WORLD TRADE  
ORGANIZATION  WT/TPR/M/226 
10 March 2010 
 (10-1279) 
Trade Policy Review Body 
10 and 12 February 2010  
 
 
 
TRADE POLICY REVIEW 
 
EL SALVADOR 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr Istvan Major (Hungary) 
  
  
Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON ................................................................... 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF EL SALVADOR.................................... 4 
III. STATEMENT BY THE DISCUSSANT ............................................................................................... ... 8 
IV. STATEMENTS BY MEMB ERS...................................................................................................... ...... 10 
V. REPLIES BY THE REPRESENTATIVE  OF EL SALVADOR AND ADDITIONAL 
COMMENTS ....................................................................................................................... ................... 31 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON ...................................................................... 37 
 
Note:   Advance written questions by WTO Member s and the replies provided by El Salvador are 
reproduced in document WT/TPR/M/226/Ad d.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/226 
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  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The third Trade Policy Review of El Salvador was held on 10 and 12 February 2010.  The 
Chairperson, H.E. Mr Istvan Major (Hungary), welc omed the delegation of El Salvador, headed by 
Mr Mario Roger Hernández, Vice-Minister of the Economy, and the Discussant, H.E. Mr Yi-Fu Lin 
(Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The Report by El  Salvador is contained in document WT/TPR/G/226 
and that of the WTO Secretariat in document WT/TPR/S/226. 
3. Questions by the following delegations had been  submitted in writing at least two weeks in 
advance and had been transmitted to the delegation of El Salvador:  Guatemala;  Mexico;  Brazil;  
Colombia;  Canada;  Hong Kong, China;  Argentina;   Chile;  Japan;  the United States of America;  
the European Union;  the Dominican Republic;  th e Separate Customs Terr itory of Taiwan, Penghu, 
Kinmen and Matsu;  and Ecuador. 
4. The delegations of Peru;  India;  and the Do minican Republic (additional questions) submitted 
written questions after the two-week deadline. 
5. The Chairperson noted that he had read with great  interest the reports prepared by El Salvador 
and the Secretariat.  The two reports noted the progress El Salvador had made since its previous 
Review in 2003 with respect to the modernization and liberalization of its trade regime.  El Salvador 
was closely integrated in the global economy, and had been considerably affected by the international 
economic crisis.  In this respect, he would like to  commend El Salvador on not having resorted to the 
use of trade protective measures to address the effect s of the crisis, particularly considering that 
El Salvador had no independent monetary policy th at may have helped to offset such effects. 
6. The Government and Secretariat Reports also emphasized El Salvador's commitment to the 
multilateral trading system, which goes hand-in-hand w ith its participation in the Central American 
Common Market.  In this respect, aligning El Salv ador's multilateral commitments with its relatively 
liberal trade regime for goods and services would resu lt in enhanced transparency and predictability.  
He believed Members would be interested in h earing El Salvador's views in this regard. 
 WT/TPR/M/226 
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  II. OPENING STATEMENT BY THE REPR ESENTATIVE OF EL SALVADOR 
7. For our country, the trade policy mechanism is a hi ghly valuable exercise  in transparency in 
the multilateral trading system, an exercise in whic h we, as a country, are taking part for the third 
time, in the firm belief that through it the Memb ers of the WTO can become better acquainted with 
the substantial progress made by El Salvador in this r espect.  We also believe that this exercise is one 
of the central pillars of transparency that gove rns this Organization and its Member countries. 
8. It is important to commence this exercise by re ferring to the special historical circumstances 
in which we have found ourselves in recent months and which provide the context for this Review of 
El Salvador's trade policy.  The unprecedented global economic crisis we have experienced has had an 
impact on all the world's economies, but particularly developing economies. 
9. This economic crisis, which has affected El Sa lvador, constitutes a daunting challenge for all 
governments, particularly that of President Funes,  who took office in El Salvador in June 2009 
following an election process considered to be histor ic in the Central American region both in terms 
of the transparency of the results and the rein forcement of democracy, but even more especially 
because it represented an important exercise in democracy, namely alternation after 20 years of 
exercise of power by one particular political party, leading to a change in the political environment and in the Legislature.  This alternation to ok place under entirely normal political conditions and 
participation by the people. 
10. This notable progress in Salvadoran democracy nevertheless took place in an extremely 
complex environment in which the global economic a nd financial crisis affected various social and 
economic components in the Central American region.   I should like, if you will allow me, to expand 
a little on these important issues. 
11. I am sure that all those present are well info rmed about the global economic crisis, but for 
El Salvador and the region it affected our economi es in four ways.  The first was the fall in 
international demand, particularly for our export pro ducts.  Secondly, this crisis reached our country 
as a result of the sharp decrease in flows of foreign di rect investment.  Thirdly, the fall in commodity 
prices, and fourthly, the reduction in the flows of  remittances and the reve nue generated and earned 
through tourism, thereby completing the scenario of the way in which the economic crisis affected our 
country.  Furthermore, businesses have had to f ace a sizeable decrease in lines of credit and 
international financing. 
12. These channels of transmission have been partic ularly marked in the country.  According to 
preliminary figures from the Central Reserve Bank of El Salvador, average growth fell by around 3.3 per cent in 2009, exports contracted by 16.5 per cent and imports by 25.6 per cent.  Nevertheless, some data show a recovery in our economy for 2010,  naturally in line with the signs of recovery seen 
in the global economy and particularly  among our main trading partners. 
13. As can be seen, the impact of the crisis is no less for countries such as El Salvador and no less 
for countries in the Central American region.  It poses an enormous challenge to work actively and 
creatively in political spheres to draft and implem ent economic, social and trade policies of direct 
benefit to the population, but especially to those who have seen their incomes fall and their jobs 
disappear as a result of the economic crisis.  In this  respect, it is important for the multilateral trading 
system, as the leading body for regulating trade amo ng Members, to play an active and decisive role 
to prevent the application of protectionist measur es that hinder economic re covery in developing 
countries, as was seen from the monitoring of the cr isis conducted by the Director-General of the 
WTO.  WT/TPR/M/226 
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  14. It is obvious that there are no magic formulas  to overcome the problems.  El Salvador 
considers that overcoming the economic crisis necessa rily calls for the drafting and implementation of 
a series of economic policy measures, including trade, monetary, fiscal and social measures, but transparent and responsible measu res essentially aimed at generati ng appropriate conditions not only 
for competition, innovation or investment in trad e-related spheres but also  to enhance the human 
development of society and its members.  Such a responsibility is not only incumbent upon countries 
but also upon international organizations such as th e WTO, which have a decisive and active part to 
play in promoting development and trade as an engine for growth. 
15. In this connection, one of the major challenges f acing us is to unite our forces in trade-related 
matters through effective utilizati on of the benefits derived from fr ee trade.  To achieve this, the 
current administration is working on the implem entation of a strategy to promote production and 
investment that will allow our country to raise th e levels of quality and productivity and introduce 
cross-sectoral processes for innovation and technology  that provide new ways of achieving economic 
growth.  The aim of this initiative is to build  production and export cap acity, particularly among 
micro, small and medium-sized enterprises, to allo w them to compete in international markets using 
tools that are consistent with the rules of multilateral trade. 
16. Since the previous Trade Policy Review, El Salvador has strived to raise the human 
development index of its population and, consequently, there has been a considerable improvement in 
the living standards of many Salvadorans. 
17. We are making our best efforts to comply with  the Millennium Development Goals, and like 
others in the community of nations we see them as an  achievable objective.  Although it is true that 
substantial progress has been made, we are st ill facing redoubtable challenges because the 
achievements made in the area of human developm ent cannot be considered sustainable if we 
continually have to contend with external f actors that diminish any benefits achieved. 
18. The Salvadoran Government will continue to st rive hard to alleviate poverty and will pursue 
its efforts in areas such as agri culture, food safety, education, health, the environment and security, 
inter alia . 
19. In recent years, El Salvador's economy has grow n at a relatively steady pace and this has been 
achieved by seeking and consolidating access to fore ign markets, as well as full participation in the 
Central American and regional integration system and a stronger democratic system. 
20. Our country has focused its efforts on implem enting many initiatives intended to facilitate 
trade, promote free competition among economic agen ts, update its intellectual property protection 
regime and improve the business climate through ec onomic stability and progress in legal security. 
21. Some of the other measures we could mention th at have been implemented to facilitate trade 
are the rapid clearance or "Courier" system;  th e one-stop shop for exports  and imports;  advance 
decisions;  computerization of customs clearance for goods;  risk management systems;  authorized economic operators;  electronic payment of customs declarati ons.  These measures are also 
incorporated into the relevant Central American  legislation - in the Uniform Central American 
Customs Code and its implementing regulations - toge ther with the impetus in the Central American 
region for coordinating the operations of customs wh ich act as peripheral, juxtaposed and integrated 
customs, inter alia , which will allow exporters and importers  to comply with customs procedures 
rapidly and expeditiously and at lower cost. 
22. In addition, the Government Procurement and Contracting Law and its implementing 
regulations have provided a transparent and stable  framework for government procurement with the WT/TPR/M/226 
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  aim of developing a computerized government pr ocurement system, which has started to be 
implemented through the so-called "COMPRASAL" system. 
23. In relation to intellectual prope rty, El Salvador has made considerable progress, notably by 
ratifying the amendment to the TRIPS Agreement which, once it enters into force, will allow 
Members with limited capacity for producing medici nes to grant compulsory licences on a permanent 
basis for the import of medicines in order to  meet serious public health situations. 
24. The main objective of El Salvador's trade polic y is to promote, facilitate and reinforce the 
country's integration into the global economy by in tensifying flows of trade and investment between 
El Salvador and the rest of the world and by further developing the Central American economic 
integration process.  After 50 years of economic inte gration, countries in the region have increased 
their production capacity, developed their industry, strengthened their infrastructure, built up the 
labour force and generated regiona l production chains.  Central Amer ican economic integration has 
helped trade to become an engine for development for the peoples in the region. 
25. El Salvador is counting on Central American integration as the integration process that will 
become the route to development for our countries.  C onsequently, it is our prior ity.  Integration is not 
a simple and linear process and cannot be compared to  other processes.  It has its own rhythm, its own 
style and its own challenges.  We are clearly awar e of its potential.  The major challenges facing our 
region in areas that go beyond trade such as climate change, security, the drugs traffic or migration can only be resolved at the regional level.  This  is why El Salvador is determined to boost the 
Customs Union. 
26. The principal lines of our trade policy ar e expanding access to external markets for 
Salvadoran products and services by taking advantage of free trade.  To date, El Salvador has signed 
or is negotiating a number of bilate ral agreements with its main tr ading partners, which provide for 
closer relations in non-trade areas as well.  These ag reements seek to liberalize trade flows in goods, 
services and investment, in strict compliance with the parameters laid down in this Organization, 
establishing new mechanisms for association in the political and cooperation spheres. 
27. Many of the questions which Members put to El Salvador essentially concern El Salvador's 
position in regard to foreign trade.  Allow me to describe briefly El Salvador's orientation in this 
respect.  El Salvador has strategic ambitions in  foreign trade and these focus on a series of key 
processes which, in an integral and compleme ntary manner, facilitate qualitative and quantitative 
changes in the country's current production structure.   Foreign trade policy is marked by five pivotal 
components. 
28. First, the need to invest in the country's pr oduction.  Although it is true that production sectors 
are the real actors in international trade, it is im portant to increase production by means of a series of 
international trade-related tools and policies designed to facilitate the expansion of trade and raise it to 
a higher level of development and competitiveness.  Government investment is intended to give the 
competent institutions the technical and financial ca pacity they need to provide standardized and 
specialized international trade services.  In this  connection, there must be a solid institutional 
framework from the State downwards so that, on the basis of the principle of subsidiarity, production 
sectors can be strengthened, while remaining consiste nt with the relevant international commitments. 
29. The second pivotal component is that El Sa lvador's foreign trade should incorporate 
innovation and transfer of technology.  The real challenge for small, ope n developing countries 
exposed to ever greater external competition, su ch as ours, is to generate new innovative production 
processes.  This needs to be accompanied by a national system for improving the quality and 
competitiveness of products and services.  Conseque ntly, the second wager is to develop a solid and 
consistent national programme for quality, productivity and innovati on and to build human resources  WT/TPR/M/226 
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  from and for the production sectors.  In this respect, it is particularly important to put into effect the 
multilateral mechanisms for the transfer of technology. 
30. The third major challenge facing El Salvador as far as foreign trade is concerned is to 
strengthen and create better jobs.  The measures take n to support the export sector should be directed 
to creating a solid basis for exports and measurable and real increases in value added for products and 
services to be exported, taking into account re gional challenges and the potential of the various 
sectors in El Salvador's production structure.  Conse quently, the third wager is to develop a strategy 
for exports and for attracting investment that ge nerates good jobs and is fully integrated with a 
socio-economic development programme that lowers  the levels of poverty and inequality in the 
country. 
31. The strategy on foreign trade and attracting inv estment, as the fourth component of our trade 
policy, should reinforce the integration of production.   It is important to start from El Salvador's 
production base in order to reinforce the interna tionalization of enterprises, especially small and 
medium-sized enterprises.  The fourth wager therefor e is to develop a strategy that includes all sectors 
and boosts production chains, business alliances, associa tions and, in short, gives a dynamic impetus 
to intrasectoral relations.  Because of our experience  of production chains, this is one area on which 
we are focusing closely. 
32. Lastly, another component of our trade policy is utilizing free trade agreements.  Given the 
international trade scenario in which our country w ill find itself in years to come, the strategy should 
focus on deriving maximum benefit from trade opport unities for Salvadoran products and services and 
on attracting and retaining investment.  Strategies to  alleviate the negative impact of international 
trade need to be developed.  The fifth wager is  therefore to lay down the bases for implementing a 
systemic approach to promotion and internationali zation of strategic sectors in countries and/or niche 
markets where there are obvious comparative a dvantages.  Consequently, utilizing free trade 
agreements and strengthening Central American inte gration are central elements of this strategy. 
33. Aware of the benefits and opportunities which global trade can offer to El Salvador, we 
reaffirm our commitment to the Doha Round in orde r to achieve a fair and balanced outcome that 
takes into account the needs of developing countries.  In this connection, we will continue to promote 
our interests, mainly through groups of countries with which we share similar interests and the Group 
of Small and Vulnerable Economies and the G-33. 
34. We firmly believe in the development di mension as an intrinsic criterion for this 
Organization's work, and we are, therefore, making e fforts to ensure the incorporation of this concept 
into each and every one of the areas that govern th e multilateral trading system so that it becomes a 
concrete component that responds to the legitimate needs of developing countries. 
35. As was stated at the Seventh Ministerial C onference of this Organization, El Salvador 
considers it necessary to evaluate the contribution of  the multilateral trading system to mitigating the 
negative effects of the crisis and to ensuring that its benefits are utilized to the full inasmuch as trade 
can contribute towards the prosperity of peoples, prov ided that it is conducted fairly and equitably and 
that the special needs and situations of  the poorest countries receive priority. WT/TPR/M/226 
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  III. STATEMENT BY THE DISCUSSANT (H.E. Mr Yi-Fu Lin (Separate Customs 
Territory of Taiwan, Penghu, Kinmen and Matsu)) 
36. I have divided my communication today into three parts:  the economic and institutional 
environment;  the trade policy regime;  and sectoral policies. 
37. Firstly, looking at the economic and institutional environment , despite the impact of the 
global financial crisis in the second half of 2008,  El Salvador still remains on a steady path of 
economic development, with average annual growth in  real GDP of 3.1 per cent, and inflation kept 
below 5 per cent during the period under review. 
38. As for the fiscal and financial aspects, even though the deficit on its ba lance of payments has 
deteriorated somewhat due to the financial crisis , the Salvadoran Government has still managed to 
stabilize its finances, and to establish policies to c ontrol government expenditure and improve the tax 
collection system.  At the same time, El Salva dor has obtained support from certain international 
financial organizations.  My main comments here are that a more competitive and efficient market 
based on transparency and accessib ility, plus a better regulatory framework, should improve the trade 
and investment environment.  In addition, appropriate adjustments to the fiscal structure should help 
to reduce the current deficit. 
39. In terms of El Salvador's trade policy regime , it is important to recognize that trade and 
investment play a really crucial role in its economy, representing some 70 per cent of the total GDP.  Indeed, El Salvador is now seeking to expand its  trading opportunities even further by pursuing a 
policy of deeper integration in the Central Am erican region, thus benefiting from the regional 
Free Trade Agreement.  At the same time, it is enga ging in the multilateral negotiations in the WTO.  
I believe that this approach will help to dive rsify its export market, which is currently very 
concentrated on those partners with whom it has preferential agreements, who account for 90 per cent 
of its total exports and tw o thirds of its imports. 
40. At this point, I should like to mention that El Salvador is a very active and constructive 
Member of the WTO, contributing on many fronts and committed to the development of the 
multilateral trading system.  In addition, Ambassador  Lima, in his current capacity as coordinator of 
the Group of Small and Vulnerable Economies (SVEs), gives these Members a strong collective voice, helping them to gain well-de served benefits by way of special treatment in the course of the 
negotiations. 
41. During the period of this Review, one of El Salv ador's main priorities has been to keep up the 
momentum on liberalization.  Many efforts have b een made, in various ways:  streamlining its custom 
clearance procedures;  harmonizing its tariffs w ith Central American Common Market countries;  
reducing its applied tariff rate;  and,  promoting its investment regime. 
42. Regarding certain aspects of its legislative a nd institutional framework, according to a recent 
study, El Salvador's competition policy has been  implemented successfully, and its experience can 
serve as a model for others.  Furthermore, even t hough El Salvador has not yet decided to join the 
Agreement on Government Procurement, the great progress it has made on modernizing and 
strengthening the regulatory frameworks in this re gard is well known.  I would therefore like to 
encourage the Salvadoran Government to take into  consideration the benefits to be gained from 
participation in the GPA. 
43. In addition, as can be seen from several of th e questions raised by Members, some more 
detailed information from El Salvador on its various programmes and procedures would be 
appreciated.  In other words, there are some calls  from Members for more explanation and greater 
transparency in its economic regime.  For example, with a view to promoting exports, El Salvador has  WT/TPR/M/226 
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  brought into force the Export Recovery Law and the Law on industrial and marketing free zones.  
Programmes applied under these laws  provide exporters with tariff and tax concessions, but, at the 
same time, they result in subsidies and tax breaks th at might cause distortion as well.  I would invite 
El Salvador to provide further de tails of these reform programmes. 
44. As far as sectoral policies  are concerned, the value of trade in El Salvador's agricultural sector 
has performed well, and increased over the period of  the review.  The Government has provided some 
support arrangements in this regard as well.  Like  me, however, Members are probably interested in 
having more information about the arrangements in the tariff quota regime. 
45. Services account for more than 60 per cent of El Salvador's GDP, and the financial services 
sector is relatively more open than others.  For th e time being, the Salvadoran Government's efforts 
have been directed mostly at strengthening the policy framework in force since the Uruguay Round, 
and maintaining some market access requirements in certain sectors.  I believe Members would welcome more autonomous liberalization in this area. 
46. Before concluding, I would just like to sum up my main conclusions and expectations for 
El Salvador's trade and economic policies.  Wit hout doubt, some challenges lie ahead, nevertheless, 
the continuation of structural reform and further liberalization, as well as greater transparency and 
competition in its trade regime, should help to im prove its domestic productivity and competitiveness. 
47. From this Review, and El Salv ador's responses to the questions, Members will hopefully now 
get a much more comprehensive understanding and great er clarification of the effects of its trade 
regime and policies. 
48. Finally, I hope my observations and suggestions  today might provide some useful food for 
thought in the discussions at this Review. WT/TPR/M/226 
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  IV. STATEMENTS BY MEMBERS 
GUATEMALA 
49. Guatemala has close cultural and historical links with El Salvador and we are friendly 
countries which share many interests and expectations .  In fact, from time immemorial, Guatemalans 
have visited El Salvador in order to live with its  people, enjoy its beaches and be tempted by its 
delicious food such as seafood and pupusas.  Guatem alans have always been welcomed and received 
with smiles and hospitality by Salvadorans and, Mr  Chairman, these are undoubtedly some of its best 
known qualities. 
50. Guatemala and El Salvador also have close trad e relations.  El Salvador is Guatemala's major 
trading partner in Central America and there are no borders between our countries so the flow of 
persons and traffic is free. 
51. Today, El Salvador's trade relations are b ased on the Protocol on the Establishment of a 
Customs Union, signed just over one year ago between  the Presidents of the two nations.  Guatemala 
is certain that the entry into effect of the Custom s Union will help to streamline the vast commercial 
traffic between our two countries, which overa ll accounts for 65 per cent of Central American 
intraregional trade. 
52. El Salvador's commercial presence is not only a ppreciated in Guatemala.  Salvadoran private 
investment has penetrated the whole region, particul arly in the area of services.  For example, 70 per 
cent of the largest regional airline, TACA , belongs to Salvadoran entrepreneurs. 
53. In many cases, these commercial initiatives are th e result of measures taken by El Salvador to 
boost its economic and trade relations. 
54. Since the previous Trade Policy Review, El Sa lvador has steadily intensified the economic 
reforms implemented in the country, and by so doing has built a stable and predictable legal 
framework that attracts investment and stimulates  the economy.  The Government has also adopted 
programmes in support of competition, thereby boosti ng its trade expansion.  The progress made in 
modernizing the State has been equally impressive. 
55. All these measures are important in themselves, but  they are even more so when one realizes 
that the country only emerged from an armed conflict barely two decades ago. 
56. At the same time, Guatemala notes that strengthening the multilateral trading system 
continues to be a priority in El Salvador's economic policies.  El Salvador plays an active role in the 
Doha negotiations and is committed to translatin g the Doha Agenda into tangible and credible 
benefits for developing countries.  In fact, El Sa lvador has been wisely utilizing the opportunities and 
flexibility to give small economies the possibility  of maximizing their potential and developing 
institutions to underpin implementation of the WTO's rules. 
57. Lastly, I should like to state that, as El Salv ador's neighbour, Guatemala is a witness to the 
efforts made by this country to open up its borders  and to revitalize the administration of its trade 
regulations and procedures.  This is why we take this opportunity to pinpoint some practical problems 
that Guatemala has faced in its bilateral trade with El  Salvador, in the conviction that this will help to 
ensure that they are dealt with and resolved promptly.  WT/TPR/M/226 
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  58. Our main concern is the implementation of the Central American Regulations on Sanitary and 
Phytosanitary Measures and Procedures.  In this connection, we have three particular requests: 
59. Firstly, we would ask the Salvadoran authorities to give us more information on the practical 
implementation of these Regulations and the way in which this procedure is in harmony with the 
obligations under the WTO's SPS Agreement. 
60. Secondly, we have noted that during the c ontrol, inspection, approval and certification 
procedures the time-limits laid down for providing th e official report on the observations indicated in 
an "inspection of origin visit" are frequently not respected.  Guatemala takes this opportunity to urge 
the Salvadoran authorities to comp ly with these time-limits and so gua rantee the transparency of these 
procedures. 
61. Thirdly, Guatemala is concerned at the treat ment given to Guatemalan pork products and 
by-products.  As El Salvador knows, in Octobe r 2009, Guatemala was decl ared a country free of 
classical swine fever, in accordance with the pr ocedures and principles laid down by the World 
Organisation for Animal Health (OIE).  Some months  prior to this, in April 2009, the Government of 
El Salvador declared itself free of classical swine fever, so the two countries have the same sanitary 
status.  Consequently, in accordance with Articles 2. 3, 4 and 6.2 of the Agreement on the Application 
of Sanitary and Phytosanitary Measures, Guatemal a requests the Government of El Salvador to 
comply with and respect this Agreement for imports of pig meat and by-products from Guatemala.  My delegation thanks the Government of El Salvador  in advance for its consid eration and the relevant 
action to be taken in this respect. 
MEXICO 
Successes and challenges of the Salvadoran economy 62. First of all, I should like to refer to the progr ess in trade liberalization made by the Salvadoran 
Government, including the modernization of the Cust oms, the elimination of licensing requirements 
and the stronger institutional and re gulatory framework on competition, inter alia . 
63. The measures taken to modernize the Customs by  using computer systems and, particularly, 
the creation of a "one-stop shop" for importers has enabled the time taken for customs clearance to 
fall below the average in the OECD.  This is undoubtedly an example to be followed by many 
developing countries and, particularly, by other La tin American countries, including Mexico, which is 
now undertaking a similar trade facilitation programme. 
64. As regards licensing, El Salvador has lessened the number of products subject to import visas, 
which apply to some 1,000 tariff lines.  We agree w ith the Secretariat that definitive elimination of 
this procedure would facilitate trade transactions a nd would give economic agents greater confidence. 
65. Turning to competition, since the entry into for ce of the relevant law in 2006, the Salvadoran 
Government has adopted special legislation to  strengthen its institutional framework for free 
competition.  The OECD has acknowledged the satisfact ory implementation of this policy, stating that 
it is a model for an effective way of starting to impl ement a competition policy.  It also drew attention 
to the satisfactory performance of the Supervisory Authority for Competition. 
66. Regarding the economic policy challenges facing the Salvadoran Government in the future, 
El Salvador has suffered from the effects of the cu rrent economic crisis.  Its GDP fell by -3.3 per cent 
in 2009 and the IMF is forecasting growth of only 0.5 per cent in 2010.  The global crisis has caused 
traditional export markets to shrink, and there has been a substantial reduc tion in the remittances 
received by El Salvador from its citizens living abro ad.  In 2008, these accounted for 17 per cent of its WT/TPR/M/226 
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  GDP.  Like other developing countries, El Salvador is facing the challenge of diversifying its export 
markets and lessening its dependence on external tr ansfers, particularly remittances, which have 
strongly boosted internal demand in recent years.  El  Salvador is also facing important challenges in 
alleviating poverty, which affects some 35 per cent  of its population, a challenge that has become 
more acute as a result of the global recession. 
67. We are confident that the Government of El  Salvador will continue to take the proper 
measures to lessen its economy's vulnerability in an  adverse global economic climate, although there 
are some signs of improvement, and that it will stre ngthen its social policies in order to lessen the 
number of people living in poverty. 
Trade and sectoral policy 
68. With regard to its trade policy, El Salvador applies an average MFN tariff of 6.3 per cent and 
its average bound tariff is 37 per cent, so there is  a large margin for reducing the gap between the 
bound and applied tariffs in the current negotiating r ound, thereby giving its trade partners greater 
certainty. 
69. The agricultural sector has been particularly d ynamic.  It recorded average annual growth of 
5.3 per cent between 2002 and 2008, which raised its share of the GDP to approximately 13.1 per 
cent.  The main reason for this sector's dynamism is the increase in international prices for certain 
agricultural products such as coffee and sugar.  Despite  this dynamism, the sector is highly protected 
with an average MFN tariff of 12.9 per cent, although tariff dispersion is 0 to 164 per cent and the 
average bound tariff is 43 per cent.  In our view, it is  essential for El Salvador to make efforts to 
lessen the tariff dispersion and bridge th e gap between bound an d applied tariffs. 
70. The services sector is making substantial contribu tions to El Salvador's economy.  In 2008, it 
accounted for 61.5 per cent of the GDP and occupied 66 per cent of the labour force.  As part of the 
Uruguay Round negotiations, El Salvador undertook specific commitments in six of the 12 services sectors.  In this connection, we would like to encour age the Salvadoran Governme nt to ensure that its 
final services offer in the current round of nego tiations reflects the progress made in its autonomous 
liberalization and bridges the wide gap between th e commitments in effect and the legal framework 
applicable. 
Free trade agreements and bilateral trade relations 
71. I should also like to refer to bilateral trade re lations between Mexico and El Salvador.  The 
Northern Triangle, which comprises El Salva dor, Guatemala and Honduras, and Mexico has a 
Free Trade Agreement that came into force on 15 March 2001.  Trade relations between Mexico and 
El Salvador have shown a marked increase under th is Agreement.  The value of trade between our 
two countries has risen by some 130 per cent since th e Agreement came into effect.  In 2008, Mexico 
was El Salvador's second most important supplier after the United States of America.  Since 2004, 
Mexico has also been the third largest foreign invest or in El Salvador.  My country's investments have 
mainly been in the communications sector, in manufacturing and energy.  This underlines the 
importance of the Salvadoran market for Mexico's private sector. 
Main issues raised in our questions 
72. In view of my country's interest in the evoluti on of El Salvador's trade policies, my delegation 
sent a number of questions on services and intell ectual property.  We thank the Salvadoran 
Government in advance for the efforts made to reply to the questions put by my delegation.  WT/TPR/M/226 
 Page 13 
 
 
  BRAZIL 
73. Brazil would like to congratulate El Salvador on the significant achievements in the area of 
macroeconomic management and trad e policy.  Among the remarkable results attained over the period 
of this TPR, it is worth mentioning the sustained gr owth of GDP - average rate of 3.1 per cent from 
2003 to 2008 - stabilized low infla tion and the significant increase in the inflow of foreign direct 
investment in 2008.  This positive trend was affect ed by the world economic and financial crisis in 
2009 and also by the serious human and material losses caused by Hurricane Id a, last November.  
We hope that the consolidated achievements of th e Salvadoran economy provide a solid ground for it 
to fully benefit from the (hopefully) sustained recovery of the world economy from 2010 onwards. 
74. Since its previous Trade Policy Review, El Sa lvador's total trade with Brazil practically 
doubled, from US$137 million in 2004 to US$249 million in 2008.  Our bilateral trade is reasonably 
diversified in terms of goods.  Brazil's main exports  to El Salvador comprise EMBRAER's airplanes, 
ethanol, transport vehicles (buses), aluminium,  pulp and paper and furniture, among others.  
El Salvador's main exports to Brazil include alumin ium, fish and fish products, textiles and clothing 
and machinery.  On the FDI side, there has been  an important amount of investment from Brazilian 
companies in the sectors of textiles and clothing and footwear. 
75. There is plenty of room for expanding bilateral trade.  Among other issues, our leaders have 
been discussing initiatives to enhance our comme rcial and economic ties, among them a possible 
free trade agreement between MERCOSUR and SICA (the Centro-American Integration System).  President Lula visited El Salvador  twice in 2008;  President Funes vi sited Brazil in September 2009.  
During their last meeting in Brasília, our President s agreed on a programme of technical cooperation 
for the production of ethanol in El Salvador, with a view to helping local producers to boost exports of 
biofuels to the United States of America benefiting from the CAFTA-US free trade agreement.  Since then, there has been an increase in FDI from Brazilian compani es taking part in joint ventures in 
El Salvador, as well as in exports of Brazilian alc ohol for the production and exportation of ethanol in 
El Salvador to the United States market. 
76. We are pleased to notice in the Government Re port that El Salvador, like Brazil, attaches high 
priority to the strengthening of the multilateral syst em of trade.  In the DDA negotiations, Brazil has 
always worked closely with the Group of SVEs, of which El Salvador is a member, supporting its position on issues of substantive interest.  We shar e the view that the Doha Round should preserve 
policy space in developing countries while, at the same time, open further traditional markets in 
developed countries.  We are glad to see that, like Brazil, El Salvador supports a successful 
conclusion of the Doha Round with a development-oriented outcome. 
COLOMBIA 
77. It is a pleasure for us to make this statement ju st a few days after the entry into force of the 
trade agreement between El Salvador and Colomb ia on 1 February last.  This is a Free Trade 
Agreement that sets out and expands the prefer ences and disciplines in the 1984 Partial Scope 
Agreement under the LAIA.  There can be little doubt that  this instrument will help to intensify trade 
links between our two countries a nd strengthen regional economic inte gration, an essential tool for the 
socio-economic development of  Latin American countries. 
78. In recent years, El Salvador has built up an  important strategy for internationalizing its 
economy, involving additional bilateral trade agreem ents, active participation in the negotiations at 
the WTO, and attracting more foreign investment.  In order to further this process successfully it has 
undertaken far-reaching reforms in the business climat e, in trade facilitation and in strengthening the 
institutional framework, especially its comp etition policies and government procurement. WT/TPR/M/226 
Page 14 
 
 
  79. The results were not long in coming and Colombia  welcomes them.  Since the previous Trade 
Policy Review in 2003, El Salvador has virt ually doubled its exports, from US$1,474 million to 
US$2,621 million, foreign investment in the count ry has increased, trade agreements have been 
signed with seven countries and three more are be ing negotiated with the European Union, Canada 
and CARICOM.  The macroeconomic indicators also reflect notable progress:  average growth of 3.1 per cent in the GDP over the period reviewed, inflation below 5 per cent and an unemployment rate of 6.2 per cent.  Although these results have felt the effects of the global financial crisis over the 
past year, in the medium term they show the significant progress made by El Salvador. 
80. Trade policy plays a leading role in El Salva dor's economic performance:  trade in goods and 
services accounts for 73.6 per cent of the GDP.  In th is connection, it is important to mention that, 
although the average MFN tariff applied has fallen slightly since the previous Review, down to 
6.3 per cent, the tariff applied to agricultural produc ts has increased slightly to 12.9 per cent because 
of the increase in tariffs on certain poultry produc ts.  This is because of the renegotiation of the 
bindings applicable to some of these products. 
81. In addition, El Salvador restricts exports of cer tain products such as sugar, for which it has a 
system of production quotas and imports require pr ior authorization.  Tariff quotas also apply to 
imports of cheddar-type cheese, maize, sorghum, ri ce and pig meat.  These measures affect trade in 
the same way as the right to refund of 6 per cent of  the value of exports, which continues to benefit 
exporters. 
82. As regards trade relations between Colombia a nd El Salvador, these have been particularly 
dynamic in recent years.  For example, since the previous Trade Policy Review, bilateral trade has 
increased 2.5 times, from US$38.7 million to US$93.8 million.  Our country has a surplus balance, which is the result of the increase in Colombian exports;  in 2008, these amounted to US$91 million. 
83. Reciprocal flows of foreign investment have not been equally dynamic.  Colombia's FDI in 
El Salvador fell sharply between 2003 and 2007,  from US$26 million to US$150,000 and in 2008 no 
investment was recorded.  In conn ection with the investment regime, I would like to draw attention to 
the limits on foreign investment applicable to i ndustry and the supply of "small-scale" services, which 
are the exclusive prerogative of Salvadoran citizens. 
CANADA 
84. Canada and El Salvador have  strong links that are becoming increasingly important in the 
areas of trade and investment.  After having suffere d a setback in 2007, trade in goods between our 
two countries recovered in 2008.  More precisely, bilateral trade in goods increased by over 43 per 
cent in comparison with 2007.  Foreign direct investment  in El Salvador continues to increase, a result 
of the efforts made to enhance the business climat e by giving investors economic stability and legal 
security.  Canada would like to strengthen its links with El Salvador in th is regard still further. 
85. Canada notes with satisfaction that since the previous Trade Policy Review in 2003, 
El Salvador has complied with its commitment to liberalize trade further and to open up the 
investment sector.  Even though the global econo mic crisis has affected El Salvador's strong 
economic performance during this period, we are happy  to note that it still pursues a progressive trade 
and investment liberalization programme.  We consid er that El Salvador will thus be better placed to 
recover rapidly from the global recession and once again to record economic growth that will create 
jobs and raise its citizens' living standards. 
86. The Report produced by the Secretariat highli ghts a number of positive developments related 
to El Salvador's efforts to modernize its economy.   An increased openness to foreign investment, the 
diversification of its export markets, and the incr eased efficiency in its domestic production capacity  WT/TPR/M/226 
 Page 15 
 
 
  are but a few examples.  That said, there ar e always opportunities for further improvement.  
As pointed out in the Secretariat Report, the stabilit y of the tariff regime could be enhanced through 
the reduction of bound tariff rates. 
87. In the area of measures affecting imports, Canada recognizes the strong efforts of El Salvador 
to modernize its customs procedures, which have allowed its customs clearance time to drop below 
the OECD average.  However, some of its prohi bitions and licensing requirements on certain imports 
are still a concern for many of El Salva dor's trading partners, including Canada. 
88. Canada also endorses El Salvador's progress in the area of government procurement, 
particularly the advancements made in moderniz ing and strengthening its re gulatory and institutional 
framework.  Canada would like to encourage El Sa lvador to make additional progress by becoming an 
observer to the WTO Government Procurement Agreement with the aim of acceding to the 
Agreement, which would allow El Salvador to benefit from the gains of enhanced competition. 
89. In conclusion, Canada would like to express its support for El Salvador's market liberalization 
strategies, strengthened institutional environment, and economic diversifica tion and growth achieved 
since the previous Review in 2003. 
HONG KONG, CHINA Bilateral trade relations 
90. El Salvador is one of Hong Kong, China's valu ed trading partners in Central America.  
We are encouraged by our harmonious trade relatio ns.  Our bilateral trade amounted to a relatively 
modest US$62 million in 2008, but this represents  plenty of opportunity for further growth. 
Tariffs 
91. Turning to some specific aspect s covered in the Reports, firstly on tariffs, we note that 
El Salvador has reduced its average applied MFN tariff rate from 7.4 per cent in 2002 to 6.3 per cent 
in early 2009, and maintains a simple tari ff structure in which all applied rates are  ad valorem .  
However, there is, in general, a ga p between El Salvador's applied ra tes (average 6.3 per cent as I just 
mentioned) and bound rates (avera ge 37 per cent).  We would like to commend El Salvador for its 
efforts in bringing down its tariff rates, and we w ould encourage it to reduce the gap further between 
the applied and bound rates in order to e nhance the certainty of its trade regime. 
Agriculture 
92. According to the Secretariat Report, the agricultu ral sector of El Salvador is associated with 
above-average tariffs as well as various marketing and guarantee pr ogrammes.  We would encourage 
El Salvador to liberalize its agricultural sector furt her.  In addition, we note that the average bound 
tariff rate for agricultural products is currently 43 per cent, significantly higher than the applied MFN 
tariff of 12.9 per cent.  We look forward to its early reduction. 
Services 
93. As noted from the Secretariat Report, trad e in services accounts for a major share of 
El Salvador's economy, in terms of both GDP and employment.  However, the specific commitments 
undertaken and the offers put forward by El Salvad or in the current round of services negotiations are 
somewhat limited, in terms of the number of sector s covered and the extent of such commitments.  
While fully acknowledging that El Salvador is a small and vulnerable economy, we encourage it to 
undertake further commitments progressively, particularly for uncommitted but important sectors WT/TPR/M/226 
Page 16 
 
 
  such as maritime transport, logistics and distribution services.  We believe that such undertakings will 
help El Salvador to achieve its goal of developing into a regional logistics and distribution hub.  
Besides this, we invite El Salvador to continue its  liberalization efforts in other key sectors, such as 
financial services. 
MFN exemptions 
94. We note that El Salvador's schedule of speci fic commitments includes MFN exemptions for 
all sectors in favour of the member countries of the Central American Common Market.  In the case of financial services, El Salvador maintains MF N exemptions on the basis of the Convention on 
Facilitating the Financial Integration of the Countri es of the Central American Isthmus.  Both are 
intended to be of an indefinite duration. 
95. We take the view that such MFN exemptions  are not conducive to further negotiations under 
Article XIX of the GATS to liberalize trade in services progressively.  Moreover, MFN exemptions of indefinite duration are not consistent with the GATS Annex on Article II Exemptions, which requires 
all MFN exemptions to be reviewed from time to time and to be, in principle, not more than ten years.  
We invite El Salvador to consider rem oving those exemptions in its next offer. 
Trade facilitation 
96. We are pleased to note that, during the review period, El Salvador has continued to adopt a 
number of trade facilitating measures in its cust oms regime.  These measures have substantially 
shortened the time required for customs and licen sing formalities.  We applaud these measures and 
encourage El Salvador to continue these st eps very much in the right direction. 
Technical regulations and standards;  and sanitary and phytosanitary measures 
97. We are glad to learn that El Salvador's technical regulations and conformity assessment 
procedures are generally based on international st andards and the recommendations of international 
standard-setting bodies.  To facilitate the flow of in ternational trade, we would encourage El Salvador 
to engage further in activities for development of  mutual recognition agreements and to notify the 
WTO of such progress in a timely manner. 
ARGENTINA 
98. Over the period 2003-2008, El Salvador's real GDP rose at an annual average rate of 3.1 per 
cent, slightly above that recorded at the time of the previous Review in 2003.  Growth rates rose in 
2006 and 2007, notably as a result of a strong increase in domestic demand.  Following the 
international crisis, there was a marked contrac tion in economic growth from the second half of 2008 
onwards.  This crisis caused investment, exports an d remittances from Salvadoran workers abroad to 
decrease and a fall of around 5 per cent in gross private capital formation in 2008. 
99. Fiscal policy plays a crucial role in El Salva dor's economy and as it is dollarized the country 
cannot pursue an independent monetary policy.  The fiscal deficit gradually fell between 2003 and 
2007, although there was an increase in the first mont hs of 2009, with the Cent ral Government deficit 
attaining 1 per cent of GDP in June 2009 because of the fall in revenue and increased spending.  
The non-financial public sector deficit w as 1.3 per cent of GDP in June 2009. 
100. Since 2005, the current account deficit has risen  and accounted for 7.6 per cent of the GDP in 
2008, mainly as a result of a deterioration in the ba lance of trade in goods.  This deficit has been 
offset by the high level of current transfers, fo r the most part remittances from Salvadorans living  WT/TPR/M/226 
 Page 17 
 
 
  overseas, corresponding to 17.1 per cent of the GDP in 2008, and financed by the inflow of capital, 
particularly in the form of foreign direct investment, issue of government bonds and loans. 
101. Trade and investment play an important role in El Salvador's economy.  It is satisfactory to 
note that El Salvador continued to liberalize its trade policy during the period under review.  Trade in 
goods and services as a proportion of GDP attained 73. 6 per cent in 2008.  El Salvador's trade in 
goods showed a marked increase during the period under review.  Exports rose from 
US$3,418 million in 2005 to US$4,549 million in 2008.  Over the same period, imports increased 
from US$6,690 million in 2005 to US$9,754 million in 2008, an average annual rate of growth of 
13.4 per cent.  The trade in services balance is trad itionally in deficit and th is has increased since 
2004, reaching 2.6 per cent of the GDP in 2008. 
102. We should like to underline El Salvador's active ro le at the WTO.  It plays an active part in 
the Doha Round, during which it h as submitted several proposals, notab ly in collaboration with other 
Members.  For example, the joint proposal on the establishment of a multilateral system for the 
notification and registration of geographical indicati ons for wines and spirits, of which our country is 
a co-sponsor.  We should also like to highlight El Salvador's excellent work as the current coordinator 
of GRULAC at the WTO. 
103. Our countries have excellent bilateral relati ons.  In 2009, bilateral trade amounted to 
US$13.4 million.  Argentina's exports to El Salva dor amounted to US$13.18 million and imports were 
US$256,413. 
CHILE 
104. As reflected in the Secretariat Report, El Salva dor's tariff structure is in general low, even 
though certain sectors are protected, notably agricu lture.  Import permits and visas, which are in 
general transparent and in many cases automatic, ne vertheless make foreign trade more difficult and 
may become unnecessary barriers.  There is little Stat e intervention in the eco nomy and the business 
and investment climate is transparent and non-di scriminatory, even though there is room for 
improvement.  For example, import and export proce dures could be reduced and streamlined.  It is 
also a matter of concern that there are still expor t subsidies which, as the Secretariat has indicated, 
have not yielded the expected benefits, especially wh en compared with enterprises that are not in the 
free zone.  This is why in our questions we ask  for details concerning the dismantling of these 
programmes, in line with the commitments undertaken by El Salvador. 
105. Since the previous Review, there have also been positive changes in intellectual property, 
increased participation by civil society in trade policy matters and the entry into force of the 
Competition Law and the relevant Supervisory Authority.  As pointed out in an OECD report, 
El Salvador's experience can serve as a model for an effective way of starting to implement a 
competition policy. 
106. One matter that has attracted our attention is that only 57 per cent of products from 
Chinese Taipei are given zero tariff treatment, comp ared to 80 per cent for the other agreements 
signed by El Salvador.  Taking advantage of the presence of Mr Lin, we should like to know the 
reasons for this low level of covera ge in the FTA between these Members. 
107. At the WTO, El Salvador is an active Member , particularly among the small and vulnerable 
economies, and we have little doubt of its commitm ent to an ambitious Doha Round, but with 
appropriate flexibilities for developing countries.  We  share its views on geographical indications and, 
although we have some differences concerning fisheries subsidies, we are united in our interest in the 
conservation of marine resources. WT/TPR/M/226 
Page 18 
 
 
  108. Since 2002, there has been a Bilateral Protocol between our two countries as part of the 
Free Trade Agreement between Chile and Central Amer ica.  Since then, trade has increased steadily, 
from just over US$20 million to almost US$120 million.  One interesting aspect is  the joint efforts of 
both countries to extend the benefits of the Agreemen t to the Salvadoran private sector, for example, 
training and consultancy to facilitate access by Salv adoran entrepreneurs to the Chilean market for 
their products. 
JAPAN 
109. First of all, I would like to start with th e economic environment in El Salvador.  The 
Secretariat Report describes a steady real GDP grow th in El Salvador of 3.1 per cent on average 
during 2003 and 2008, supported mainly by st rong domestic demand thanks to remittances from 
abroad, which accounted for 17.1 per cent of GDP in 2008. 
110. However, the global economic and financial cr isis has resulted in a sharp decline in 
remittances and export of goods.  It also has affe cted tax revenues, and caused increasing public 
deficits. 
111. In response to the crisis, El Salvador launc hed a new fiscal plan worth US$587 million.  
It also reached a preliminary agreement with th e IMF for a new economic programme that could be 
supported by a Precautionary Stand-by Arrangement of about US$800 million.  Japan hopes that these 
policies will help to put the Salvadoran economy back on track. 
112. Secondly, with regard to trade and investme nt policy, among the recent policies undertaken 
by El Salvador, Japan appreciates the phase-out of export subsidies to specific exporters and the new 
comprehensive export promotion strategy announced this January.  Given the figure of the trade in 
goods and services represented in GDP, 73.6 per cent in  2008, we can expect that the liberalization 
and promotion of trade will have a great impact  on the further development of El Salvador. 
113. Japan also notes the establishment of a Nationa l Investment Office and the introduction of 
Competition Law and related regulations, which w ill support the foreign investor by increasing 
transparency and providing fair circumstances for investment.  We hope that the government of 
El Salvador will continue to further liberalize trade and promote investment. 
114. Thirdly, we commend El Salvador for its active participation in various technical assistance 
projects, including those of the WTO. 
115. In conclusion, Japan would like to reiterate its hope that El Salvador will continue its efforts 
to liberalize trade and promote investment, in or der to benefit from the multilateral trading system. 
DOMINICAN REPUBLIC 
116. El Salvador is an important trading partne r for the Dominican Republic, as a party to the 
Free Trade Agreement between our country and the five Central American republics in force for a 
decade, and subsequently in the CAFTA-DR Agreem ent, to which we have belonged with these 
countries and the United States of America for four years.  In this connection, we note with 
satisfaction that El Salvador's trade regime has con tinued to be liberalized since the previous Review 
of its trade policy in 2003.  Progress has been made in modernizing the Customs, eliminating 
unnecessary licensing requirements, enhancing the transparency of technical regulations and sanitary and phytosanitary measures, and reinforcing the institutional framework for competition policy and 
government procurement.  We urge El Salvador to  pursue its reforms in the various sectors of the 
economy.  WT/TPR/M/226 
 Page 19 
 
 
  117. Like any small and vulnerable economy, El Sa lvador has suffered greatly from the negative 
impact of the global financial crisis  and from recent natural phenomena that have affected the country.  
In this connection, preliminary calculations show that in 2009 its GDP contracted by 3.3 per cent 
because of a decrease in investment, exports and family remittances.  This reduction in the GDP 
occurred after it had grown at an average annual rate  of 3.1 per cent over the period 2003-2008, a rate 
lower than the Latin American average. 
118. Together with Panama and Ecua dor, El Salvador is one of the three dollarized economies in 
Latin America.  While Ecuador introduced dollari zation as a mechanism for automatic stabilization in 
the midst of a profound monetary and exchange crisis and loss of conf idence, El Salvador did so as a 
long-term stabilization mechanism with the aim of pr eserving for the future the structural reforms it 
had implemented and boosting the confidence of fo reign investors.  Unlike Ecuador, El Salvador 
dollarized at a time when its currency was appr eciating, making its exports less competitive and 
discouraging domestic production while lowering th e cost of imports, even though the real 
appreciation which other currencies in the isthmus al so experienced has allowed it to move ahead with 
its other policies to enhance competitiveness without any further setbacks. 
119. In order to sustain growth that creates perman ent jobs over time and allow it to win the battle 
against poverty, El Salvador should expedite reforms to increase its levels of saving and investment as 
total consumption over the recent period has exceed ed the GDP and its imports have amounted to 
almost 50 per cent of the GDP, with an annual aver age deficit in the balance-of-payments current 
account corresponding to 5 per cent of the GDP.  This deficit has been financed by similar amounts of 
direct investment and external debt.  It has manage d to lower the public debt by over three percentage 
points of the GDP between 2003 and 2008, but accordi ng to preliminary figures it would appear that 
in 2009 it will again reach the 2003 levels. 
120. Although one of the advantages of dollariza tion is harmonization of domestic and 
international interest rates, eliminating the aggregat e cost of exchange risks, in El Salvador, real 
borrowing interest rates have been negative and, together with the high financial intermediation 
margins, have discouraged both private saving and in vestment in production, indicators that also show 
the lack of competitiveness in th e financial sector.  El Salvador  needs to create financial saving 
instruments that attract the high levels of family remittances, equivalent to 17 per cent of the GDP, in 
order to promote housing and export promotion programmes, as well as small and medium-sized 
enterprises.  We hope that the competitive enviro nment in the financial sector improves because a 
large amount of the external private investment that  has flowed into the country in recent years has 
been directed towards this sector. 
121. Since 2007, El Salvador has had to face extrem ely negative external circumstances that have 
represented formidable challenges to an open economy that lacks a monetary policy.  The 
disproportionate increase in international commodity prices meant that inflation in El Salvador was 
10 per cent annually by mid-2008 because there were no internal monetary mechanisms to offset the 
impact.  The increase of the agricultural sector's shar e of the GDP in recent years is an encouraging 
indicator for dealing with the problem of food security. 
122. Following the financial crisis, the fall in intern ational trade in 2009 appears to have had a 
worse impact on El Salvador's domestic production than on that of other economies in the region 
according to the monthly economic index published by the Central American Monetary Council.  
Because of the form of its structure, El Salvador should implement policies to lessen its vulnerability 
to fluctuations in foreign trade and modify its engines for growth based on dynamism of private 
investment in production, ensuring that the im plementation of such policies does not introduce 
measures that affect the competitiveness of the pr oduction of goods and services in other economies 
or are inconsistent with WTO regulations, as app ears to be the case for the Export Recovery Law.  
Policies combined with higher fiscal revenue, whic h penalize the consumption of superfluous goods, WT/TPR/M/226 
Page 20 
 
 
  in order to increase social spending and investment in physical and institutional infrastructure to raise 
the levels of competition.  One essential mechanism in pu tting these changes into effect would be to 
implement the Customs Union with other Central Am erican countries and to conclude the EPA with 
the European Union as soon as possible.  We note that the Secretariat Report mentions that 
El Salvador has already started to receive fresh resources under an agreement with the International 
Monetary Fund, which we hope will be used to give the authorities breathing space and help in 
dealing with the problems raised by the current intern ational financial crisis because of the decline in 
its external and fiscal revenue. 
123. Our delegation has sent questions to the delegation of El Salvador, particularly with regard to 
the Export Recovery Law, an issue that is of grea t concern to us and on which we have already held 
bilateral consultations.  In this respect, we have reviewed the replies given to the questions on the 
aforementioned Law and we would welcome receiving the information and details we have requested, 
because we note that only very brief information in ge neral terms has been given.  We hope to receive 
detailed replies to the questions subm itted and we urge the Government of El Salvador to consider the 
need to bring its legislation into complia nce with the WTO Agreement on Subsidies. 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
124. We have noted that El Salvador has made great  efforts to make adjustments to almost every 
aspect of its infrastructure and economy in order to fulfil the Millennium Development Goals.  
Despite the difficulties and challenges still being enco untered during this transition, my delegation is 
pleased to see the emergence of a more open trade regi me, and, in particular, El Salvador's continuing 
commitment to playing an active role in the WTO activities. 
125. Like other Members, we sent some written ques tions to El Salvador in advance, relating to 
areas of particular interest to us.  We were mainly seeking further clarification of its policies in an improving economic environment, its measures af fecting imports, productio n and trade, and its 
policies in the energy sector.  We thank El Salva dor for its very well written responses received this 
morning. 
EUROPEAN UNION 
Bilateral relations and regional integration 126. The Secretariat Report shows how El Salvador has continued to liberalize its trade regime 
since the previous Review of its trade policy.  It provides an example of how small economies can 
benefit from trade liberalization and the multilateral tr ading system.  It has become integrated in the 
international economy to a notable extent throu gh its participation in the WTO, as well as the 
implementation and expansion of regional integration through trade and investment agreements.  
The WTO considers that trade in goods and services accounts for 74 per cent of El Salvador's GDP. 
127. With regard to regional integration, we urge El Salvador to continue moving ahead with 
consolidating the Central American Common Market.  In this regard, we should like to know what 
measures El Salvador is taking to complete the full harmonization of the external common tariff and 
the most recent measures taken to strengthen the Central American Customs Union. 
128. The EU is a firm believer in the immense bene fits which regional integration can bring.  
This is why the EU has supported, still supports and will continue to s upport the strengthening of 
regional integration in Central America.  In this  regard, the EU and Central American countries are 
negotiating an Association Agreement in order to  reinforce our political and trade links.  These 
negotiations will continue at the end of February in  Brussels with the aim of concluding an ambitious 
agreement before the EU-LAC Summit planned for Ma y in Madrid.  Although we have already made  WT/TPR/M/226 
 Page 21 
 
 
  substantial progress, work still remains to be done on market access, sustainable development, rules of 
origin and geographical indications, inter alia .  With an intensive programme of work and a clear 
political will, we are certain that we can reach the Madrid deadline. 
129. At the same time, El Salvador is taking full advantage of the GSP+ preferences regime, and 
there can be no doubt that this has helped to stre ngthen El Salvador's economic  development.  The EU 
also has an important cooperation programme under which €120 million are earmarked for the period 
2007-2013 with two main objectives:  to promote soci al cohesion and public security and to reinforce 
economic growth, regional integration and trade. 
130. Allow me to make some observations on economic, social and trade matters. 
131. El Salvador's economic progress should of course be nefit all Salvadorans.  It is important to 
strike a proper balance between economic growth a nd the country's social development.  In this 
connection, we urge the Salvadoran authorities to continue the poverty eradication process and ensure 
that its economic development is also transl ated into significant social development. 
132. The Government has tried to counteract the negative impact of the economic and financial 
crisis through an Anticrisis Plan, which lays down  the basis for the Five-Year National Development 
Plan, to be submitted in the next few months (as announced today by the Vice-Minister).  Among 
other measures, we note the interest in expanding welfare cover, aid to SMEs and improving government finance by rationalizing public spending and fiscal reform.  In fact, last December, a 
fiscal reform was approved in order to increase fiscal revenue.  We would ask the Salvadoran authorities to confirm whether these recent fiscal me asures apply to both local and imported products 
and we take as an example the case of alcoholic beverages. 
133. The Salvadoran authorities have many fiscal incentives
, both for the manufacturing sector and 
for exporters as a whole.  Manufacturing mainly tak es place in free zones becau se of the attractive tax 
incentives but, as indicated in the Secretariat's Report,  companies in free zones have not come up with 
the expected results.  We should like to know whet her El Salvador is developing alternative and 
non-discriminatory policies that could in turn help  to achieve the objective of increasing productivity 
and the diversification of its economic base.  Al ong the same lines, could the Salvadoran authorities 
confirm when they intend to eliminate the refund to exporters of 6 per cent of the f.o.b. value of their 
exports outside Central America? 
134. Lastly, I should like to underline the efforts ma de by El Salvador to reform its government 
procurement regime  since 2003.  In particular, the efforts to  enhance the transparency of its regime 
and to unify government procurement procedures because these are very important and necessary 
steps to ensure fair competition.  We call on the Salvadoran authorities to continue making progress in 
this direction and to share with us more detaile d information on the measures intended to modernize 
and rationalize government procurement. 
ECUADOR 
135. In addition to the similarities which devel oping countries with relatively small economies 
such as El Salvador and Ecuador may have, there are two common features that are worth 
underlining.  The first concerns the adoption of a dollarized monetary system, with the risks this 
entails, and the second concerns the role played by remittances sent by nationals resident overseas as a 
dynamic factor in our economies. 
136. It is precisely these two characteristics that have increased El Salvador's vulnerability in the 
international economic crisis, leading to a signi ficant decrease in its GDP in 2009 and a growing 
balance-of-payments deficit, a situation which, if it continues, could put at risk the very stability of WT/TPR/M/226 
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  dollarization, with the unpredictable consequences this might have.  Ecuador  fully understands the 
problems facing El Salvador's economy as a re sult of the international economic crisis. 
137. It should be emphasized that El Salvador has bound all its tariffs, a practice that should be 
imitated by all Members of this Organization b ecause of the benefits it affords in terms of 
transparency and predictability and with which those countries that acceded to the WTO after the 
Uruguay Round fully comply.  We note, however, that the average MFN tariff applicable to agricultural products has increased, and if this trend continues it could restrict access to the 
Salvadoran market with the consequences this would entail for countries such as Ecuador, whose 
exports are composed of a larg e number of agricultural products. 
138. We also note from the Secretariat's Report that the contribution to the economy by free zones, 
although it remains significant, has declined in rece nt years.  This warrants an evaluation of how 
beneficial this scheme of granting fiscal exemptions  in free zones and other special regimes has been. 
UNITED STATES 
139. The United States and El Salvador enjoy a st rong trade and economic relationship.  Our 
bilateral trade relationship takes place within the broader context of excelle nt cooperation between our 
countries on a variety of matters of mutual inter est, including ongoing security and counter-narcotics 
efforts.  Trade between the United States and El Salv ador is a key element of our bilateral relations 
and generates important be nefits for both countries.  Our bilate ral trade in goods was approximately 
US$3.8 billion in 2009. 
140. For many years, our trade relationship with El  Salvador was driven by the unilateral trade 
preferences that the United States provides through the Caribbean Basin Initiative trade preferences 
programme.  This programme has contributed to eco nomic growth and development in El Salvador.  
Our bilateral relationship changed recently from one  based on unilateral trade preferences to one 
based on reciprocal free trade through the Domini can Republic-Central America-United States Free 
Trade Agreement (CAFTA-DR), a Regional Free Trade Agreement between Costa Rica, the 
Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States. 
141. Both the Secretariat and the Government Repor ts indicate that El Salvador is pursuing a 
strategy of trade liberalization at the multilateral, regional, and bilateral levels.  The United States 
commends El Salvador on the direction of its trade liberalization strategy.  On the multilateral front, 
El Salvador continues to be an active participant in the Doha Round and in the regular work of the 
WTO.  In the Doha Round, El Salvador has submitte d proposals in several areas of the negotiations, 
especially in conjunction with other Members, including market access for agricultural and 
non-agricultural goods, services, and fisheries subsidies. 
142. At the regional and bilateral le vels, El Salvador is seeking to  further liberalize trade through 
preferential agreements with various countries.  Si gnificantly, El Salvador and other members of the 
Central American Common Market continue to ta ke steps to deepen Central American economic 
integration, including actions to strengthen institu tions, harmonize regulations, and facilitate trade.  
During the review period, free trade agreements between El Salvador and Panama and between El Salvador and Colombia entered into force.  Sin ce, according to the Secretariat, El Salvador trades 
primarily with partners with which it has preferen tial agreements, we hope to hear more about how 
El Salvador seeks to ensure that  these efforts complement and reinforce the multilateral trading 
system. 
143. The CAFTA-DR represents a key liberalization st ep that El Salvador took during the period 
of review.  The CAFTA-DR was signed in August 200 4 and entered into force for El Salvador on 
1 March 2006.  El Salvador and the United States we re the first two countries to put this important  WT/TPR/M/226 
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  regional free trade agreement into force.  Under th e agreement, the Parties remove barriers to trade 
and investment, which is helping to strengthen re gional economic integration.  The CAFTA-DR also 
includes robust disciplines relating to:  customs admi nistration and trade facilitation, technical barriers 
to trade, government procurement, investment, cross-border trade in services, financial services, 
telecommunications, electronic commerce, intellectual property rights, transparency, and labour and 
environmental protection. 
144. As noted in the Secretariat and the Government  Reports, the period of review for this TPR 
was a particularly active time for El Salvador.  During this period, the G overnment implemented a 
number of significant modifications to its domestic  trade regime.  Many of these changes were 
necessitated by commitments El Salvador underto ok in the CAFTA-DR, and the benefits have 
redounded to the multilateral trading system. 
145. In customs administration, for example, the Secretariat Report notes that El Salvador has 
taken significant steps to modernize its customs procedures, while at the same time making its 
customs operations more secure.  In particular, El  Salvador has introduced a single window for 
importers, which has substantially reduced the tim e required to complete licensing formalities.  
Through its actions, El Salvador has consid erably shortened customs clearance times. 
146. Regarding intellectual property rights, El Salva dor has made significant changes in its patent, 
trademark, and copyright laws, some of which exceed the protections required in its TRIPS Agreement obligations.  In particular, El Sa lvador extended the term of copyright protection 
from 50 to 70 years, as well as the term of patent protection for pharmaceuticals.  El Salvador also acceded to four international treaties and conventions on intellectual property rights.  El Salvador took 
steps to improve the enforcement of intellectual pr operty rights, although more remains to be done in 
that area. 
147. Other notable developments in El Salvador's trade policy regime during the period of review 
include:  modernizing and strengthening the regul atory and institutional framework for government 
procurement;  putting into effect a new compe tition law and regulatory regime;  simplifying the 
procedures required to establish a new business;  in creasing transparency in trade policy formulation 
by establishing a public participation programme under which members of the public can obtain 
information and provide input on international trad e matters;  and constructing a new port, which is 
expected to begin operations in 2010. 
148. While the United States applauds these positive e fforts, there are, nonetheless, specific areas 
of El Salvador's trade policy regime where action could lead to improved trade and investment 
opportunities and flows.  We have  referred to them in our questions, but would like to touch on 
certain of those areas today. 
149. As the Secretariat Report notes, despite the tariff and tax concessions that El Salvador 
provides under its free trade zone (FTZ) regime , the performance of FTZ firms has been below 
expectations, and their linkages with the rest of  the economy are weak.  We concur with the 
Secretariat in urging El Salvador, in light of these shortcomings in the FTZ programme, to adopt a 
more neutral trade regime.  We note that the CAFTA -DR obliges El Salvador to eliminate all tariff 
exemptions subject to performance requirements.  Again, fulfilment of this obligation will redound to 
all WTO Members. 
150. The Secretariat Report states that the Export R ecovery Law has not been amended since the 
previous Trade Policy Review of El Salvador in 2 003.  The United States finds this troubling since the 
WTO SCM Agreement  extension relates only to the Law on I ndustrial and Marketing Free Zones.  
We signalled our concern in this regard in our quest ions.  We will, therefore, examine El Salvador's 
response with great interest. WT/TPR/M/226 
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  151. The United States has concerns with the recen tly amended law regula ting the production and 
sale of alcohol and alcoholic beverages.  The law appears to apply a lower rate per per centage of 
alcohol on alcoholic beverages that are typically pr oduced locally than on alcoholic beverages that are 
typically imported.  We urge El Salvador to a pply the same tax rate pe r percentage of alcohol. 
152. In the telecommunications area, we are also con cerned that El Salvador imposes a specific tax 
on international telephone calls , while exempting telephone calls originating in other 
Central American countries from the tax.  We will st udy with interest El Salvador's response to our 
written question on this issue. 
153. Regarding tariff-rate quotas on agricultural products, the Secretariat notes that in certain cases 
it lacks information on the methodology that El Salva dor used to allocate the quotas and in other cases 
it appears that El Salvador limited access to the quot as to processors that purchased domestic inputs.  
We urge El Salvador to provide greater transpar ency in the procedures u sed to allocate tariff-rate 
quotas and to eliminate restrictions on participation in those quotas. 
154. In closing, I would like to reiterate our appreci ation for El Salvador's active participation in 
the Doha Round negotiations.  I would also like to emphasize that we continue to value our close 
work with El Salvador's Government and our WT O partners to strengthen and build on the WTO's 
rules-based and cooperative foundation.  As a dyna mic economy that sees the benefits that trade 
liberalization has brought, El Salvador stands to  gain from new market access opportunities that a 
balanced and ambitious conclusi on to the Doha Round will generate , particularly in advanced 
developing countries.  We look forward to continui ng our work with El Salvador and other Members 
to ensure these gains are realized. 
PERU 
155. Trade and investment play a key role in El Sa lvador's economy, owing in part to the openness 
of its trade and investment regime.  Peru notes with satisfaction the progress made in modernizing the Customs, enhancing the transparency of technical regulations and sanitary and phytosanitary 
measures, and strengthening the institutional framework for competition policy and government 
procurement.  As part of these liberalization efforts,  El Salvador has also concluded three preferential 
trade agreements (with the United States of Amer ica, Panama and Chinese Taipei), and deepening 
Central American integration continues to be one of its main priorities. 
156. Over the period 2003-2008, El Salvador's real GDP rose on average at 3.1 per cent annually 
because of internal demand sustaine d to a large extent by remittances.  Nevertheless, from the second 
half of 2008 onwards, it suffered the impact of th e economic crisis, which en tails greater challenges 
and the need to diversify El Sa lvador's sources of revenue and l essen its vulnerability to external 
factors such as those caused by the crisis. 
157. In addition, Peru welcomes the f act that foreign direct investment in El Salvador increased by 
13.2 per cent between 2007 and 2008, reaching US$6,70 1.4 million.  The sectors which received the 
most FDI were:  finance, communications and electri city.  This is because of the measures adopted to 
improve the business climate by giving investors economic stability and legal security.  In this 
respect, El Salvador has taken several steps to make  it easier for investors to become established in 
the country, for example:  reform of the Intellect ual Property Law, reform of the Commercial Code, 
creation of the one-stop shop for services in the offices of El Salvador's commercial register in order 
to facilitate the establishment of enterprises, inter alia .  We urge El Salvador to pursue its reforms and 
improvements in order to open up still further and enhance its competitiveness. 
158. At the bilateral level, the development of economic and trade relati ons between Peru and 
El Salvador allows us to envisage increasing oppor tunities.  For example, in investment, the  WT/TPR/M/226 
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  two countries have signed an agreement on the recipr ocal promotion and protection of investment.  
This has served as a framework for large investment by firms with Peruvian and Salvadoran capital in 
one or the other country, for example, TACA Peru, operated by El Salvador's TACA Group, and the 
strategic association between the Romero Group of Pe ru and the Belismelis Group of El Salvador, in 
the form of activities by the logistics operato r RANSA CENTROAMÉRICA S.A. de C.V., with a 
projected market that will not be limited to El Sa lvador but will extend to all of Central America. 
159. In the area of trade, Peru's exports to El Salvador amounted to US$21 million in 2008, mainly 
in the mining, petroleum and petroleum by-produ cts, chemical, timber, paper and machine tool 
sectors.  Salvadoran exports to Peru have main ly been iron wires and non-alloy steel, paper and 
cardboard, medicines and textiles, with a trade bala nce in favour of Peru.  My country considers 
El Salvador to be a strategic ally because of its  economic and trade openness, the complementarity of 
our economies and the favourable conditions for fore ign investment, and this is why our authorities 
have expressed an interest in negotiating a future trade agreement that covers the Central American 
region. 
160. At the WTO, our countries share common positi ons in the G-33 framework, Aid for Trade, 
and in general, on the objective of achieving a su ccessful and balanced outcome to the Doha Round. 
INDIA 
161. The country's recent past has b een marked by a civil war.  It is a positive gesture that 
President Funes last Saturday apologized for wi despread human rights violations carried out by 
government forces during the civil war.  El Salvador  has successfully held elections in the past over 
two decades.  It is also noteworthy that press freedom is guaranteed under El Salvador's Constitution. 
162. We feel it would do well if El Salvador could al so bring under control the high incidence of 
violence and violent activities of the so-called "Maras" groups.  This could lead to further improvement in its perception by investors as a safe investment and business destination. 
163. Despite being the smallest country in Central America, El Salvador is the third largest 
economy.  Economic liberalization, the consolida tion of the peace process and a strong democracy 
have been the pillars of entrepreneurial growth.  It  is heartening to note that El Salvador has built a 
good macroeconomic policy and undertaken considerab le economic reforms after the end of the civil 
war in 1992. 
164. However, a large number of Salvadorans live in  poverty and the gap between the rich and 
poor is very wide, obviously these should be major challenges for the Government.  These 
unfortunately have further aggravated in light of  the global economic slowdown and financial crisis, 
which has led to a sharp drop in El Salvador's inwa rd remittances, a decline in its exports and inward 
FDI.  It would be interesting if the Salvador an delegation could outline the specific steps the 
Government has taken to effectively address these ch allenges.  It is observed that remittances are 
El Salvador's second-largest s ource of revenue and account for over 18 per cent of GDP.  This 
over-reliance on remittances, especially in times of  economic crisis, is an area of concern and the 
Government may consider dive rsifying its revenue streams fo r sustainable economic growth. 
165. India's relations with El Salva dor are friendly and cordial.  These have been growing in the 
recent years.  Since the previous Trade Policy Re view, several dignitaries from El Salvador have 
visited India and a number of them participated in business summits in India. 
166. Last year, India's Minister of State for Foreign Affairs met Dr Vanda Pignato, Minister for 
Social Inclusion and Civil Society.  The meeting w as aimed at further enhancing India's relations with 
El Salvador, especially in the area of healthcare. WT/TPR/M/226 
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  167. We are currently exploring the possibility of cooperation in an institutionalized manner in 
culture, education and agricultural research.  India' s exports to El Salvador though modest have 
almost quadrupled since its previous Review.  Indi a has extended several lines of credit amounting to 
almost US$25 million, we hope El Salvador will start utilizing them soon. 
168. Several business delegations from El Salvador ha ve also participated in commercial events 
organized in India.  As part of India's offer, an IT Training Centre has been set up at the Central American Technological Institute in El Sa lvador.  Given the popularity gained by this 
institute, India has decided to extend its term by another year. 
169. India has expressed its solidarity during times of natural disasters faced by El Salvador and 
extended relief assistance.  We shared El Salvador's  grief and suffering on extensive loss of lives and 
damage caused by hurricane Ida.  India made a modest cash donation of US$250,000 as humanitarian aid to El Salvador. 
COSTA RICA 
170. There are strong historical and trade links between our two countries.  As indicated in the 
Secretariat Report, the Central American Commo n Market has reached a high level of trade 
integration, which is reflected in the extensive harmonization of the common external tariff and the 
very rare exceptions to free trade among Members.  As is the case for El Salvador, intra-Central American trade is of extreme importance to Costa Rica.  Some 20 per cent of Costa Rican exports to 
Central America go to the Salvadoran market, and El  Salvador is the source of 23 per cent of imports 
from the region.  It is one of our major trading partners and in 2008 was th e tenth most important 
destination for Costa Rican exports.  In 2008, to tal bilateral trade exceeded US$400 million and has 
risen at an average rate of 9 per cent since 1990. 
171. As indicated in the Secretariat Report, El Salvador's economy, like those of other countries in 
the region, suffered the impact of the global economic crisis with a decline in growth as of the second 
half of 2008, although for 2010 it  is expected that the first signs of economic recovery will be 
glimpsed.  Echoing the recent words of the chie f economist of the Central American Bank for 
Economic Integration, the crisis struck our region  with force but it did not make it bend;  and the 
projections for 2010 show that it has started to recover. 
172. Costa Rica notes with satisfaction the importanc e attached by El Salvador to the multilateral 
trading system and to the negotiations in the D oha Development Round.  Furthermore, as regards 
trade-related measures, my delegation welcomes the efforts made by El Salvador in areas such as 
modernizing the customs system (by incorporating risk management techniques, extending use of 
information technology and the creation of a one-sto p shop), which have led to a noticeable reduction 
in the time taken for customs clearance.  We al so welcome the efforts made in the legal and 
institutional framework for competition, inter alia . 
BARBADOS 
173. We take the floor today to commend El Salvador on the important achievements it has 
attained since 2003 in strengthening its trade polic ies and practices.  The Government's efforts to 
exercise fiscal prudence and enhance its trade, e xport and foreign direct investment potential are all 
the more striking in the face of the continuing di fficulties being experienced by small, vulnerable 
economies around the world. 
174. While economic growth over the review peri od has been modest and steady, averaging 
3.1 per cent from 2003-2008, the latter part of 2008  was marked by slowdown as a result of the global 
economic crisis, which has moreover triggered a d ecrease in exports, investment and remittances from  WT/TPR/M/226 
 Page 27 
 
 
  abroad.  The importance of remittances to the Salv adoran economy is particularly pronounced when 
considering their 17.1 per cent contribution to GDP in 2008.  While the global economy currently 
stands in a delicate recovery mode, the contracti on and continued decline of El Salvador's economy, 
the decrease in formal employment, coupled with th e impact of recent natural disaster, highlights the 
vulnerable nature of this economy to external factor s.  This combination and intensity of factors has 
also had the effect of exacerbating a number of pe rsistent economic and social  challenges relevant to 
the size of the Salvadoran economy, while unde rscoring the limited policy options and resources 
available to address them. 
175. El Salvador nonetheless remains open to trade a nd investment.  We note that trade in goods 
and services in fact represented some 73.6 per cent of GDP in 2008.  Relevant achievements in their 
outward looking thrust include a significant growth in exports and diversification into non-traditional 
products, progress in the modernization of custom s procedures, elimination of unnecessary licensing 
requirements and enhancing transparency of techni cal regulations and SPS measures.  A number of 
important steps have also been taken to impr ove intellectual property protection, as well as to 
strengthen the institutional framework on compe tition policy and government procurement.  
Furthermore, foreign investment remains an importa nt pillar of development and is built upon an open 
regime. 
176. The increasing number of bilateral and regional tr ade partnerships concl uded by El Salvador 
also reflects a fundamental element of its trade policy objectives.  The significance of preferential access may be recognized through the substantial tr ade volumes recorded both for exports at 88 per 
cent and imports at 79 per cent.  At the regiona l level, trade and investment opportunities are 
enhanced through their participation in the regiona l Central American Common Market (CACM), the 
latter has also provided a framework for strengtheni ng El Salvador's relations  with other countries, 
through the CAFTA-DR. 
177. Barbados also looks forward to  enhancing our trade relations  with El Salvador, including 
through a regional arrangement, for which di scussions are at an exploratory stage. 
178. These activities complement Salvadoran inte rests towards integration into the world 
economy.  Such interests are further consolidated through participation in multilateral negotiations.  
Within the Doha Round, Barbados has been work ing very closely with El Salvador in seeking 
effective solutions to our specific trade-related n eeds.  We further recognize and appreciate the active 
role which Ambassador Lima and his team play  within the Doha Negotiations, particularly as 
coordinator for NAMA issues, and joint coordinato r for Fisheries Subsidies within the SVE Group. 
NIGERIA 
179. Nigeria is pleased to note from the Secretariat Report that since the previous Trade Policy 
Review of El Salvador in 2003, progress has be en made in modernizing customs, eliminating 
unnecessary licensing requirements, enhancing the transparency of technical regulations and SPS measures, and strengthening th e institutional framework on comp etition policy and government 
procurement.  As part of its liberalization efforts, El Salvador has entered into three preferential trade 
agreements and has continued to assign high priority to deepening Ce ntral American Integration.  
These measures have ensured real growth at an average rate of 3.1 per cent per year.  However, from the second half of 2008 onwards there was a slow down in growth because of the international 
economic crisis, which resulted in a decrease in i nvestment, exports and remittances from Salvadoran 
workers abroad;  in 2009 estimated GDP contracted by 2.5 per cent.  It will be interesting to know 
what measures are being taken by the Government  of El Salvador to balance the decrease in 
investment and exports. WT/TPR/M/226 
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  180. We note that all the aspects covered by the TR IPS Agreement are regulated in El Salvador, 
and in addition to other initiatives taken had made it easier for investors to establish themselves in the 
country.  My delegation believes that these measures would help in attracting foreign investment for 
the benefit of the country's economic and social development.  In September 2006, El Salvador 
accepted the Protocol amending the TRIPS Agreemen t on the implementation of paragraph 6 of the 
Doha Declaration on the TRIPS Agreement and Public Health.  The Amendment gives more 
flexibility to countries that do not have the capac ity to manufacture pharmaceutical products to import 
medicines.  To that end, we urge other WTO Memb ers, in particular developing countries that have 
not yet accepted the Protocol, to do so in order to ensure that the Amendment enters into force. 
181. In conclusion, Nigeria considers El Salvador as an important developing country Member of 
the WTO, and of course also as an important Member of the G-33 to which Nigeria also belongs.  We 
look forward to collaborating with El Salva dor in the ongoing Doha Development Agenda 
Negotiations.  In this context, we wish to acknowledge the constr uctive and productive engagement of 
the delegation of El Salvador in Geneva. 
JAMAICA 
182. My delegation congratulates El Salvador on its economic performance since its previous 
Review, particularly during the period 2003-2008.  During this period, El Salvador achieved positive 
economic indicators, such as average annual real GDP growth of 3.1 per cent, peaking at 4.7 per cent 
in 2007, and inflation levels below 5 per cent for 2003-2007. 
183. Since 2008, however, El Salvador has suffered si gnificant reversals as a result of external 
factors and developments over which it had no co ntrol.  The global economic downturn has had a 
deep impact on El Salvador's economy and overall gr owth prospects, and has resulted in declines in 
exports, domestic production, remitta nces and investment.  The impact of the global economic crisis 
was further exacerbated by Hurricane Ida in No vember 2009, which caused loss of life and 
infrastructural damage.  The Salvadoran authorities have introduced initiatives to  respond to the social 
and economic challenges wrought by the global economic  downturn.  This is being done through a 
mixture of fiscal policies, continued structural re forms and support from the international community 
to manage recovery, stimulate fu rther economic development and avoi d further social dislocation.  
Despite reports that there is recovery in the global economy, experience from past crises has shown 
that recovery, especially in small developing econom ies, will be slow and protracted, and it will be 
some time before the full impact of the global economic crisis on these countries can be fully 
assessed. 
184. International trade plays an important role in the economy of El Salvador with international 
trade in goods and services accounting for 73.6 per cent of GDP in 2008.  Trade policy is an important 
tool for promoting social and ec onomic development in El Salvador  as reflected in its efforts to 
restructure and stabilize its economy, including throu gh initiatives to pursue further liberalization at 
the domestic, regional and multilateral levels. 
185. At the domestic level, El Salvador maintain s an open and competitive market.  Since its 
previous Review, El Salvador has continued with its internal reforms and has introduced competition 
legislation, strengthened its government proc urement regime and further liberalized its 
telecommunications sector. 
186. At the regional level, El Salvador has been pursuing its trade policy within the context of 
bilateral and regional arrangements to diversify its export market and product base to achieve a more 
balanced integration into the multilateral trading system.  El Salvador has concluded free trade 
agreements with a number of countries.  It also  continues to deepen and consolidate its regional 
integration process within the context of the Central American Common Market (CACM).  The  WT/TPR/M/226 
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  CACM has also sought to deepen its links with other regional blocs in the western hemisphere, 
including CARICOM.  Exploratory discussions ha ve been held on the possibility of negotiating a 
free trade agreement between the two regions. 
187. El Salvador remains committed to a rules-based multilateral trading system and plays an 
active role in all aspects of the WTO work  programme, including the Doha negotiations.  
Its delegation is very ably led by Ambassador Lima.  El Salvador is an active participant in a number 
of groupings in the WTO, including the Small Vulnerable Economies (SVEs).  As part of the 
SVE Group, El Salvador has submitted several proposal s seeking appropriate levels of flexibilities to 
facilitate these countries' effective integration in to the multilateral trading system.  My delegation 
wishes to acknowledge El Salvador's role in coordinating SVEs in NAMA and, more recently, 
fisheries subsidies. 
188. Jamaica has warm relations with El Salvador.  We have full confidence that our bilateral 
relations will grow and deepen further over the co ming years as the multilateral and regional trade and 
development agendas evolve. 
HONDURAS 
189. El Salvador has been a Member of the WTO since May 1995 and we welcome its active 
participation in the Doha Development Round, underlining the importance it attaches to the 
negotiations on agriculture.  It is also one of the countries that defines itself as a small and vulnerable 
economy, putting forward proposals in areas such  as market access in th e agricultural sector, 
non-agricultural products and services, and aspects relate d to fisheries subsidies, and as a member of 
the G-33 it advocates special and differentia l treatment in agricultural negotiations. 
190. At the national level, we note with satisfacti on that El Salvador's per capita GDP rose from 
around US$2,500 in 2003 to US$3,600 in 2008, even though it has not been immune either to the global financial crisis and since 2008 has seen eco nomic growth decline significantly, meaning a 
reduction in investment, exports and remittances from workers overseas. 
191. We note with great satisfaction that over the peri od covered since the previous Review of its 
trade policy in 2003, El Salvador has continued to  liberalize its trade policy regime, with special 
mention of the modernization of the Customs, im proved licensing procedures, enhanced transparency 
of various regulations and strengthening of the institutional framework, both as regards competition 
and government procurement policy. 
192. Concerning markets, Honduras is an important pa rtner as it exports around 14 per cent of its 
products to our country and we occupy fourth place for its exports.  As regards imports, Honduras is 
in fifth place with around 3 per cent.  Likewise, ove r the period under review, its trade balance with 
our country was in favour of El Salvador.  As far as FDI is concerned, Honduras is one of the 
investors in El Salvador, investing just over US$19 million in 2003 and over US$22 million in 2009. 
193. El Salvador elaborates its trade policy with the main objective of deepening the 
Central American integration process and reinforc ing flows of trade and investment, one of the 
mechanisms for opening trade still further, and ne gotiating and signing trade agreements, as well as 
strengthening the Central American Common Market  (CACM), with special emphasis on reinforcing 
the Customs Union.  The Free Trade Agreement between the Dominican Republic, Central America 
and the United States (CAFTA-DR) came into fo rce for El Salvador in March 2006 and is of 
particular importance because of the increase in El Salvador's exports to the United States.  
El Salvador has free trade agreements with th e Dominican Republic, Mexico, Chile, Panama and 
Chinese Taipei.  It also has agreements with c ountries belonging to the LAIA, for example, Partial 
Scope Agreements with Colombia and Venezuela.  As a member of the CACM, it is negotiating an WT/TPR/M/226 
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  Association Agreement with the European Unio n and together with Guatemala, Honduras and 
Nicaragua free trade agreements with Canada and CARICOM. 
194. With regard to market access, as a minimum El  Salvador applies MFN tariff treatment to all 
Members of the WTO and to non-members.  Regarding the structure of its tariffs, all the rates applied 
are ad valorem .  The simple average of MFN tariffs applied fell from 7.4 per cent in 2002 to 
6.3 per cent in early 2009.  The average rate for ag ricultural products is 12.9 per cent, compared to 
5.2 per cent for other products.  In addition, it has bound 70 per cent of its tariff lines at an average of 40 per cent.  As far as tariff protection is concerne d, this has lessened for preferential partners under 
the free trade agreements in force and the averag e tariff applied under these agreements ranges from 
1.0 to 4.9 per cent. 
195. We note with satisfaction El Salvador's achieve ments in regard to competition, both in the 
regulatory and institutional frameworks.  In this respect, El Salvador and Honduras have 
understandings on these aspects through similar competition institutions. 
196. Turning to technical regulations and standard s, El Salvador has continued to make the 
elaboration and application of such regulations and sanitary and phytosanitary measures more 
transparent.  In the Secretariat Report, we note that  El Salvador applies measures that are contrary to 
intraregional free trade and these affect the import of oranges from Honduras.  For this reason, we 
should like to ask the Salvadoran authorities whether this measure will be repealed soon. 
197. El Salvador gives preferential tariff treatment to imports from other members of the CACM.  
Almost all products originating in the CACM are subject to zero duty.  The only products imported 
from Honduras to which El Salvador does not apply a preferential rate are unroasted coffee, distilled 
alcoholic beverages and petroleum products, while ethyl alcohol is subject to import control. 
198. We should like to congratulate El Salvador  on the efforts it is making to meet the 
commitments undertaken and urge it to conti nue with its efforts to liberalize trade.  WT/TPR/M/226 
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  V. REPLIES BY THE REPRESENTATIVE OF EL SALVADOR AND ADDITIONAL 
COMMENTS 
199. I shall divide my comments into three main areas:  (a) economic and institutional 
environment, (b) trade policies by measure, and (c) sectoral policies.  For each of these areas, I shall 
endeavour to cover the questions and comments ma de by the Discussant, as well as those areas on 
which the majority of Members' comments and obser vations focused in the course of this exercise. 
200. Regarding El Salvador's ec onomic environment, although it was recognized that the 
Salvadoran economy's growth was stable over th e period 2003-2008, there were also several 
references to the impact of the global financial and economic crisis on our country, specifically the 
decline in international demand, the reduced flow of FDI, the reduction in remittances, tax revenue 
and tourism revenue. 
201. I should like to emphasize that ev en when facing up to the effects of this crisis, which had a 
negative impact on all countries but especially deve loping countries, until now El Salvador has not 
turned to any protectionist measures. 
202. As can be seen, the impact of this crisis po sed an enormous challenge to work actively in 
public spheres to elaborate and implement economic , social and trade policies that benefit the 
population, especially those who lost their incomes a nd jobs as a result of the crisis.  In order to 
mitigate the effects of the crisis for the popul ation, an unprecedented economic situation, the 
Government launched the Global Anticrisis Plan, whic h in our country covers the creation of jobs, 
social welfare, promotion of education, as well as s hort-term measures to alleviate the crisis with a 
clear commitment to the population that the most needy sectors should not have to pay the cost of a 
crisis for which they are not responsible.  It is al so important to note that this Global Anticrisis Plan 
lays down the bases for a medium and long-term Nati onal Development Plan to ensure higher levels 
of well-being for the population as a whole. 
203. As already mentioned, work is going on to  implement a strategy to boost production and 
investment that will improve quality and productiv ity levels and introduce cross-sectoral innovation 
and technology in order to give renewed impetus to economic growth, a strategy without precedent in 
El Salvador.  Together with this strategy, a te rritorial development strategy and a strategy for the 
efficient development of internal capacity complement the elements of what will shortly be launched in El Salvador under the title of the Five-Year Plan , which will not only be the Government's plan of 
work for the next five years but will also have a medium and long-term vision. 
204. Guidelines have also been defined to contro l public spending and to improve the taxation 
system, for which fiscal reform has been elaborat ed with a view to increasing the State's revenue, 
bridging the fiscal gap by using our own resources and providing more resources for social programmes and promoting production. 
205. The initial economic indicators for 2010 show th at El Salvador's economy could achieve 
growth of 1 to 2 per cent of GDP and even though th is is a low figure it is a source of hope in the 
context of the global crisis and we hope that 2011 will  be better than the preceding years, particularly 
through the implementation of short, medium a nd long-term governmental, economic, trade and fiscal 
policies in order to take full advantage of the im portant role which trade in goods and services plays 
in El Salvador's economy. 
206. As regards economic and trade policy objectives and as indicated in the first part of this 
exercise, El Salvador has decisively opted for Cent ral American integration as the main route for the 
development of our countries and it is thus our prio rity.  In this connection, throughout this Review, 
Members have referred to the fundamental import ance of El Salvador's trade with bilateral and WT/TPR/M/226 
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  regional partners and how we e xpect to complement these effort s in order to strengthen the 
multilateral trading system. 
207. It should be pointed out that the Government of  El Salvador recognizes the importance of the 
multilateral trading system under the auspices of the WT O as the main axis for its trade policy, and it 
will continue to do so.  Our country attaches speci al importance to the activ ities taking place in the 
WTO bodies.  For example, although the Doha Rou nd negotiations represent a daunting challenge, we 
will participate as a country actively and constructivel y with a view to their conclusion, as has been 
recognized by Members. 
208. One of the priorities of El Salvador's trade polic y is how to use to the full the benefits derived 
from free trade at the bilateral,  regional and multilateral levels. 
209. The aim is to build production and exportable  capacity, particularly among micro, small and 
medium-sized enterprises so as to enable them to compete on international markets using tools that 
comply with the rules of multilateral trade. 
210. With regard to the comments on certain free tr ade agreements signed by El Salvador with its 
leading trading partners, I should like to emphasize that these are intended to deepen relations that go 
beyond strictly trade relations.  They aim to liberalize flows of trade in goods, services and investment, all in strict compliance with the para meters laid down in this Organization, establishing 
new political and cooperation association mechanisms for this purpose. 
211. Regarding the comments made by some Members on trade policy by measure and specifically 
the question of government procurement, some Me mbers have recognized the efforts made by our 
country to enhance the transparency of its regime and to harmonize government procurement 
procedures.  This has meant major efforts and we hope that these are recognized as such.  Some 
Members have also requested further informa tion on the measures intended to modernize the 
government procurement process.  At present, th e Government of El Salvador is conducting a 
diagnostic exercise in order to decide on a stra tegic plan to modernize government procurement 
procedures still further. 
212. Several Members have also raised concerns  regarding El Salvador's fiscal incentive 
programmes.  I should like to be quite clear and em phatic on this question because it is important to 
point out that the current administration, led by President Mauricio Funes, is fully aware of its 
international commitments, and is developing an integral strategy to promote domestic production and 
investment transparently and in consultation with ou r private sectors of course, but in particular it is 
consistent with the multilateral tradi ng framework.  This strategy is in its final stages, on the point of 
being implemented, and is expected to yield results in the short term. 
213. As a government, this has to be done in a res ponsible manner and must effectively take into 
account the development objectives we have defined in  order to continue building and strengthening 
our economic and democratic system;  in the pr esent economic situation, this is absolutely 
indispensable. 
214. Regarding the free zones programme, it is importa nt to mention and to emphasize to Members 
that El Salvador has an extension until 2015 and, in  compliance with its multilateral commitments, an 
action plan for the conversion of these schemes will be presented in due time.  Although some 
questions focused on economic performance in this sect or, as mentioned in the Secretariat's informal 
report, and mention was also made of the link to  other industries operating outside the regime, the 
importance of free zones for the social dimensi on and for the country's development are obvious 
because the sector employs some 10 per cent of El Salvador's workforce.  WT/TPR/M/226 
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  215. As we have already indicated, this scheme shoul d be seen as a programme with a large social 
component.  We are the first to agree that this sch eme needs modifications that are consistent with 
international rules, with the demands of empl oyment and with our country's investment and 
capitalization needs.  What the Government of El  Salvador is seeking is a combination of these 
elements. 
216. In the case of sanitary and phytosanitary measur es, in particular, the question on application 
of the Central American Regulations on Sanitary  and Phytosanitary Measures and Procedures, these 
form part of domestic legislation and, as such, are directly enforceable. 
217. During this exercise, some Members drew atten tion to the positive steps taken by our country 
to facilitate trade by reducing authorization requi rements and urged El Salvador to eliminate the 
import visa still required.  It is important to point  out that the authoriza tion requirement for these 
products has been imposed for reasons of security and public health, whic h we believe is fully 
consistent with our commitment s under the relevant agreements. 
218. Turning to the third area concerning sectoral po licies and in relation to the different and 
varying comments made on the services sector, it is a ppropriate to recall that for El Salvador this 
sector is of crucial importance because it accounts for around 60 per cent of our GDP.  The Schedule 
of Specific Commitments contains broad commitm ents in various sectors such as business services, 
tourism, the environment, transport, the professions , as can be seen from the high levels of foreign 
investment in important global sectors. 
219. El Salvador also accepted the Fourth and Fi fth Protocols, intensifying its Uruguay Round 
commitments in the telecommunications and financial sectors.  El Salvador's legislation on 
telecommunications and financial services is acknowle dged as being one of the most advanced in the 
region. 
220. The Salvadoran services market stands out as being one of the most open in the region, with 
very few restrictions.  Businessmen consider El Salvador's regulatory envi ronment to be a legal 
structure that provides certainty for users, allows freedom for foreign investment, facilitates access to 
local financing, and protects and guarantees private property. 
221. With regard to the present Doha Round nego tiations on services, depending on the progress 
made in the negotiations, as is the case for other areas  in the Doha Agenda, El Salvador will consider 
expanding its commitments.  We want to see progress for our country, that is to say real access to 
sectors and within modes where we have export pot ential and to which access is not possible at 
present because of the restrictions imposed by other Members. 
222. El Salvador has been asked to reflect the pr ogress made through autonomous liberalization in 
the negotiations taking place at the multilateral level on access to markets for goods, which would 
mean a sizeable reduction in bound tariff levels.  El Salvador has a transparent and predictable tariff 
structure and has bound 100 per cent of its tariffs.  It  is also an open economy with very low applied 
tariffs, through which our trade partners are given access to markets. 
223. Consequently, as a small and vulnerable econom y committed to a stronger multilateral system 
and to the Doha Round negotiations, El Salvador plans to make commitments on market access that 
are in line with its development objectives and levels , as well as with the balance and benefits that can 
be achieved as a result of these negotiations. 
224. In the statements and questions by Members,  reference was made to scarcity quotas, which 
constitute additional market access given with in the multilateral framework.  These quotas are 
determined on the basis of technical criteria such as annual production, domestic demand for a WT/TPR/M/226 
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  product, volume of imports and volume of exports.  It is important to note that these quotas are 
allocated to interested parties which meet the relevant requirements. 
225. As far as customs procedures are concerned, many Members have pointed to the progress 
made by our country so far, including the reducti on in the time taken for customs clearance below the 
average for OECD member countries.  As we are aware of the benefits  ensuing from such efforts, we 
in the administration will continue to encourage modernization of these procedures with a view to 
better facilitation of international trade. 
226. In conclusion, I should like to state that although  El Salvador is facing daunting challenges in 
the future, as is the case for all other Members in th is Organization, this exercise in transparency has 
highlighted the important progress made by El Salvador in the area of trade policy. 
DISCUSSANT 
227. From the report by the Vice-Minister of El Salvador, Mr Hernández, and the comments made 
by Members on the first day, it seems to me that the main issues and areas of concern arising out of this review are these - but of course not necessaril y limited to the ones I am about to mention:  
El Salvador's actions in response to the financial crisis, and its concrete plan for economic, fiscal and 
social reform.  The clarification and explanation pr ovided for certain trade measures, in areas such as 
customs valuation, TBT and SPS, and the MFN treat ment for certain products.  The enforcement and 
implementation of certain programmes or arrangeme nts on some sectoral policies relating to tariff 
quotas, and also to transport, financial, telecommuni cations services.  And, finally, some suggestions 
have been made that El Salvador might consider intr oducing further reforms or plans to create an even 
more liberal trade regime. 
228. The delegation of El Salvador has already done its utmost to provide us with every possible 
detail in its written responses to questions.  Some fu rther questions might, of course, arise from those 
responses, or some more clarification may be needed  by certain Members today.  I am confident that 
the team led by Vice-Minister, Mr Hernández, or later under the leadership of Ambassador Lima, will 
complete the work to everyone's satisfaction. 
EUROPEAN UNION 
229. The EU thanks the delegation of El Salvador fo r the comprehensive replies to our questions as 
well as the additional information pr ovided today.  However, we have  found that some replies have 
not provided quite sufficient information.  So me examples where we would appreciate a more 
elaborated reply by El Salvador. 
230. Questions 1, 8 and 14 - we appreciate the refe rences provided, however, the EU would need 
answers that clarify further and provide informati on.  Thank you for replying to these questions again 
in a more detailed manner. 
231. Our question regarding the elimination of the 6 per cent exporters' refund:  please indicate 
whether the authorities are currently considering the elimination of this refund, and if so, what the 
time-frame is. 
232. We seize the opportunity to raise two follow-up questions, relating to tax concessions, 
relating to paragraphs 122 to  126 of the Secretariat Report.  The Secretariat Report notes that the 2007 
"Law on international services" grants tax incentives to enterprises who export services and that are 
located in some "parks" or service centres.  Impor ts aimed at offering such services benefit from 
income tax exemptions and tax and tariff facilit ies.  Activities that can be facilitated include  WT/TPR/M/226 
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  international distribution services, software deve lopment, international call centres and others. The 
Ministry of the Economy is in charge of authorizing such facilitation. 
233. Could El Salvador please clarify whether these exemptions are limited or full tax exemptions 
and whether a deadline is scheduled, taking into acc ount that paragraph 123 states that "the incentives 
provided by the Law are granted as long as the business is operating"? 
234. Furthermore, we would be grateful if El Salvador could confirm whether single ad hoc 
authorizations are issued for each enterprise that is concerned, and which objective criteria are taken 
into consideration to issue that authorization. 
235. The EU hopes that this TPR has be en a useful exercise for El Salvador.  In our view, a useful 
and successful TPR is the one that brings transpar ency and additional clarif ication and information 
about the Member's trade policies and measures and which genuinely leads to some reassessment and 
policy modification on the ground.  Therefore, we hope that El Salvador will continue to move in the 
right direction in terms of reform and liberali zation, and reflect carefully on the remarks and 
observations raised during these two days of review. 
UNITED STATES 
236. We would like to thank the delegation of El  Salvador for the responses provided to our 
advance written questions.  Unfortunately Washingt on has been closed all week because of the bad 
weather conditions, so they have not been able to  carefully review the responses provided.  We will 
have a few follow-up questions and we will be submitting them in writing next week. 
DOMINICAN REPUBLIC 
237. In line with the concern expressed by the delegate  of the European Union, particularly with 
regard to the Export Recovery Law, we shoul d like to take advantage of the presence of 
Vice-Minister Hernández and his colleagues from the capital to ask for further details concerning the 
concrete steps being taken to make  this Law consistent with the re gulations of the WTO and when we 
can expect this to be done. 
CHILE 
238. Regarding free zones and other incentives, we awa it the action plan in order to examine it in 
the Committee on Subsidies and Countervailing Measur es, which is the appropriate and proper forum 
for examining the measures taken by El Salvador to dismantle these programmes in accordance with 
its commitments. 
GUATEMALA 
239. I take this opportunity to reiterate our inter est in seeing the question of import of swine and 
their by-products from Guatemala regularized.  We again call on the delegation of El Salvador to 
ensure that the procedures laid down in the Central American Regulations on Sanitary and 
Phytosanitary Measures are put into effect and respected. WT/TPR/M/226 
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  EL SALVADOR 
240. Regarding the question of free zones, as I indi cated in my statement, we shall submit an 
action plan and shall also deal with the question of the 6 per cent refund, where there is a clear 
decision on the part of the administration to convert  this scheme into one that is consistent with 
international trade rules.  I am also pleased to in form the delegation of Guatemala that the question of 
the import of swine was fully resolved with El Sa lvador two weeks ago by means of recognition by 
the respective sanitary authorities.  WT/TPR/M/226 
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  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
241. This third Trade Policy Review of El Salvador  has given way to an excellent exchange of 
views among Members, contributing to a better unders tanding of its trade and investment policies and 
practices.  This has been made possible by th e clear and comprehensive presentations by the 
Salvadoran delegation, led by Vice-Minister Herná ndez, the comments by our discussant, Mr Lin, and 
by the active participation of many Members. 
242. El Salvador was commended for the continued li beralization of its trade regime.  Members 
praised El Salvador's participation in the WTO, in  particular its active involvement in the DDA.  
Members took note of El Salvador's engagement in preferential trade agreements and of the priority it attaches to Central American integration.  They noted the important role played by multilateral, 
regional, and bilateral commitments in El Salvador's process of structural reform. 
243. Members commended El Salvador for its stea dy economic growth during the period under 
review, but noted that the effects of the global  crisis on El Salvador have been severe.  
The continuation of liberalization and structural reform, including through increased export market 
diversification, reduced dependence on remittances, a nd higher levels of savings and investment were 
seen as important to re-establish growth.  Member s also noted that, although progress has been made, 
poverty alleviation remains a challenge. 
244. Members noted that El Salvador's average app lied MFN tariff rate remained largely stable 
during the period under review, while encouraging El  Salvador to increase the certainty of its import 
regime by reducing bound tariff rates.  In respon se to concerns by some Members about the possibly 
discriminatory application of taxes on imported alc oholic beverages, El Salvador stated that these 
taxes are applied irrespective of the origin of th e goods.  Members commended El Salvador's efforts 
to facilitate trade through customs modernization, but urged El Salvador to  continue reducing and 
simplifying import licensing requirements.  El Sa lvador replied to numerous questions posed by 
Members concerning specific aspects of its TBT and SPS regimes. 
245. Members commended El Salvador for strengtheni ng its legal and institutional framework, 
including in the areas of competition policy, intellectual property rights, and government 
procurement.  Some Members noted that El Salva dor would benefit from joining the GPA.  Several 
Members noted that El Salvador's export incentiv e programmes had not had the desired outcome and 
urged El Salvador to align them w ith its international commitments.  In response, El Salvador stated 
that its refund programme for exporters is under review as part of the implementation of a 
comprehensive production and investme nt strategy compatible with mu ltilateral trade rules, and that 
export subsidies under free trade zones will be e liminated in accordance with El Salvador's 
international commitments. 
246. Some Members considered that the admini stration of agricultural tariff quotas lacks 
transparency, and that agricultural marketing arra ngements hinder competition.  In this regard, 
El Salvador stated that it is reviewing marketi ng arrangements.  Members commended El Salvador for 
the liberalization and opening of its services sector, particularly in the areas of financial services and 
telecommunications.  They also invited El Salva dor to strengthen this process and expand its GATS 
commitments to reflect current practice in orde r to increase the predictability of its trade and 
investment regime.  El Salvador replied to numerous questions posed by Members concerning 
specific aspects of its services regime. 
247. 
In conclusion, Members welcomed El Salvador 's commitment to the WTO, and unanimously 
commended El Salvador on the overall direction of its  trade liberalization strategy during the period 
under review.  I would thus encourage El Salvador to continue using trade as an effective catalyst to 
sustain economic and social development. WT/TPR/M/226 
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  248. I would like to close this review by thanki ng once again Dr Hernández and the rest of 
El Salvador's delegation, the Discussant, and the Memb ers that participated in this review.  I would 
also like to express my appreciation to the delegati on of El Salvador for the responses provided, and 
look forward to receiving responses and clarification to outstanding issues within one month.  Finally, 
I thank the interpreters for their hard work. 
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