POLICY  
1.1  Introduction  
1.1.1   Economic growth  
1.1.  Once the effects of the international crisis of 2008 -2009 had begun to subside , Ecuador's 
economy entered  a period of variable growth . The average annual change  in its gross domestic 
product (GDP) during the period 2010 -2014 was 5.2%, higher than the average for Latin America 
during the same period  (3.5% according to ECLAC data ). In nominal terms, the economy was worth 
USD 101,726  million in 2014.  
Chart 1.1 Trend  in Ecuador's GDP  
(Millions of 2007 US dollars and annual rates  of change ) 
 
Source:  Central Bank of Ecuador.  
1.2.  During those years, the benefits of high oil prices, efficient  tax administration and significant 
flows of external financing channelled into the public sector provided a certain amount of fiscal policy 
space for spending and public investment, and emblematic projects were developed in the electric ity, 
transport and oil sectors.1 These investments aimed  to pave the way  for structural transformation, 
boosting systemic competitiveness by building infrastructure conducive to  connectivity (roads, ports, 
airports) as a basis for the development of production.  
1.3.  Added to this was a supply of electricity chiefly from renewable sources, bringing down 
production costs in the manufacturing sector. A road network was constructed that not only provided 
easy access for producers and exporters to domestic and foreign markets, but also introduced a 
means of harnessing the  productive potential in the different territories so that emphasis could be 
placed on overcoming the dependency of exports on primary products and, in keeping with the 
constitutional framework, introducing a dynamic and balanced relationship in society to ensure the 
development of the conditions needed to bring about "Good Living" based on interaction among  the 
public, the private, and the popular and solidarity  economi c segments . 
1.4.  During the period under review, final household consumption accounted for approximately 
two thirds of GDP, while the share of final government consumption stood at about 13.6%. What 
                                                
1 While during the period 2000 -2005, non -oil revenue accounted for an average of 16% of GDP, during 
the period 2012 -2017 the figure exceeded 20%. In 2015, the share was 26%.  
3.57.9
5.6
4.9
3.8
0.1
-1.22.4
-2.00.02.04.06.08.010.0
010,00020,00030,00040,00050,00060,00070,00080,000
2010 2011 2012 2013 2014 2015 2016 sd 2017 p
GDP Change (right axis)WT/TPR/G/383 • Ecuador  
 
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  kept the momentum going until 2014, however, was gross fixed capital forma tion (or investment), 
chiefly through State -funded programmes. While the share of public investment in total investment 
was 27% during the period 2000 -2005, during the period 2008 -2016 it reached  an average of 47%, 
making it possible to provide the infrast ructure needed for the comprehensive development of 
production. Moreover, the figure continued to increase by an average of more than 10% per year 
between 2010 and 2014 and became the real driver  of the economy , accompanied , as can be seen 
in the chart  below, by a similar trend in  final general government  consumption . The public sector 
invested on average USD  12 billion per year during the period 2010 -2015, broken down as follows: 
social and human development (37%); production and strategic sectors (35%); s ecurity and justice 
(24%); and heritage  and economic policy  (4%).2 
Chart 1.2 Aggregate demand: determinants of growth  
Annual change  at constant prices  
 
Source: Central Bank of Ecuador.  
1.5.  Among the different pr oductive sectors of the economy, construction, with its various linkages 
to manufacturing, was one of the highest growth sectors, together with electricity supply, 
aquaculture, and financial services, all non -oil sectors. Meanwhile, poverty decreased from 36% in 
2009 to 22.5% in 2014. Similarly, with income in the poorest segments of the population growing 
more rapidly than the average income, the Gini index of inequality fell from 0.50 to 0.47.  
1.6.  Starting in 2015, economic development changed course and the growth rate slowed to 0.1%, 
falling to -1.2% in 2016. This was the result  of a number of factors that impacted the Ecuadorian 
economy: (i) the appreciation of the dollar at a time when the neighbouring countries, such as Peru 
and Colombia, were dep reciating their currencies ; (ii) the sharp fall in the price of crude3; (iii) the 
decline in investment for both years (6.2% in 2015 and 8.9% in 2016); (iv) the sharp fall in export 
revenue and legal quota payments; and (iv) the significant im pact of the e arthquake of April  2016 
and the resulting losses .4 
1.7.  Between 2013 and 2016, urban unemployment increased from 4.9% to 6.5%, while urban 
underemployment increased from 10.1% to 18.8%. During the sa me period, poverty and the 
Gini index  of inequality remained r elatively stable.  
                                                
2 SENPLADES, Accountability Report 2015.  
3 While in 2013 and 2014, Ecuador exported its crude at USD 94.4 and USD 82.9 pe r barrel 
respectively, in 2015 the price fell to USD 45.9 per barrel, and in 2016, to USD 30.7.  
4 According to SENPLADES, the earthquake cost an estimated USD 3,344 million.  
4.48.711.110.3
6.7
2.1
-0.23.2
-15.0-10.0-5.00.05.010.015.0
2010 2011 2012 2013 2014 2015 2016 sd 2017 p
Final household consumption Final general government consumption Gross fixed capital formation ExportsWT/TPR/G/383 • Ecuador  
 
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  1.8.  In order to counteract these shocks and in the absence of a local currency, in 2016 -2017, the 
Government had to curb the already high level of public investment and contain the increase in 
current expenditure. The authorities also mobili zed various external  and domestic  sources of 
financing, and made a number of cuts in spending which had their impact on economic growth. At 
the same time, in order to avoid an external sector imbalance, a number of temporary measures 
were introduced betwee n March 2015 and the first half of 2017, and a balance -of-payments 
safeguard, approved by the World Trade Organization and the Andean Community, was applied. 
These policies helped to moderate the effects of the external shock and to finance reconstruction 
following the earthquake.  
1.9.  Indeed, t he sector that suffered  the most in 2016 was construction, with a fall in gross value 
added of 5.8%. At the same time, partly as a result of  the introduction of a balance -of-payments 
safeguard, the gross value added of trade fell by 4%.  
1.10.   Historically, the Ecuadorian economy has been highly vulnerable to internal and external 
shocks such as the appreciation of the dollar, currency movements in the neighbouring countries 
and among its partners, and fluctuations in the price of its exports.  
1.11.   With the advent of the new Government in May 2017, the return to a  VAT rate of  12% and 
the termination  of the balance -of-payments safeguard, a Government plan calling  for support to the 
construction, manufacturing and mining industries  as the pillars of economic growth gave rise to 
positive  expectations. The result was  an environment of confidence in the new authorities which was 
reflected in the optimism of the  stakeholders, a growth in loans in the different sectors,  and increased 
imports. This, in its turn, contributed to an increase in final household consumption. In 2017, GDP 
recovered after two years in recession . In current terms, GDP reached USD 104,296 m illion, 
increasing by 2.4% in constant terms, driven chiefly by a year -on-year growth of 5.3% in investment 
(gross fixed capital formation) and 3.7% in private sector consumption. The vigorous growth in final 
household consumption was linked to the increas ed flow of remittances, the maintenance of wages 
in real terms, the increase in ordinary consumer loans of 64%, in entrepreneurial  production  
financing  of 88% and in corporate production financing of 94%, as well as greater buoyancy in the 
different sector s of the economy . Moreover, since 2008 nominal wages increased at a higher rate 
than inflation, contributing to an improvement in the population's purchasing power.  
1.12.   In 2017, investment (GFCF) increased by 5.3% compared to 2016, a performance directly 
linked to the increase in imports of machinery and equipment, which account for approximately 
24.4% of total imports. The share of public GFCF in the total reached 45.4% in 2016 
(USD  11,408  million), compared to 57.6% in 2014 (USD 15,953 million) and 50 .6% in 2015 
(USD  13,344 million).  
1.13.   Meanwhile, in 2017 non -oil GVA grew by 2.1% thanks to the recovery of most economic 
activities, while oil GVA fell by 2.3%, chiefly owing  to a decrease in crude oil extraction, which fell 
to 193.9 million barrels in 2017, 3.4% lo wer than in 2016. The fall in production in 2017 was mainly 
due to the quotas established in the agreement signed with OPEC.  WT/TPR/G/383 • Ecuador  
 
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  Chart 1.3 Oil and non -oil GVA  
2007 = 100, annual rates of change  
Source:  Central Bank of Ecuador.  
1.14.   The performance of  the "aquaculture  and shrimp -fishing" sector was remarkable in that , in 
spite of the ravages caused by the 2016 earthquake, which affected the Manabí  and Esmeraldas 
production areas, and the negative impact of El Niño on the coastal areas, it recorded positive 
results, growing by  15.9% in 2017. The annual rate of change in GVA for electricity and water supply 
reached  9.6% with the entry into operation of  Coca Codo Sinclair hydroelectric plant , which  increased 
its productio n to 99 %, from 2,972  million kWh in 2016 to 5,914  million kWh , in 2017.5 At the same 
time, thermal production fell by 49 % annually, so that there was a decrease in the consumption of 
petroleum products, of which Ecuador is a net importer.  
1.15.   One sector which has been particularly dynamic throughout 2017 was financial services, with 
an annual growth rate of 6.3 %. Credit operations in the private financial sector and the "popular 
and so lidarity" economy rose from USD  22,979  million in 2016 to USD  27,385  million  in 2017, i.e. 
an increase of USD  4,407  million year on year.  
1.16.   The teaching and social services sector and the health sector were among the most  dynamic 
in 2017, owing to the fact that they were among the Government's strategic priorities as part of  its 
effort to improve the quality of education and public health and expand citizens'  rights to those 
services. Hence the high growth rate in those sectors over the past few years and the steady increase 
in their share in GDP.  
1.17.   However, other sectors were less fort unate in their recovery, in particular construction, which 
recorded an annual decline of 4.4 % in 2017. As mentioned earlier, this was due to the decrease in 
the public investment that had stimulated the sector in previous years.  
1.18.   The country has achieved co nsiderable economic and social progress over the past decade , 
resulting in greater investment in infrastructure , improved living conditions for the population and 
greater equality . Nevertheless, there was an economic slowdown in 2015 -2016 owing to the exte rnal 
                                                
5 For the past four years, the Ecuadorian Government has been investing heavily i n infrastructure for 
power generation  and water supply. Some of this infrastructure entered into operation during 2015 and 2016, 
enabling Ecuador to increase its water and electricity supply, and even to begin exporting electricity to 
neighbouring countrie s such as Peru and Colombia.  
4.68.2
6.0 6.0
4.5
1.2
-1.42.1
-2.33.83.1
-1.71.6
-2.63.2
-2.33.57.9
5.6
4.9
3.8
0.1
-1.22.4
-8.0-4.00.04.08.012.016.0
-4.0-2.00.02.04.06.08.0
2010 2011 2012 2013 2014 2015 2016 2017
Non-oil GVA Oil GVA GDPWT/TPR/G/383 • Ecuador  
 
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  shocks and to the fact that the production -export chain was insufficiently diversified, with exports 
focusing on a handful of products.  
1.19.   In a context in which public investment could no longer continue to be the driver of growth, 
the Government felt th at it was essential to bring about a systematic improvement in the investment 
climate, encouraging greater private participation and making it easier for capital and labour to be 
invested in emerging activities. Thus, one of the national Government's main priorities since the 
second half of 2017 has been attracting international and domestic investment and creating a stable 
legal framework that would provide the necessary incentives.  
1.20.   Greater investment is expected for the period 2018 -2021 with the promotion , as from June, 
of "investment contracts", particularly in the oil, hydrocarbon and mining sectors. In August  2018, 
the National Assembly approved the draft Organic Law on the Promotion of Production, Attraction of 
Investment, Generation of Employment and Fiscal Stability and Balance, which rests on three  main 
pillars: remission of interests, penalties and charges; incentives for private investment (tax relief); 
and benefits for the revival of construction, with a focus on social housing in the country. It is hoped 
that this will help to attract domestic and foreign investment, or reinvestment, providing support for 
the private sector which is helping to diversify the Ecuadorian economy, to increase its productivity 
and to generate quality employment , with a  view to promoting development and continuing the fight 
against poverty.  
1.1.2   Economic development in the second quarter of 2018  
1.21.   From April to June  2018, Ecuador's GDP grew by 0.9 % compared to the same period in 2017 
(Q/Q-4) and by 0.4 % compared to the previous  quarter (Q/Q -1). In current values, quarterly GDP 
reached USD  27,024  million.  
Chart 1.4 Gross domestic product (GDP)  
2007 = 100, quarterly rates of change  
 
Source:  Central Bank of Ecuador.  
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18
Var Q/Q-1 -0.3 2.3 1.4 0.2 0.2 -1.6 -0.3 -0.9 -0.7 0.7 -0.1 0.9 0.2 1.1 0.8 0.7 -1.0 0.4
Var Q/Q-4 3.9 4.1 3.5 3.6 4.2 0.2 -1.4 -2.5 -3.4 -1.2 -1.0 0.8 1.7 2.1 2.9 2.8 1.6 0.9-6.0-4.0-2.00.02.04.06.0
-3.0-2.0-1.00.01.02.03.0
Percentage change compared to the same quarter in the previous 
year (Q/Q -4)Percentage change compared to the previous quarter (Q/Q -1)WT/TPR/G/383 • Ecuador  
 
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  1.22.   The GDP figures for the second quarter of 2018 can be explained chiefly by the performance 
of the non -oil sector, which recorded a 2.1 % growth, while the oil GVA fell by 8 % as a result of a 
decrease in production by Petroamazonas.  
Chart 1.5 Oil and non-oil GVA 
2007 = 100, year -on-year rates of change (Q /Q-4) 
 
Source:  Central Bank of Ecuador.  
1.23.   The Government's final consumption expenditure grew by 3.9 % year on year, while final 
household consumption grew by 3.3 %, gross fixed ca pital formation (GFCF) by 2.4 %, and exports 
of goods and services by 0.2 %. Moreover, imports of goods and services increased by 8.6 % 
compared to the same quarter in the previous year.  
1.24.   During the second quarter of 2018 , gross fixed capital formation (GFCF)  increased  by 
2.4% compared to the second quarter of the previous year (Q/Q -4) thanks  to investment in 
machinery and equipment, electrical apparatus and transport equipment, which grew 7 %, as well 
as the 10.2 % increase in imports.  
1.25.   GFCF in the construction sector grew by 1.1 % owing to the increase in the number of 
operations  in the private financial sector and the "popular and solidarity economy" targeting  social 
housing, which increased from 741 to 921. At the same time, building loans increased from 3,261 
in the second quarter of 2017 to 4,074 in the second quarter of 2018. Similarly, the GFCF for 
agriculture -related products increased by 1.4 %, with forestry production growing by 4.8 %. 
1.26.   Final household consumption expenditure  rose by 3.3 % owing to the increa se in the 
number of ordinary consumption credit transactions, which rose by 31.6 %, and priority consumption 
credit transactions6, which rose by 29.1 %. Another factor that stimulated household con sumption 
was family remittances  which, in the second quarter,  increased by 9.8 %, reaching a total of 
USD 767.3  million.  
                                                
6 Credits granted to natural persons for the purchase of goods and services or expenditures that are not 
related to production and commercial activities or other purchases and expenditures that do not fall within the 
ordinary c onsumption category, including inventory credits.  
2014
.I2014
.II2014
.III2014
. IV2015
.I2015
.II2015
.III2015
. IV2016
.I2016
.II2016
.III2016
. IV2017
.I2017
.II2017
.III2017
.IV2018
.I2018
.II
Non-oil GVA 3.7 4.3 4.7 5.2 5.5 2.1 -0.5 -2.0 -3.0 -1.9 -1.0 0.5 1.4 1.8 2.4 2.7 2.0 2.1
Oil GVA 10.6 6.2 -4.4 -4.6 -5.5 -6.0 0.5 0.8 2.2 6.3 1.0 3.3 -1.5 -1.0 -1.0 -5.6 -4.4 -8.0
GDP 3.9 4.1 3.5 3.6 4.2 0.2 -1.4 -2.5 -3.4 -1.2 -1.0 0.8 1.7 2.1 2.9 2.8 1.6 0.9-12.0-8.0-4.00.04.08.012.0
-6.0-4.0-2.00.02.04.06.0WT/TPR/G/383 • Ecuador  
 
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  1.27.   Meanwhile , real wages increased by 3.7 % between the second  quarter of 2017 and the 
second  quarter of 2018 , which , combined with the decrease in the Consumer Price Index (CPI) of 
0.7% during the same period, resulted in  an increase in household purchasing power.  
1.28.   In order to cover the collective services provided to the population free of charge (public 
administration, defence, internal and external security, etc.) and to individual s (health and 
educa tion), final Government consumption expenditure  increased by 3.9 % over the second 
quarter of 2017 ( Q/Q-4). There has been an increase in expenditure both on wages and on the 
purchase of goods and services.  
1.29.   Six-monthly information shows that Ecuador's GDP grew by 1.3 % in the first half of 2018 
compared to the first half of 2017.  
1.1.3   Economic policy  
1.30.   Ecuador's economy has been dollarized since 2000 and is highly dependent on oil income, 
making it more vulnerable to external crises. Faced with the need for a const ant flow of foreign 
currency and for measures  to mitigate the liquidity risk to which the country is exposed, Ecuador's 
trade and fiscal polic ies have focused on the sustainability of dollarization by optimizing the country's  
balance  of payments, promoting  foreign direct investment and maintaining a sustainable trade 
balance deficit.  
1.31.   In this context, the growth achieved between 2012 and 2017 was overshadowed by the critical 
economic situation of 20167, during which the economy contracted by 1.2 %, subsequent ly 
recovering with a 2.4 % growth  in 2017 . 
1.32.   For the Ecuadorian Government, it was essential to replace  the chiefly public -sector -driven 
economic model applied during that period with a model based on productive sector investment, in 
which dollarization would  be sustained chiefly by  agricultural exports, tourism, large -scale mining, 
oil production and the attraction of foreign investment  in general . 
1.33.   Against this backdrop, a plan was developed at the beginning of 2018 known as the 
2018-2021 Prosperity P lan, which aims to establish a solid institutional framework that will boost 
productive capital and produce a dynamic and diverse economy , providing  employment and 
development opportunities and contribut ing to the well -being of the population.  
1.34.   Although the country  did grow during the review period, this growth was accompanied by a 
high level of debt which led to imbalances in the country's fiscal accounts. This is why Ecuador is 
currently turning towards  measures reflecting  fiscal prudence and responsibility to guarantee its 
growth and prosperity.  
1.35.   As part of the fiscal sustainability component, the Prosperity Plan seeks to reduce the deficit 
by USD  1.3 billion per year, to achieve primary fiscal balance and an overall deficit of less than 1 % 
of GDP by 2021.  
1.36.   As regards expenditure, a State optimization plan has been implemented which provides for 
the elimination or merging of government entities (ministries, secretariats, institutes and agencies). 
Thought  is also being  given to liquidating or selling certain state -owned enterprises, and reducing 
current expenditures (travel, security, purchase of vehicles, publications, etc.).  
1.37.   As regards investment policy, between 2012 and 2017 Ecuador created a legal framework 
comprising  laws and regulations governing budgetary, t ax and tariff measures as well as measures 
to promote production. This legislation was strengthened by the adoption, in August  2018, of the 
so-called "Organic Law on the Promotion  of Production, Attraction of Investment, Generation of 
Employment, and Fisca l Stability and Balance", or the "Law on the Promotion  of Production".  
                                                
7 In 2016, a number of factors combined to undermine economic performance: there was a fall in the 
price of raw materials, including oil; the Ecuadorian oil basket price fell t o USD  21.58 per barrel 
(Januar y average); the dollar appreciated; and there was an earthquake on 16  April in the provinces of 
Esmeraldas and  Manabí.  WT/TPR/G/383 • Ecuador  
 
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  1.38.   The Law on the Promotion  of Production seeks to boost competitiveness, restore the fiscal 
balance and reduce the debt, and above all, to make investment more attractive . For example, al l 
new invest ments are exempted from income tax for 8 to 20 years, depending on the location of the 
investment, and the advance payment of income tax and windfall  tax has been abolished. This will 
help to relieve  the burden on enterprise and production , fostering competitiveness, investment and 
employment.  
1.39.   At the same time, efforts will be made to sustain public investment in infrastructure and other 
development projects thanks to private investment in the context of public -private partnerships 
(PPPs). Simil arly, changes are being introduced to the le gal and institutional framework  so that PPPs 
can contribute to optimizing the development of infrastructure projects with repayment capacity and 
private investment.  
1.40.   On the social policy front, Ecuador has maintai ned its commitment to enhance social 
protection by assigning additional resources to social programmes such as the so -called "Human 
Development Bond", which will help to narrow the poverty and extreme poverty gap.  
1.41.   Turning to trade policy, 1  January  2017 sa w the entry into force of the Multipartite Trade 
Agreement with the European Union which is expected to boost GDP by 0.1 % annually, consumption 
by 0.15 % and investment by 0.13 %, not to mention the knock -on effect on employment and income 
for the population . 
1.42.   The current strategy for international integration calls for an opening up of the country's trade, 
which has begun with the conclusion of a trade agreement with the European Free Trade Association 
(EFTA) , a request by Ecuador to become an a ssociate state of the Pacific Alliance, a trade agreement 
with India, and various other trade agreement negotiations that are on the country's trade agenda.  
1.2  Legislative framework  
1.2.1   2008 Constitution of the Republic  
1.43.   Ecuador is a constitutional State of laws and justice  that is social, democratic, sovereign, 
independent, singular , intercultural, plurinational and secular. It is organized as a Republic and is 
governed in a decentralized manner . It is made up of five branches: the Executive  branch,  headed 
by the President of t he Republic; the Legislative branch , headed by the National Assembly; the 
Judicial branch, made up of the Council of the Judiciary, the National Court of Justice, the provincial 
courts, t ribunals and magistrates' courts; the Electoral Branch, made up of th e National Electoral 
Council and the Electoral Court; a nd the  Transparency and S ocial Control branch , made up of the 
Council for Public  Participation and Social Control, the Office of Attorney for the Defen se of the 
People, the Comptroller General, and the Superintendencies.  
1.44.   The Constitution is the s upreme law for the application of regulations , followed by 
international treaties and conventions. Treaties and other international instruments on human rights 
are app lied in conformity with the Pro Homine  principle as well as the principles of  non-restriction of 
rights, direct applicability  and open clause set forth  in the Constitution. The rights enshrined in the 
Constitution are for immediate observance and enforceme nt. The judges, administrative authorities 
and public servants directly apply  the provisions of the  Constitution and those set forth  in 
international human rights instruments, as long as the latter are more favourable than those of the 
Constitution.8 
1.45.   The h ierarchical order continues with the organic laws; the regular laws; regional regulations 
and district  ordinances; decrees and regulations; ordinances; agreements and resolutions; and other 
actions and decisions taken by the public authorities. In the even t of any conflict between regulations 
from different hierarchical levels, the Constitutional Court, judges, administrative authorities and 
public  servants , it is settled b y applying the higher ranking rule.  
                                                
8 Articles  417 and 426 of the Constitution.  WT/TPR/G/383 • Ecuador  
 
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  1.46.   In 2008, in order to give effect to the rights es tablished in the Constitution, the economic 
system was defined as socially oriented and mutually supportive  (social and solidarity economy) , 
the idea being to establish a dynamic, balanced and harmonious relationship between society, the 
State, the market and nature. Thus, the Ecuadorian economic model advocate s the creation of 
opportunities by bringing together the public sector, the private sector, and the community in 
implementing the country's economic, monetary, credit and financial, and fiscal and trade policies . 
1.47.   The central government has exclusive jurisdiction over economic, tax, customs and tariff 
policies, fiscal and monetary policies, and foreign trade and debt9, and is responsible for promoting 
environmentally responsible exports that create more  employment and added  value , in particular 
exports from small and medium -sized producers.  
1.48.   Ecuador's economic policy ensures proper distribution of the country's income  and wealth, 
encouraging systemic productivity and competitiveness, the accumulation of s cientific and technical 
knowledge, and strategic integration into the world economy through a fair exchange of goods and 
services.  
1.49.   The country's fiscal policy objectives are the financing of services, investment and public 
goods, the redistribution of inco me and the creation of incentives for investment in the different 
sectors of the economy and for the production of goods and services that are socially desirable and 
environmentally acceptable.  
1.50.   Finally, under the Constitution, trade policy aims to develop , strengthen and give impetus to 
domestic markets on the basis of the strategic objectives set out in the National Development Plan 
(PND).  
1.2.2   National Development Plan 2017 -2021 "A Lifetime"  
1.51.   The National Development Plan is the instrument to which public poli cies, programmes, and 
projects, the programming and execution of the State budget, and the investment and allocation of 
public resources must adhere . The Plan is mandatory for the public sector.  
1.52.   The National Development Plan 2017 -2021 "A Lifetime" was drawn up on the basis of the 
government programme known as "A Programme for Society, Education, Production and Decent 
Work". In fact, the Plan was designed to implement the proposals put forward by the Government  
in this connection , which notably inclu de a number of emblematic projects such as the mentioned 
plan, "A Lifetime". The policies that shaped the Plan are national, and are the fruit of a 
comprehensive social and State management rational e which acknowledges the joint responsibility 
of different  functions of the State, levels of government, society and various economic operators in 
meeting the country's objectives and targets.  
1.53.   The National Development Plan goes hand in hand with the  national territorial strategy that 
rests on a methodological app roach made up of five components: biophysical/socio -cultural; 
economic/productive; human settlement and the built environment; and political/institutional.  
1.54.   The PND rests on three pillars : (i) rights for all throughout their lifetime; (ii) the economy at 
the service of society; and (iii) more society and better State. Each of these pillars, in its turn, 
comprises objectives and territorial guidelines, as described below.  
                                                
9 Article  261 of the Constitution.  WT/TPR/G/383 • Ecuador  
 
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  Table 1.1 National Development Plan "A Li fetime" 2017 -2021  
Pillar  Objectives  Territorial guidelines  Implementing 
arrangements  
Rights for all  
throughout their 
lifetime.  - Guarantee a decent life w ith 
equal opportunities for all.  
- Reaffirm interculturality and 
plurination ality with a greater 
focus on i dentit ies. 
- Guarantee the rights of current 
and future generations  to nature . Territorial cohesion with 
environmental 
sustainability and risk 
management.  - Intersectoral 
coordination agendas.  
 
- Sectoral and institutional 
plans.  
 
- National agendas for 
equality.  
 
- Social coordination 
agendas.  
 
- Land d evelopment and 
management plans.  
 
- Special plans for national  
projects of a strategic  
nature.  
 
- Differentiated territorial 
plans.  
 
- Border plans.  
 
- Land information 
system.  
 
- Programmes and 
projects with a territorial 
impact.  
 
- Follow -up and 
assessment . Economics at the 
service of society . - Strengthen the sustainability of 
the economic, social and solidarity  
system and strengthen 
dollarization.  
- Stimulate productivity and 
competitiveness for sustainable 
economic growth through 
redistribution and mutual support.  
- Develop production capacity and 
an environment conducive to 
achieving food sovereignty and 
quality of rural life.  Equitable access to 
infrastructure and 
knowledge.  
More society, better 
State . - Foster a participatory society 
with the State remaining  at the 
service of c itizens.  
- Promote transparency and 
co-responsibility for a new system 
of social ethic s. 
- Guarantee sovereignty and 
peace, and position the country 
strategically in the region and in 
the world.  Territorial management.  
Source:  National Planning and Development Secretariat (S ENPLADES ), National Development Plan 
2017-2021.  
1.55.   Of the PND's different pillars, one targets trade, namely pillar 2, "Economics at the service of 
society ", which is based on  the premise that economics should serve society through economic, 
monetary, exchange rate, credit and financial, and fiscal and trade policies. Each one of the 
objectives under pillar 2 in the table above is accompanied by specific policies and targets.  
Table 1.2 Pillar  2 Economics at the service of society  
Objective  Main policies  Main targets  
Strengthen the sustainability 
of the economic, social and 
solidarity system and support 
dollarization . - Channel economic resources into 
the production sector, promoting 
alternative sources of financing and 
long-term investment, with 
coordination between the State 
bank, the private financial sector 
and the popular and solid arity 
financial sector . 
- Strengthen the dollarization system, 
seeking to boost  net foreign 
exchange earnings and to 
strengthen the non -oil exportable 
supply and the net positive flow of 
public financing, while attracting 
foreign direct investment to 
guara ntee balance -of-payments  
sustainability . 
- Stimulate  long-term domestic 
private and foreign investment that 
will contribute to job creation and 
technology transfer.  - Reduce the non -financial public 
sector deficit by at least 0.41% 
by 2021.  
- Increase the trade 
balance -to-GDP ratio from 
1.26% to 1.65% by 2021.  
- Increase the ratio of the total 
amount of loan transactions in 
the commercial and producti on 
credit branches of the national 
financial sector to GDP from 
12.1% to 15.2% by 2021.  WT/TPR/G/383 • Ecuador  
 
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  Objective  Main policies  Main targets  
Stimulate productivity and 
competitiveness for 
sustainable economic growth 
through redistribution and 
mutual support . 
 - Increase  productivity and the 
generation of value added, creating 
differentiated incentive schemes for 
the production sector with a view to 
satisfying domestic demand and 
encouraging  strategic diversification 
of the exportable supply.  
- Promote research, education, 
training, development and 
technology  transfer , innovation and 
entrepreneurship, and protection of 
intellectual property with a view to 
contributing to the change in the 
production matrix by establishing a 
link between the public sector, 
industry and the universities.  
- Guarantee an efficient, steady  and 
safe supply of quality energy from 
diversified, efficient, sustainable and 
sovereign sources as an essential  
component of productive and social 
transformation.  - Increase electrical power 
generation from renewab le 
energy sources from 68.8% 
to 90% by 2021.  
- Increase the Information and 
Communication Technolog y 
Development Index from 4.6 
to 5.6 by 2021.  
- Increase the adequate 
employment rate from 41.2% 
to 47.9% by 2021.  
- Increase the ratio of direct 
investment in the production 
sector to non -oil GDP, in 
conditions that guarantee the 
inflow of foreign exchange , 
clean production processes,  
technology transfer and job 
creation by 2021.  
- Improve the National 
Productivity Index by 2021.  
Develop production capacity 
in an environment conducive 
to achieving food sovereignty 
and quality of rural life.  - Promote decent work and 
employment with emphasis on rural 
areas, building up production 
capacity, fighting casualization, and 
strengthening the State's targeted 
support while stimulating 
entrepreneurship.  
- Strengthen the organization, 
community development  and 
participation of small -scale and 
family farms in the food supply 
markets.  
- Improv e access, in rural areas, to 
health services, education, safe 
water, basic sanitation, public 
safety, social protection  and 
appropriately located quality 
housing, and promote connectivity 
and national road co nstruction.  - Increase the adequate 
employment rate in rural areas 
from 27.8% to 35.2% by 2021.  
- Improve the coverage  and 
quality of, and access to health 
services, justice and integral 
security , with due regard for 
cultural and territorial 
consideratio ns, in rural areas 
by 2021.  
- Reduce land consolidation 
by 2021.  
- Increase land ownership 
by 2021.  
- Reduce the intermediation 
margin on food products 
by 2021: improve the Terms of 
Trade Index.  
Source:  National Planning and Development Secretariat (S ENPLADES ), National Development Plan 2017 -2021.  
1.2.2.1   "Lifetime" Plan  
1.56.   The plan "A Lifetime" was introduced as part of the first pillar of the PND, "Rights for All for a 
Lifetime", which reflects Ecuador's social policy committed to promoting inclusiveness, equalit y, 
equity and justice leading to the elimination of barriers and the eradication of poverty. The Plan is a 
recognition that the guarantee of rights must be lifelong with emphasis, priority and focus on every 
moment of the life cycle. The Plan covers a seri es of specific programmes to guarantee the 
comprehensive development of children, to build up the capacity of young people and create better 
opportunities for them, to ensure the economic and social inclusion of pe ople with disabilities,  to 
guarantee the right to housing for the poorest and most vulnerable populations, to boost the 
productive capacity of persons receiving the Human Development Bond and the Joaquín Gallegos 
Lara Bond10, and to guarantee better living conditions and social i ntegration for the elderly.11 
                                                
10 The bond is intended for persons with a disability that meet the eligibility requirements.  
11 Report " Rendición de Cuentas" (Accountability Report) by the Technical Secretariat of "A Lifetime":  
https://www.todaunavida.gob.ec/wp -content/uploads/2018/03/Informe -Rendicio%CC%81n -Cuentas -
2017_APROBADO.pdf.  WT/TPR/G/383 • Ecuador  
 
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  1.57.   To implement the Plan, the President of the Republic issued an executive decree creating the 
"Technical Secretariat for the Life time Plan"12 as a technical body attached the Office of the President 
of the Republic and entrusted with ensuring progressive access by persons to their rights throughout 
their life  cycle by creating public policies for social and human development of the  population, and 
executing  the Plan in an effective, efficient and transparent manner, targeting grou ps with basic 
unmet needs who are at risk.  
1.58.   The Technical Secretariat was set up as the government body responsible for helping with the 
formulation of  public policy as well as  coordinating and implementing the various programmes and 
missions: the "ternura"  mission for ch ildren less than five years old;  the "joven" initiative for young 
unemployed persons from 18 to 29 years old; "less poverty, more development" for household s 
suffering from extreme poverty; "a house for all" targeting households with a short age of living 
space; "las manuelas" and "las joaquinas", which guarantee comprehensive care and social and 
economic inclusi on of persons with disabilities;  and "plan mujer" which targets society in general. 
These are projects that make it easier for popula tion groups suffering from extreme poverty to 
satisfy their basic needs.13 
1.2.3   Institutional changes: Executive Decree 520  
1.59.   On the basis of the State optimization plan, the Government issued Executive Decree No.  520 
of 20 September 2018 initiating the process wh ereby the Ministry of Foreign Trade and Investment 
took control, through a merger, of the Ministry of Industries and Productivity and the Institute for 
the Promotion of  Exports and Foreign Investment , becoming the "Ministry of Production, Foreign 
Trade and  Investment".  
1.60.   Once this takeover merger has been completed, all of  the powers, functions, responsibilities, 
representations and delegations of the Ministry of Industries and Productivity and the Institute for 
the Promotion of Exports and Foreign Investment provided for in  the different laws, decrees, 
regulations and othe r legislation in force will be taken over by the Ministry of Production, Foreign 
Trade and Investment.  
1.61.   The Decree also provides for the transformation of the Ministry of Aquaculture and Fisheries 
into the Technical Secretariat of Aquaculture and Fisheries  as a technically, operationally and 
financially autonomous public law entity attached to the Ministry of Production, Foreign Trade and 
Investment14 which controls aquaculture and fisheries activities in accordance with the law and other 
regulations in forc e. The National Fisheries Institute is attached to the Ministry of Production, Foreign 
Trade and Investment.15 
                                                
12 By Executive Decree No. 07 of 24 May 2017, the Ministry of Social Development Coordination became 
the Technical Secretariat of the "Lifetime" Plan, attached to the Office of the President of the Republic.  
13 Technical Secretariat, "A Lifetime": https://www.todaunavida.gob.ec/valores -mision -vision.  
14 Before 16 June 2017, this was known as the "Ministry of Agriculture, Livestock, Aquaculture and 
Fisheries" to which the "Vice -Ministry of Aquaculture and Fisheries" belong. With Executive Decree No. 6 , 
published in Official Register No. 16, second supplement, of 16 June 2017, the Vice -Ministry was split from the 
Ministry, creating the "Ministry of Aquaculture and Fisheries" as the entity responsible for managing and 
executing aquacultural and fisheries  policy.  
15 The National Fisheries Institute was created by Executive Decree No. 582 of 5 December 1960, 
published in Official Register No. 105 of 5 January 1961, for the purpose of research and the promotion of 
Ecuadorian fisheries. By Decree No. 6 of 2017 , the Institute was attached to the Ministry of Aquaculture and 
Fisheries.  WT/TPR/G/383 • Ecuador  
 
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  1.62.   The Decree also provides for the creation of the Interinstitutional Committee for Aquaculture 
and Fisheries as a collegiate body of the Executive branch responsible for the Government's 
aquaculture and fisheries policies16, made up of representatives of the Ministry of Production, Foreign 
Trade and Investment (Chair); the Ministry of Agriculture and Livestock; and the Ministry of 
Transport and Public  Works, as well as a representative of the fisheries and aquaculture sectors.  
2  TRADE ENVIRONMENT AN D TRADE POLICY  
2.1  Trends in foreign trade and investment  
2.1.  During the period 2012 -2017, the end result of the country's overall trade balance varied: from 
2012 to  2015 it posted a deficit, while from 2016 onwards it was in  surplus. The non -oil trade balance 
posted a structural deficit, an indication of how important oil exports are in the country's total 
exports, as can be seen in the charts below.  
Chart 2.1 Ecuador's overall trade balance with the rest of the world, 2012 -2017  
(USD million ) 
 
 
Source:  Central Bank of Ecuador.  
                                                
16 Prior to the institutional changes introduced by Decree No. 520, the Ministry of Aquaculture and 
Fisheries was responsible for formulating, planning, directing, managing and coor dinating the implementation 
of guidelines, plans, programmes and projects relating to the aquaculture and fisheries sector. In other words, 
it was the governing and implementing body for aquaculture and fisheries policy.  
2012 2013 2014 2015 2016 2017
EXPORTS 23,765 24,751 25,724 18,331 16,798 19,122
IMPORTS 24,018 25,536 26,224 20,324 15,418 18,877
TRADE BALANCE -253 -785 -499 -1,994 1,380 246-5,00005,00010,00015,00020,00025,00030,000WT/TPR/G/383 • Ecuador  
 
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  Chart 2.2 Ecuador's non -oil trade balance with the rest of the world, 2012 -2017  
(USD million ) 
 
Source:  Central Bank of Ecuador.  
2.2.  As regards Ecuador's total exports with the rest of the world,  during the review period 
(2012 -2017) , export  revenue averaged USD 21,415  million. The main destinations for Ecuador's 
exports were: the United  States (40%), the European Union (13%), Chile (8%), Peru (7%), and 
Colombia (4%). During the period, the share of exports to the European Union, Viet Nam and China 
increased, while the share of exports to the United States, Chile, Colombia and Peru decreased.  
2012 2013 2014 2015 2016 2017
EXPORTS 9,973 10,644 12,449 11,670 11,338 12,209
IMPORTS 18,568 19,666 19,865 16,421 12,928 15,677
TRADE BALANCE -8,596 -9,022 -7,416 -4,750 -1,589 -3,468-15,000-10,000-5,00005,00010,00015,00020,00025,000WT/TPR/G/383 • Ecuador  
 
- 18 - 
 
  Chart 2.3 Trend in Ecuador's overall exports according to country of destination, 
2012 -2017  
(USD million ) 
 
Source:  Central Bank of Ecuador.  
2.3.  At the same time, the data revealed that since 2016, the European Union has become the main 
destination for non -oil exports, followed by the United States. Non -oil exports have also increased 
in markets such as Viet Nam , Russia , China  and Argentin a during that period.  
United
StatesEuropean
UnionChile Peru Colombia PanamaRussian
FederationViet Nam China JapanOther
countries
2012 10,586 2,455 1,991 1,991 1,056 923 695 143 392 657 2,876
2013 11,013 3,011 2,457 1,901 912 626 813 322 564 572 2,559
2014 11,212 2,981 2,328 1,582 951 1,398 828 607 485 326 3,027
2015 7,197 2,773 1,138 934 784 442 716 785 723 331 2,508
2016 5,411 2,832 1,151 934 810 662 769 1,116 656 320 2,136
2017 6,025 3,173 1,236 1,283 763 936 845 1,458 772 389 2,24202,0004,0006,0008,00010,00012,000WT/TPR/G/383 • Ecuador  
 
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  Chart 2.4 Trend in Ecuador's non -oil exports according to country of destination, 
2012 -2017  
(USD million ) 
 
Source:  Central  Bank of Ecuador.  
2.4.  As can be seen from the chart below showing the main destinations for Ecuador's exports in 
2012 and 2017, the markets whose share of total Ecuadorian exports increased were the 
European  Union and Viet Nam. The other countries' shares remained practically t he same.  
Chart 2.5 Ecuador's m ain export destinations, 2012 and 2017  
 
Source:  Central Bank of Ecuador.  
2.5.  A product breakdown of non -oil exports reveals that the trend or performance of traditional 
export products like bananas and plantains, cocoa and cocoa products, tuna and other fish, shrimp, 
and coffee and coffee products , together with non -traditional products , was similar throughout the 
review period.  
European
UnionUnited
StatesColombiaRussian
FederationViet Nam Venezuela China Chile Peru ArgentinaOther
countries
2012 2,455 2,220 1,051 695 143 910 212 335 335 105 1,512
2013 2,723 2,484 902 813 322 461 258 389 397 143 1,751
2014 2,947 3,445 945 828 607 564 427 338 295 196 1,857
2015 2,773 3,039 778 716 785 326 564 256 255 216 1,965
2016 2,832 2,583 804 769 1,116 144 424 264 264 218 1,921
2017 3,173 2,591 747 845 1,458 50 430 278 307 270 2,06005001,0001,5002,0002,5003,0003,5004,000
1%2%3%3%4%4%8%8%10%45%
Viet NamChinaJapanRussian FederationPanamaColombiaChilePeruEuropean UnionUnited States2012
2%4%4%4%5%6%7%8%17%32%
JapanColombiaChinaRussian FederationPanamaChilePeruViet NamEuropean UnionUnited States2017WT/TPR/G/383 • Ecuador  
 
- 20 - 
 
  Chart 2.6 Performance of Ecuador's non -oil exports, 2012 -2017  
(USD million ) 
 
Source:  Central Bank of Ecuador.  
2.6.  As can be seen  below , in 2017 products such as shrimp, tuna, roses, metal manufactures, fresh 
bananas, vegetable oils and raw gol d continued to make up a significant share  of Ecuador's export 
basket, whose composition is practically identical to 2012. What varied, in some cases, was their 
share in total exports.  
Chart 2.7 Main export pr oducts, 2012 -2017  
 
Source:  Central Bank of Ecuador. Prepared by: Ministry of Foreign Trade and Investment of Ecuador.  
02004006008001,0001,2001,4001,6001,8002,000
Bananas and plantains Cocoa and cocoa products Coffee and coffee products
Shrimp Tuna and other fish Non-traditional
20%
13%
8%
5%5%
4% 4% 3%3% 3%2012
25%
22%
9%
5%5%
3% 2% 2% 2%1%2017WT/TPR/G/383 • Ecuador  
 
- 21 - 
 
  2.7.  While it is true that there has been a slight diversification in Ecuador's exportable basket, the 
share of the new product supply has not yet caught up with the share of products considered to be 
traditional. In 2012, Ecuador's overall exports totalled USD  23,765  million, and by the close of 2017 
they were down to  USD 19,122  million. At the same time , there has been a deconcen tration of 
export destinations: in 2012, the concentration index17 stood at 0.23, while in 2017 it was down to  
0.15.  
Chart 2.8 Ecuador's exports to the rest of the world and number of products exported, 
2012 -2017 
 
Source:  Central Bank of Ecuador.  
2.1.1   Trend in imports  
2.8.  According to the Classification by Economic Use or Destination (CUODE), most of the country's 
imports are raw materials, capital goods for industry and non -durable consumer goods. Although 
they vary, there has been a notable downward trend over the last two  years of the period, from 
USD 9,867  million in  2012 to USD  8,384  million in 2017. Their share in total imports has remain ed 
stable at approximately 54%.  
                                                
17 The concentration index ( Herfinda hl-Hirschman ) is a value between zero and one which indicates each 
country's share as a destination for Ecuador's exports, with one indicating maximum concentration and zero 
perfect deconcentration.  
23,765 24,751 25,724 
18,331 
16,798 19,122 
3,116 3,230 3,238 
3,187 3,415 
3,272 
 2,900 3,000 3,100 3,200 3,300 3,400 3,500
 - 5,000 10,000 15,000 20,000 25,000 30,000
2012 2013 2014 2015 2016 2017
Total exports Number of productsWT/TPR/G/383 • Ecuador  
 
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  Chart 2.9 Ecuador's imports by economic use or destination , 2012 -2017  
(USD million)  
 
Source:  Central Bank of Ecuador.  
2.1.2   Trade in services  
2.9.  During the period 2012 -2017, the balance of trade in services was in deficit. Service exports 
grew at an average year -on-year rate of 5.4%, while for service  import s the annual rate  was 0.8%. 
For 2017 , the flow of services imports ( USD 3,296  million ) was still greater than that of services 
exports ( USD 2,300  million ). 
Table 2.1 Balance of trade in services  
(USD million)  
Activity   2012  2013  2014  2015  2016  2017  Average 
growth  
(%) 
 Servic es supplied
 (exported )  1,804 2,041 2,346 2,391 2,140 2,300 5.4% 
 Transport  409 436 437 444 410 414 0.3% 
 Travel   1,033 1,246 1,482 1,551 1,444 1,657 10.4% 
 Other services   363 359 427 396 286 229 7.4% 
 Services received  
  (import ed)  3,198 3,461 3,517 3,197 3,194 3,296 0.8% 
 Transport  1,708 1,709 1,744 1,510 1,238 1,471 -2.1% 
 Travel   611 622 635 639 661 688 2.4% 
 Other services   879 1,130 1,138 1,048 1,295 1,136 6.5% 
 BALANCE   -1,394 -1,420 -1,171 -805 -1,054 -996 -4.3% 
Source:  Central Bank of Ecuador.  
877 924 998 610 379 435 2,024 2,082 2,099 1,504 1,176 1,842 2,773 2,875 2,891 
2,592 2,066 2,412 1,864 1,761 1,840 1,393 
946 1,243 1,096 1,162 1,377 1,256 1,152 1,298 9,867 10,706 10,479 8,931 7,130 8,384 
0%10%20%30%40%50%60%70%80%90%100%
2012 2013 2014 2015 2016 2017
RAW MATERIALS AND INTERMEDIATE GOODS FOR INDUSTRY AND CAPITAL GOODS FOR INDUSTRY
RAW MATERIALS AND INTERMEDIATE GOODS FOR AGRICULTURE AND CAPITAL GOODS FOR AGRICULTURE
TRANSPORT EQUIPMENT
FUELS, LUBRICANTS AND RELATED PRODUCTS
NON-DURABLE CONSUMER GOODS
DURABLE CONSUMER GOODS
BUILDING MATERIALSWT/TPR/G/383 • Ecuador  
 
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  2.10.   Turning to foreign direct investment (FDI) , between 2012 and 2015 there was a sustained 
growth in FDI flows at an average rate of 35%, as a result of the improving performance of the 
national economy. In 2015, FDI flows increased by 71% thanks to investments in  mining and 
quarrying activities, manufacturing, and business services.  
Chart 2.10 Foreign direct investment in Ecuador  
(USD million)  
 
 
Source:  BCE-SIGADE, Agency for Hydrocarbons Regulation and Control (ARC H), Hydrocarbons Secretariat 
(SHE) , and the Supervisory Authority for Companies, Securities and Insurance (SCVS) – 1/data 
subject to revision, October  2018. Prepared by the Ministry of Foreign Trade and Investment of 
Ecuador.  
2.11.   During the period 2012 -2017, the main activity attracting FDI flows was mining and 
quarrying , with a 47% share and a cumulative value of USD  2,254.28  million for the period, followed 
by the manufacturing industry , with a share of 17% and a cumulative value of USD  827.08  million, 
and trade, with a share of 15% and a cumulative value of USD  739.2  million.  
2.12.   Holland was the main country of origin of the FDI received between 2012 and 2017, with an 
18% share of the total and a value of USD  860.4  million, followed by China with an 11% share an d 
a value of USD  521.7  million.  
567.5 727.0 772.3 1,322.5 
767.4 
618.4 
02004006008001,0001,2001,400
 2012  /1  2013  /1  2014  /1  2015  /1  2016  /1  2017  /1WT/TPR/G/383 • Ecuador  
 
- 24 - 
 
  Chart 2.11 Main sources of foreign investment in Ecuador  
Source:  Central Bank of Ecuador.  
2.2  Trade policy and integration  
2.13.   In its efforts towards strategic integration in the worl d economy, Ecuador has drawn up an  
agenda of negotiations aimed at reinforcing  its main export destinations while opening up new 
markets, diversifying its export basket and, through the reforms  it has undertaken at the domestic 
level, creating a stable leg al environment for FDI.  
2.14.   Ecuador has concluded trade agreements under various different  integration schemes:  
(a) free trade agreements with the European Union; (b) partial scope agreements with Chile, 
MERCOSUR, Mexico, Cuba, Guatemala, El Salvador and Nicaragua; and (c) customs unions under 
the Andean Community with Bolivia, Colombia and Peru. The Comprehensive  Economic Partnership 
Agreement with the European Free Trade Association (EFTA) will enter into force  once it ha s been 
approved by the various parliaments . Negotiations are under way with South Korea and Turkey. The 
current government has applied to become an associate member of the Pacific Alliance, a bloc made 
up of Colombia, Chile, Mexico and Peru: negotiations a re expected to begin in the first quarter of 
2019. Ecuador is conducting evaluations with India prior to the initiation of negotiations, which would 
take place during 2019.  
2.15.   Similarly, Ecuador has expressed its interest in negotiating trade agreements with the 
United  States, the Eurasian Economic Union, Canada, Japan, Costa Rica and the Dominican Republic.  
2.3  Progress in implementing the Trade Facilitation Agreement  
2.16.   The WTO Trade Facilitation Agreement (TFA) was approved by the National Assembly  in 
accordance  with Ecuador's internal procedures for ratifying international instruments , and will shortly 
be notified to the WTO, once the process has been completed .  
Holland
18%
China
11%
United States
10%
Spain
9% Uruguay
6%Canada
6%Peru
5%Italy
4%Mexico
4%Chile
4%Other
23%WT/TPR/G/383 • Ecuador  
 
- 25 - 
 
  2.17.   Ecuador join ed the consensus to approve the TFA in Bali, and has notified its category  A 
measures. It will notify i ts category B and C measures once it has notified the ratification of the 
Agreement. The TFA represents an opportunity to improve the trade facilitation measures applied 
by the national authoritie s both at the border and internally. Ecuador has progressed considerably 
in this respect, acting long before the Bali Agreement. For example, starting in 2011 it introduced 
the automatic inspection channel, which initially provided a basis  for 36% of clearances, 
subsequently increasing to 56%. This e nabled Ecuador to introduce a risk profile based on concurrent 
control in accordance with objective facilitation and control criteria.  
2.18.   October 2012 saw the implementation of the first part of the "Ecuapass" customs system, 
which brings together all of the  different commercial  platforms and services to enhance the 
facilitation and control of customs transactions.  
2.19.   The implementation of Ecuador's Single Window for Foreign Trade (VUE) began in 
November  2012, bringing together 23 government entities in order to  optimize, automate and 
facilitate foreign trade operations.  
2.20.   The implementation of the new customs system, the VUE and the new customs legislation 
marked the fulfilment of a number of objectives linked to the modernization of Ecuador's customs 
system, inc luding:  
• introduction  of the automatic inspection channel (green channel);  
• introduction  of the non -intrusive channel (X -ray); 
• introduction  of guaranteed  payment;  
• implementation of payment facilities;  
• procedural manuals and system instructions published on t he SENAE website;  
• "Ecuapass" electronic customs system based on the WCO data model version 3.0;  
• Ecuadorian Single Window (VUE) for foreign trade formalities based on the WCO data 
model version 3.0;  
• SENAE Mobile (application for mobile devices) ; 
• introductio n of the Authorized Economic Operator (OEA) programme for a first "exporters" 
link; 
• implementation of SENAE Tracking;  
• introduction of citizen oversight for inspections;  
• implementation of an integrated consultation system (call centre, service desk);  
• introduction of online auctioning;  
• extended weekend services .  
2.21.   All of these tools have a direct influence on trade facilitation and have made it possible to 
tighten customs control while saving a significant amount of time and resources for foreign trade 
operators and the Ecuadorian Government.  WT/TPR/G/383 • Ecuador  
 
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  2.4  Related policies  
2.4.1   Investment  
2.4.1.1   Regulatory framework for foreign investment  
2.22.   29 December 2010 saw the entry into force of the Organic Code of Production, Trade and 
Investment (COPCI)18, which regulates the production proce ss at the stages of production, 
distribution, exchange, trade, consumption, management of externalities and productive investment 
designed to achieve Good Living. The Code stipulates that foreign investment shall serve as a direct 
complement in strategic s ectors of the economy which require investment and financing in order to 
achieve the objectives of the National Development Plan.  
2.23.   On 18 December 2015, the National Assembly of Ecuador approved the draft Organic Law on 
Public -Private Partnership and Foreign  Investment  Incentives19 with a view to introducing a number 
of incentives for the implementation of projects through  public -private partnerships and establishing 
the necessary  guidelines and institutional structures. Generally speaking, this  Law promotes the 
financing of production and national and foreign investment, and seeks to boost private sector 
participation in the country's development with increased participation of the traditional economic 
operators wherever public and private inves tment can work together to stimulate the local 
production base and the national economy.  
2.24.   On 22 December 2017, by Executive Decree No. 252, the attraction and promotion of 
investment for the purpose of ensuring the complementarity of development objectives and 
strategies to generate employment and promote the inflow of foreign exchange was declared a State  
policy. Accordingly, the Strategic Committee for the Promotion and Attraction of Investment (CEPAI) 
was created as an intersectoral coll egiate body of the  Executive branch responsible for institutional 
coordination for the purpose of promot ing, attract ing, facilitat ing, concretizing  and maintain ing 
foreign investment in Ecuador; approv ing investment projects; and help ing with the implementation 
of investmen ts. The Ministry of Foreign Trade was appointed as the competent authority in 
investment matters.  
2.25.   On 21 August 2018, the Law on the Promotion of Production, Attraction of Investment and 
Generation of Employment20 entered into force. Its purpose is to stimul ate the economy and promote 
investment, employment and long -term fiscal sustainability by adapting the legal framework 
governing the country's economic, financial and productive activities in order to provide legal 
certainty and security as a means of favo uring investment, employment and increased 
competitiveness in the country's production sector.  
2.4.2   Agriculture and livestock  
2.26.   Agriculture is one of the country's most important activities, since not only does it provide 
food and raw materials, but it also cont ributes to economic and productive development and food 
security, helps to reduce poverty and vulnerability in the rural areas, and creates employment 
opportunities for a large part of Ecuador's population. The economically active population linked to 
agriculture currently totals about 2 million, so that 2 7% of Ecuador's  employment is linked to 
agricultural production, which is of vital importance to the country's economic development in terms 
of job creation  and foreign exchange at the primary and industri al levels. Over the past decade, the 
Ecuadorian agricultural sector has helped to reduce rural poverty from 61% to 38%. In spite of this 
progress, however, it is in rural areas that the highest levels of inequality  and extreme poverty are 
still to be found .  
2.27.   During the period from 2012 -2017, the average contribution of the agricultural sector to GDP 
was 8.04%, with an average year -on-year growth rate of 2%. The agricultural trade balance was 
positive, with an average year -on-year growth rate of 7% for expor ts and 1% for imports. The main 
agricultural exports were bananas, flowers and cocoa beans, while the main imports were soya bean 
oilcakes, wheat and animal feed. The main trading partners were the United States, the 
European  Union, Russia, Peru and Chile.  In 2017, the agricultural sector accounted for 51% of 
                                                
18 Official Register, Supplement No. 351.  
19 Official Regis ter, Supplement No. 652, 18 December 2015.  
20 Published in the Official Register, Supplement No. 309 of 21 August 2018.  WT/TPR/G/383 • Ecuador  
 
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  non-oil exports and 32% of total exports (USD 6,244 million). Agricultural imports accounted for 
16% of non -oil imports and 13% of total imports (USD 2,566 million).  
2.28.   Surface area expansion is one of t he pillars of the agricultural sector, and has the potential to 
guarantee Ecuador's food security. According to the National Institute of Statistics and Censuses 
(INEC -ESPAC) , in 2017 the country had 8.3 million hectares at its disposal for agricultural purposes, 
such as permanent crops, transitional crops, and natural and cultivated pastures. This represents an 
11% increase in the surface area for agricultural use since 2012 (7 million hectares). The most 
important crops for the domestic market are: rice, sugarcane, plantains, maize, tomatoes, onions, 
potatoes and cassava. The most extensively grown crops include cocoa (177,551 mt/year), rice 
(1,714,892 mt/year), African palm (3,124,069 mt/year), dry hard maize (1,319,379 mt/year), 
bananas (6 ,529,676 mt/yea r), plantains (6 10,413 mt/year).  
2.29.   The challenges facing the Ecuadorian agricultural sector are linked to the following variables: 
(i) sustainability in public policy; (ii) strengthening of markets and marketing; (iii) strengthening of 
the popular and solid arity economy; (iv) reduction of extreme poverty; (v) strengthening of unions 
and associations; (vi) access to resources: land and water; (vii) urban migration/generational 
problems; (viii) innovation and increased sustainable productivity; (i x) value adde d and new market 
demands; (x) financial inclusion; (xi) climate change and its impact.  
2.30.   Accordingly, the Ministry of Agriculture and Livestock (MAG), the agency responsible for 
agricultural policy in the country, is seeking to strengthen Ecuadorian agricult ure through effective 
public policies aimed at improving productivity, democratizing the factors of production, facilitating 
access to markets and strengthening community development. For example, programmes such as 
the so-called Gran Minga Nacional Agrope cuaria  (GMNA) is one of the most important public policy 
tools for boosting agricultural development in priority territories  in order to strengthen the sector in 
a viable and sustainable manner by improving competitiveness and productivity, democratizing 
access to non -financial services, making efficient use of natural resources, expanding access to the 
means of production without discrimination as to gender, generation or culture, in tune with nature 
and with an emphasis on rural family agriculture, which represents 75% of production units and is 
responsible for approximately 60% of the food consumed in the country. The GMNA is a mutually 
supportive and sustainable agricultural modernization strategy which coordinates the various public 
policies and instrum ents to the benefit of Ecuadorian rural areas, and in particular, of producers 
linked to rural family agriculture.  
2.31.   The main objectives of the GMNA are: (a) to reduce extreme poverty; (b) to generate 
employment; (c) to increase productivity and agricultural exports. The key is to realign agricultural 
policy with national development interests in order to guarantee susta inable and comprehensive 
progress in rural areas, access to healthy food , and improved living conditions for the population.  
2.32.   The GMNA's strategies are based on the following  priority axes : market access, technical 
assistance, community development, researc h, and quality, as well as irrigation and land, which are 
essential factors in increasing productivity, building technical capacity and ensuring the efficient 
management of agricultural production resources. The key is to achieve and promote the 
modernizat ion of agriculture in the country on the basis of competitiveness, sustainability and equity, 
in keeping with objectives such as food sovereignty and security and the strengthening of exports.  
2.33.   At the same time the Ministry of Agriculture and Livestock , in keeping with these strategies, 
is focusing its efforts on stimulating the development of the agricultural sector, reducing rural 
poverty, generating employment and improving rural welfare. These efforts can be subdivided into 
three main categories:  
• Market s: improve access to local and international markets, emphasizing the small and 
medium -sized producers and associations and mitigating the impact of market failures 
and excessive involvement of intermediaries. This requires coordination of supply and 
deman d, and the promotion of associat ive activities  and mechanisms to facilitate 
marketing and help strengthen family agriculture networks, certifications for product 
differentiation and market  access, etc.  
 WT/TPR/G/383 • Ecuador  
 
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  • Institutions : strengthen the agency responsible for agricultural policy (MAG), ensuring 
that it operates rationally, institutionalizing projects and strengthening the institutions 
involved (the Agency for the Regulation and Control of A nimal and Plant Health 
(AGROCALIDAD ) and the National Agricultural Research Institute (INIAP) ) in order to 
consolidate publ ic policy efforts on the ground.  
• Services : strengthen production systems and stimulate the rural and marginal urban 
economies by developing non -financial services such as research, pest and disease 
control, training and advisory services, marketing and promotion, etc., to be 
implemented by the MAG and its agencies (AGROCALIDAD and INIAP) in coordination 
with the decentralized autonomous government s, universities, technological i nstitutes, 
private entities, and other local stakeholders.  
2.4.3   Industry  
2.4.3.1   Agro -industry  
2.34.   In 2015, the Ministry of Industry and Productivity, together with the Coordinating Ministry for 
Production, Employment and Competitiveness, dr ew up Ecuador's Industrial Policy  2016-2025, 
containing public policy guidelines to strengthen and enhance the industrial sector by strengthening 
local export -oriented chains. The policy was formulated on the basis of a general analysis of the 
country's in dustry involving the identification of priority sectors for generating employment  and 
improving the level of jobs produced by the economy, namely agro -industry, intermediate and final 
industries,  and basic industries.  
2.35.   In the agro -industrial sector, priorit y has also been given to value chains and establishing  
specific strategies tailored to  the requirements of each one of the chains.  
2.36.   Industrial Policy was updated in 2018, maintaining the priority sectors as proposed in 2016 
and basing public polic y strategi es on five  pillars: investment, productivity, quality, innovation and 
markets. The chief aims are added  value , diversification , and capacity building for competitive and 
innovative integration in new markets. Cross -cutting  policies were also introduced wit h respect to 
incentives/business climate, foreign trade, human talent, and financing. Finally, in updating 
industrial policy, priority was also given to sectoral policies, which in the case of agro -industry 
involved the introduction of technical tools to a chieve differentiation, improve cost competitiveness , 
and help develop innovation projects.  
2.37.   According to the Economic Commission for Latin  America and the Caribbean, the 
agro-industrial chain includes more deprived social segments working directly in the a gricultural 
area. Hence the need to ensure that chains are prioritized not only for their immediate contribution 
to the economy, but also for their potential contribution to social inclusion and exports. There are 
two challenges that are common to the chai ns and that public policy needs to address, namely l ow 
productivity and poor interconnection  between agriculture and agro -industry, and the introduction 
of more dynamic products in markets that contribute to increasing revenue without increasing the 
curren t quantity of products exported.  
2.38.   For Ecuador, agro -industry, i.e. the processing of agricultural, livestock, forestry, aquaculture 
and fisheries products, has been identified as one of the most important sectors because it is a major 
generator of employmen t, accounting for 32% of the country's manufacturing workforce and 
contributing significantly to industrial GDP. Indeed, it accounted for 43% of non -oil industrial gross 
value -added. The most important goods for foreign trade are the product of processing chains in 
aquaculture (shrimp), fish eries (canned  fish), palm (palm oil) and coffee (soluble  coffee ). This is the 
only sector of industry with a positive trade balance.  
2.39.   National development policies will be focusing  on a number of growth -limiting factors t hat 
have been identified in the agro -industrial sector and will seek to introduce measures to eliminate 
them: low competitiveness and limited product diversification; exports consisting predominantly of 
raw materials with low value -added; and the high cost  of raw materials in total production costs.  WT/TPR/G/383 • Ecuador  
 
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  2.40.   Against this backdrop, a number of development measures have been taken to address these 
limitations affecting  the agro -industrial sector, inter alia: 
• Defining priority chains: promoting the comprehensive development of certain 
agro-industrial chains, seeking to contribute equally to all of their components: cocoa, 
coffee, dairy products, bioenergy, aquaculture and fisher ies, palm oil and meat products.  
• Introducing technical differentiation tools: placing a variety of products internationally 
known for their high quality in specialized markets by adopting differentiatio n criteria such 
as traceability;  designation s of origin ; and fair trade, organic, s ustainable, etc. 
certifications.  
• Setting up an Interministerial Technical Committee for the Promotion  of Competitiveness 
in the Agro -Industrial Chain: formulation of an efficient policy that provides for support 
via a "chain" approach that maintains the link with the competitiveness of the primary 
sector and the competitiveness of industry a nd trade.  
• Development of innovation projects for agro -industry: creation of a tripartite National and 
International Innovation Network (P ublic-Industry Universities ) with a view to identifying 
and adopting new technologies to improve and develop new products and processes aimed 
at enhancing the value -added and diversification of producti on. 
2.4.4   Fisheries and Aquaculture  
2.41.   Fisheries and aquaculture are among the most dynamic sectors  of Ecuador's economy. In 
2012, they generated USD  2,863 million  worth of foreign exchange, representing 12.05% of the 
country's total exports. The following years brought sustainable growth, especially in the aquaculture 
sector, and by 2017, fisheries and  aquaculture had grown by 60.56% in comparison to 2012, 
reaching a total value of USD  4,597  million, or 24.04% of the country's total exports. In terms of 
contribution to national GDP, aquaculture and fisheries products accounted for 3.26% in 2012, and 
4.41% in 2017, by which time aquaculture had become the main non -oil foreign exchange earner.  
2.42.   98% of the aquaculture sector consists of shrimp farming, while the remaining 2% consists 
of low temperature species (trout) and tropical species such as tilapia, ca chama (tambaqui), and 
paiche (arapaima), to name but a few. In 20 10, shrimp farming produced 175,000  tonnes, a figure 
which rose to 491,000  tonnes by 2017, a growth of approximately 180%. The aquaculture sector 
accounted for more than a 180 ,000 direct and indirect jobs in areas that are not used for agriculture. 
In the fisheries sector, exports consist mainly of canned tuna and fresh and frozen fish. In 2010, the 
sector generated USD  957 million worth of foreign exchange. Exports peaked in 2014 at 
USD 1,694  million, while in 2017, fisheries exports totalled USD  1,569  million. The fisheries sector 
provides 300 ,000 to 350 ,000 jobs. 
2.43.   The Under -Secretariat for Fisheries is the authority responsible for Ecuador's fisheries policies. 
The main legal instrument gover ning the sector is the 1974 Law on Fishing and Fisheries 
Development and its latest amendmen ts issued by Presidential Decre e No. 852 introducing 
amendments to the General Regulations implementing the Law on Fishing and Fisheries 
Development of 2015, which included definitions of illegal, unreported and unregulated fishing 
(IUU fishing) in the country's legislation. A new law on fisheries has been submitted to the national 
authorities who are currently reviewing the bill for submission to the National Assemb ly for approval.  
2.44.   For years, Ecuador has adhered to the principle of sustainable development of resources in 
all phases of its fisheries activities by applying the management measures set out in its domestic 
legislation and in the resolutions issued by the Regional Fisheries Management Organizations 
(RFMOs), thereby ensuring sound management and conservation of fisheries resources.  
2.45.   In addition, the national authorities are working in accordance with the international standards 
of the Marine Stewardship Council (MSC) to develop Fishery Improvement Projects (FIPs) for the 
management of its resources.  WT/TPR/G/383 • Ecuador  
 
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  2.46.   Illegal, unreported and unregulated fishing (IUU fishing) is present in all fisheries, and 
represents a direct and significant threat both to management effor ts and to the sustainability and 
conservation of fishery resources and marine biodiversity . To counter that threat, Ecuador has taken 
important steps in terms of international cooperation to combat, prevent and eliminate IUU  fishing.  
2.47.   On 7 December  2016, Ec uador joined the Agreement for the Implementation of the Provisions 
of the UN Convention on the Law of the Sea of 1 0 December  1982 relating to the Conservation and 
Management of Straddling Fish Stocks and Highly Migratory Fish Stocks.  
2.48.   Other actions by Ecuador for the sustainable management of its  fisheries include the 
National  Plan of Action to Prevent, Deter , and Eliminate Illegal , Unreported and Unregulated Fishing 
(NPOA -IUU) in 2015, which set out the country's policy for combating IUU in the territo rial waters 
of Ecuador and the adjacent high seas . This instrument is compatible with the FAO's International 
Plan of Action to Prevent, Deter, and Eliminate Illegal, Unreported and Unregulated Fishing 
(IPOA -IUU) as well as regional and international fishe ries regulations.  
2.49.   Similarly, steps have been taken towards the domestic ratification  of the Agreement on 
Port States Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing, 
which is currently being examined in the Commission o n Sovereignty, Integration, International 
Relations and Comprehensive Security of the Ecuadorian National Assembly . Ratification should be 
completed in 2018.  
2.50.   Ecuador has implemented a control system for aquaculture and fisheries exports and imports 
(tracea bility, monitoring, control and surveillance) which has helped to identify the potential risks 
involved in the harvesting and sale of products . This system is supplemented by domestic legislation 
requiring compliance with procedures such as catch reporting , declaration of origin (farmed or wild), 
traceability and establishment regulations . It is further strengthened through the enforcement of 
sustainability and health laws and resolutions based on international standards and those applied by 
the leading des tination markets, such as the European Union, the United States and certain countries 
of South America . These provisions guarantee that the products entering the country are the product 
of legal and certified activities.  
2.51.   Labour policy is a cross -cutting is sue in Ecuador's economic and productive activities . In the 
case of fisheries, a number of international provisions have b een adopted, such as Convention  112 
concerning the Minimum Age for Admission to Employme nt as Fishermen, and Convention  126 
concerning  Accommodation on Board Fishing Vessels . On the domestic front, Ecuador has partnered 
with different domestic and international NGOs and civil society organi zations to develop the 
National  Plan for the Prevention and Progressive Eradication of Child Labour  in Ecuador (PETI), which 
has been implemented through a variety of projects culminating with the current "Project to 
Eradicate Child Labour 2014 -2017".  
2.4.5   MSMEs, C rafts and the Popular and Solidarity Economy (EPS)  
2.52.   Between 2012 and 2016, the number of enterpr ises in Ecuador increased by more than 12% 
from 749,912 to 843,745 . Of these enterprises, 99.54% are MSMEs . In 2016, 8.62% of the MSMEs 
belonged to the manufacturing sector, i.e. 72,735 . As of June 2018, 13,845 of them belonged to the 
Popular and Solidar ity Economy Sector, and of those, 7,573 (54%) were involved in production, and 
5,703 (41%) in services.  
2.53.   Through its Under -Secretariat for MSMEs and Crafts, the Ministry of Industry and Productivity 
is responsible for promoting the development of MSMEs, Artis anal Production Units and EPS units21: 
it will formulate public policies and devise strategies to stimulate, formalize and boost the production 
capacity of the enterprises concerned, creating production networks and chains that will help them 
to integrate i n domestic and international markets.  
                                                
21 The body responsible for promoting the development of MSMEs will be decided or ratified on the basis 
of Executive Decree No. 520 of 2 0 September  2018. WT/TPR/G/383 • Ecuador  
 
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  2.54.   To that end, a number of projects and programmes have been introduced to promote 
production and trade, for example:  
• MiproLab Project : promotion of responsible productive activity generating business 
models that are att ractive to investors, through strategic partnerships with universities, 
the public and private sectors, and the stakeholders of the entrepreneurship and 
innovation ecosystem, in order to ensure that emerging innovative project s receive 
comprehensive suppor t. 
• ENCADENA Project : the purpose of this project is to encourage and establish the 
necessary conditions for the development of competitiveness and productivity in the 
industrial and manufacturing sectors . The idea is to generate, within the companies, 
conditions conducive to linking the MSMEs, crafts and EPS to large -scale industry.  
• Non-Project Project : this project is co -financed with non -repayable international 
cooperation funds targeting association proposals to help to improve and innovate the 
country's  production processes.  
• Exportafacil Programme : to simplify export procedures and send products abroad 
through th e mail service.  
2.4.6   Manufacturing  
2.55.   The manufacturing sector's share in GDP (excluding oil refining) varied between 11.5% to 
11.8% during the period 2012-2017, with its share in employment following much the same pattern, 
fluctuating between 10% and 11%.  
2.56.   In 2012, manufacturing exports – excluding oil refining – totalled USD 6.7  billion , reaching 
their peak in 2014 with USD 8.2  billion  before falling ba ck to USD 7.4  billion  in 2017 . This 
represented 27.2% of total merchandise exports in 2012, and 38.5% in 2017.  
2.57.   The overall objective of Ecuador's industrial policy is to promote the integration of high 
value -added manufactures in global markets . Since 2010 , the production sector has been supported 
by a legal framework (Organic Code of Production, Trade and Investment ; Organic Law on Incentives 
for Public and Private Partnerships ; Organic Law on Solidarity and Citizen Co -Responsibility), and 
that legal frame work is currently being strengthened by other legal initiatives, such as the Law on 
the Promotion of Production, Attraction of Investment and Generation of Employment.  
2.4.7   Ecuadorian quality system and technical regulation  
2.58.   In order to  provide legal certainty, confidence and transparency, the Government of Ecuador 
has been working on a proposal to reform the national quality system so that it meets the needs of 
the production sector in terms of regulations and quality, thereby helping p roducers to strengthen 
their presence in domestic and international markets . The starting point of the reform process is the 
country's current regulatory framework, the WTO Agreement on Technical Barriers to Trade, and 
international agreements on technical  regulations.  
2.59.   The L aw on the Ecuadorian Quality  System is currently being reviewed and updated with a 
view to : promoting trade liberalization and gaining access to world markets by complying with the 
requirements of the destination markets and internationa l agreements ; acknowledging  the leading 
role of the private sector  in the Ecuadorian Quality System ; strengthening market control and 
surveillance mechanisms in order to guarantee consumer access to safe and ce rtified quality 
products and adopting  internat ional standards as a means of ensuring access to international 
markets for products manufactured in the country ; and establishing good regulation practic es. 
2.60.   Alongside these efforts, Ecuador is pursuing a process aimed at  improving its t echnical 
regulations  (RTE INEN) – notified to the WTO – that are already in force or that are at the draft 
stage . The main purpose of this reform is transparency, and to ensure that technical regulations 
fulfil the legitimate objectives for which they were created and that th ey are in line with the 
international agreements, using international regulations where appropriate ; and the ado ption of WT/TPR/G/383 • Ecuador  
 
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  good regulatory practic es. The Government hopes that the  improvements will benefit the 
stakeholders in  the production chain, i.e. regul ators, producers, importers, traders and consumers.  
3  CONCLUSIONS  
3.1.  The review period can be divided into two clear ly defined stages which reflect  the development 
of the Ecuadorian economy . The first of these stages, from 2010 to 2014, saw an annual average  
GDP growth  rate of 5.2 % (according to ECLAC data, higher than the Latin  American average of 
3.5%), driven, among other variables, by the high price of oil and greater fiscal space for public 
investment . During this period, poverty decreased from  36% in 2009 to 22.5 % in 2014 . 
The Gini inequality coefficient fell from 0.5 to 0.47.  
3.2.  During the second stage, which began in 2015, the economy lost its momentum . It grew by 
0.1% in 2015 and then contracted by 1.2 % in 2016 , as a result of  exogenous factors such as the 
appreciation of the dollar at a time when the neighbouring countries were depreciating their 
currencies ; a sharp fall in the price of crude oil ; a significant drop in export revenue ; and serious 
damage and losses suffered as a result of the earthquake in April  2016.  
3.3.  Reacting to these developments, Ecuador changed its economic development model and 
undertook a series of reforms to improve the investment climate and promote private sector 
participation, convinced that the public  sector could no longer continue to be the driver of economic 
growth that it had been over the past decade . The new model was based on investment in the 
production sector,  and in order to sustain dollarization,  it relied chiefly on agricultural exports, 
tourism, large -scale mining, oil production and the attraction of foreign investment  in general . 
3.4.  Since  the new Government took over in May  2017, a number of measures have been introduced 
to support the production sector. In current terms, GDP reached USD  104,296 million and recorded 
an increase of 2.4 % in constant term s, driven chiefly by a year -on-year growth of 5.3 % in 
investment and 3.7 % in private sector consumption.  
3.5.  Moreover, the need for a constant flow of foreign exchange to maintain dollarization has meant 
that trade and fiscal policy has had to concentrate on optimizing the balance of payments, promoting 
foreign direct investment and maintaining a sustainable trade deficit.  
3.6.  Ecuador's investment policy has produced a legal framework of laws and regulat ions to guide 
and support budgetary, tax and tariff measures as well as measures to promote production . These 
laws were further strengthened by the adoption, in August  2018, of the so -called Organic Law on 
the Promotion of Production, Attraction of Investm ent, Generation of E mployment and Fiscal Stability 
and Balance, which seeks to boost competitiveness, restore the fiscal balance and reduce debt, and 
above all, to improve the mechanisms for attracting investment, in orde r to relieve some of the 
burden  on business and manufacturing – in other words, to boost competitiveness, investment and 
employment.  
3.7.  As regards strategic integration in the global economy, Ecuador has redefined its negotiating 
agenda in order to consolidate its main export destinations and open up new markets, diversify its 
export basket and, through domestic reform, create a stable legal environment to attract FDI.  
3.8.  At the same time, Ecuador will seek to sust ain public sector investment in  infrastructure and 
other development projects throug h private investment under the Public -Private Partnership (APP) 
scheme.  
3.9.  On the social front, it is worth highlighting  Ecuador's "Plan Toda una Vida" (Plan for a Lifetime) , 
which is a reflection  of Ecuador's social policy committed to inclusion, equality, e quity and justice 
with a view to eliminating barriers and eradicating poverty.  
__________