WORLD TRADE  
ORGANIZATION   
G/C/W/669 
26 April 2012 
 (12-2231) 
Council for Trade in Goods Original: Spanish 
  
 
STATEMENT BY ECUADOR ON AGENDA ITEM 7 OF THE MEETING OF THE 
COUNCIL FOR TRADE IN GOODS ON 30 MARCH 2012:  ECUADOR 
MIXED TARIFFS - QUESTIONS FROM THE UNITED STATES, 
THE EUROPEAN UNION, CANADA, JAPAN AND PANAMA 
  
 The following statement delivered by Ecuador at the meeting of the Council for Trade in 
Goods on 30 March 2012, is being circulated at  the request of the delegation of Ecuador. 
 
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  First of all, we thank the EU and the other c ountries that have expressed interest in this matter 
for convening and coordinating an informal consu ltation meeting with Ecuado r, which took place on 
23 March.  Ecuador wishes to emphasize that it agre ed to these informal consultations since it is open 
to discuss this matter of concern to all th ose present and to Ecuador in particular. 
 
 As regards the aspects of Ecuador's trade policy relating to trade in goods, my country wishes to highlight the fact that it is currently engage d in introducing far-reaching reforms of its legal, 
production and social frameworks, in order to a ddress Ecuador's economic and business realities more 
effectively.  In view of the foregoing, Ecuador believes that the WTO Members should consider these 
major reforms in the light of  the flexibilities provided for the developing countries under the 
multilateral rules contained in Part IV of the GATT 1994.   Under this new approach, the ai m of trade policy is to achieve efficient integration into the 
international economy so as to enable Ecuador to overcome its status as an agricultural exporting 
country.  We are seeking broad and mutually suppor tive integration that reinforces the country's own 
development, restoring the balance in its geopolitical relations in the international context.  Key areas 
for action have been defined that are not only aimed at diversifying products and markets but also at 
concluding strategic alliances with countries so as  to promote the complementarity of economies 
through production chains and reducing asymmet ries by recognizing differences in size and in 
development. 
 
 One of the most important features of Ecua dor's economy is that it does not have its own 
currency and uses the United States dollar for everyday  purposes.  For Ecuador, this has had two basic 
effects:  it no longer has its own monetary policy and cannot make use of monetary instruments to 
manage the economy.  It has also meant that Ecuador's economy increasingly depends on the 
performance of its external sector. 
  Since Ecuador adopted the dollarization regime, foreign trade has become even more important for the domestic economy as it is largel y responsible for the flow of foreign currency 
circulating in the country.  Since its previous  TPR, Ecuador's openness index rose from 53.2 per cent 
in 2005 to 63.3 per cent in 2010.  The country's ove rall trade balance has been in deficit in recent 
years, which is a matter of considerable concern.  This contrasts with the non- oil trade balance, which G/C/W/669 
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  is characterized by a structural deficit, thus accen tuating the importance of oil sales with respect to 
other products.   As we have already pointed out in this Comm ittee, foreign trade figures once again show that 
trade flows in the 349 products subject to compound tari ffs have not actually been affected.  In fact, as 
noted in the second Trade Policy Review of Ecua dor conducted on 14 November 2011, the year 2011 
saw an increase of around 64 per cent in imports of apparel, 33 per cent for footwear and 11 per cent 
for textiles, compared to 2010.  
 2009 2010 2011 
APPAREL 67,723.93 112,777.74 185,179.49 
 67% 64% 
TEXTILES 30,430.17 22,625.56 25,084.98 
 -26% 11% 
FOOTWEAR 50,269.84 87,853.03 116,794.20 
 75% 33% 
TOTAL 148,423.95 223,256.73 327,059.42 
Source : Central Bank of Ecuador.  Prepared by the DDC.  Values in US$ '000. 
 
2009 2010 2011
IMPORTS 148,424 223,256 327,059 ‐ 50,000 100,000 150,000 200,000 250,000 300,000 350,000US$ THOUSAND  F.O.B.
 
 
 A detailed review of the statistical data on imports from each of the countries that have 
expressed trade concerns reveals the following:  
 As regards Canada, imports of footwear from Canada into Ecuador amounted to US$550 in 
2009 and to US$1,550 in 2010, rising to US$21,060 in 2011;  imports of textiles amounted to 
US$46,670 in 2009, US$69,720 in 2010 and US$171,0 50 in 2011;  and imports of apparel amounted 
to US$52,340 in 2009, US$88,870 in 2010 and US$83,740 in 2011.  
 As regards the United States, imports of footwear amounted to US$1,025,780 in 2009, 
US$1,785,110 in 2010 and US$1,355, 380 in 2011;  imports of textiles amounted to US$1,675,580  G/C/W/669 
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  in 2009, US$1,269,160 in 2010 and US$759,460 in 2011;  and imports of apparel amounted to 
US$2,432,400 in 2009, US$4,328,920 in 2010 and US$8,904,350 in 2011.   As regards Japan, there were no trade flows corresponding to footwear in 2009 or 2010, but 
in 2011, with the compound tariffs in effect, impor ts amounted to US$14,020;  imports of textiles 
amounted to US$210 in 2009, US$6,690 in 2010 and US $3,000 in 2011;  lastly, imports of apparel 
amounted to US$79,600 in 2009, US$152,370 in 2010 and US$217,150 in 2011.   As regards the European Union (i.e. Spain, Germany, Italy, France and the United Kingdom), 
imports of footwear amounted to US$471,390 in 2009, US$769,290 in 2010 and US$976,430 
in 2011;  imports of textiles amounted to US$314,500 in 2009, US$276,530 in 2010, reaching 
US$161,010 in 2011;  lastly, imports of appa rel amounted to US$1,177,920 in 2009, around 
US$1,033,520 in 2010 and rose to US$1,391,480 in 2011.   Consequently, we need not stress that the tr end in global trade flows concerning tariff lines 
subject to compound tariffs over the three-year pe riod 2009-2011 shows a significant, continuous and 
growing increase which confirms the fact that tr ade flows with Ecuador have not actually been 
affected.   Tariffs are one of Ecuador's key trade policy instruments, particularly as it has no monetary 
policy.  The average MFN applied tariff fell fro m 11.4 per cent in 2005 to 9.2 per cent in 2011 and 
almost 54.5 per cent of applied MFN tariff rates curr ently range from 0 to 5 per cent.  Moreover, the 
average rate applied to industrial imports fell by three percentage poi nts to 7.6 per cent.  The applied 
rates ranging between 0 and 5 per cen t covered 53 per cent of tariff headings.  There are tariff quotas 
for 17 agricultural products, but these have not been used.  
 As regards the reference to document TN/MA/20, we consider it useful to clarify its object 
and scope.  First of all, the doc ument is derived from the Ministerial mandates established in the 
Doha Development Agenda and from Hong Kong pa ragraph 17 in particular, which, in turn, 
implements Annex B, paragraph 5, of the July Package of 2004.   We can thus deduce that the draft guidelines are not  legally binding, since they are not part of 
the outcomes of the Uruguay Round and consequently do not form part of the WTO covered 
Agreements.  On that basis, neither Ecuador nor any other Member is under any obligation to follow 
or implement them.   Rather, the above document is simply a tool to  be used as a means of arriving at concrete 
tariff results as part of the implementation of th e NAMA modalities, which, as we all know, have 
been impossible to achieve after more than ten years of negotiations.   As regards the assumption that the unilatera l implementation of document TN/MA/20 should 
be seen as a good practice to be followed by Memb ers, Ecuador recognizes the sovereign right of 
Members to decide, establish and implement their trade policies according to their own needs and 
circumstances;  in our view, it is  therefore appropriate to undersco re that just as we respect and 
recognize this sovereign right, the rest of the Member ship is under the same obligation to respect the 
sovereign decisions taken by Ecua dor and the way in which it deem s it most suitable to convey such 
information to Members.  
 These decisions are consistent with its commi tments under the multilateral trading system and 
in keeping with the economic and social realities of a small country with a marginal share - in the case 
of non-agricultural products - of much less than 1 per cent of international trade in such products. 
 G/C/W/669 
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   Ecuador regards the mixed-tariff measure s adopted in May 2010 and implemented in 
June 2010 as consistent with the disciplines of th e multilateral trading system and the WTO covered 
Agreements.   Article X of the GATT 1994 merely requires the publication of trade measures that may have 
an impact on trade, and, as we have already po inted out, these were duly published and made public. 
  Ecuador reiterates that the commitments set fo rth in the WTO Agreements do not in any way 
prevent a Member from revising or modifying its tari ff structure in the light of its economic, trade and 
social circumstances.  It therefore also considers th at the measures described comply with Article II of 
the GATT 1994. 
  The situation also needs to be assessed in th e light of the Ecuadorian economy's special and 
particular circumstances, considering that, among ot her factors, Ecuador has no monetary policy of its 
own on account of the dollarization of its economy.  Lastly, it is easy to see that, by publishing the 
trade measure in question, Ecuador has fully complied with the commitments and obligations 
established in the GATT 1994.   Both in the explanations above and in t hose provided during the second Trade Policy Review 
of Ecuador, my delegation underlined the fact that  there had been no impact on the trade flows of 
Members which have expressed concer ns about the issue before us. 
 
 The foregoing bears witness to the fact that th e tariff reform introduced by Ecuador in 2010 
which modified the tariff structure for certain non-ag ricultural products is consistent with the rights 
and obligations prescribed in the GATT 1994.  
 This is all the more true if one considers that the measure has not affected trade flows with 
interested Members.  Foreign trade statistics show that trade in these products  continues to increase, 
proving that there is no real or potential trade problem between Ecuador and its partners.  For 
example, a forecast for imports in 2011, using fi gures from the Central Bank of Ecuador, shows that 
total imports of made-up textile articles will increas e by around 55 per cent, 45 per cent for footwear 
and 30 per cent for textiles, compared to 2010. 
 
 Ecuador is reviewing the situation regarding these products on a case-by-case basis.  For example, a modification of the tariff on jute ba gs, which would do away with the existing compound 
tariff and introduce a 30 per cent ad valorem  tariff, along with a zero per cent tariff deferral up to 
December 2014, is scheduled to be introduced shor tly.  Furthermore, Ecuador will soon be reviewing 
the tariff structure in respect of 19 selected tari ff lines, such as those relating to television sets. 
  In conclusion, Ecuador believes that the measure  adopted to restructure the tariff is entirely 
consistent with its obligations under Articles II a nd X of the GATT 1994.  Nonetheless, as a sign of 
my country's sensitivity to the concerns expressed by  several Members, we repeat that Ecuador is 
willing to address any specific concerns that Memb ers may have regarding individual products of 
particular interest to them on an ad hoc basis a nd where the statistical data substantiate a marked 
decline in trade flows to Ecuador.  
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