WORLD TRADE  
ORGANIZATION   
WT/TPR/M/254 
9 January 2012 
 (12-0063) 
Trade Policy Review Body 
14 and 16 November 2011  
 
 
 
TRADE POLICY REVIEW 
 
ECUADOR 
 
Record of Meeting 
 
Chairperson:  H.E. Mr Mario Matus (Chile) 
 
   Page 
 
I. 
INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II.  OPENING STATEMENT BY THE REPRESENTATIVE OF ECUADOR 4  
III.  STATEMENT BY THE DISCUSSANT 9  
IV.  STATEMENTS BY MEMBERS 19  
V.  REPLIES BY THE REPRESENTATIVE OF ECUADOR AND ADDITIONAL COMMENTS 38  
VI.  CONCLUDING REMARKS BY THE CHAIRPERSON 45  
 
   
 
    
 
     
 
  _________________________________________________________________________________ Note: Advance written questions by WTO Memb ers and the replies provided by Ecuador are 
reproduced in document WT/TPR/M/254/Ad d.1 and will be available online at 
http://www.WTO.org/english/tratop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/254 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The second review of the trade policy of Ec uador was held on 14 and 16 November 2011.  
The Chairperson, H.E. Mr Mario Matus (Chile) welcomed the delegation of Ecuador, led by 
H.E. Mr Francisco Rivadeneira, Vice-Minister fo r Foreign Trade and Economic Integration, and the 
discussant, H.E. Mr Luis Manuel Pian tini Munnigh (Dominican Republic). 
2. The Chairperson recalled the purpose of the trade policy reviews and the main elements of the 
procedures for the meeting.  The report of th e Government of Ecuador was contained in 
document WT/TPR/G/254 and that of the WTO Secretariat in document WT/TPR/S/254. 
3. Questions posed by the following delegations had been communicated in writing at least 
two weeks before the meeting and had been pass ed on to the delegation of Ecuador:  Brazil, 
United States, Mexico, Costa Rica, Chile, Colombia , European Union, Paraguay, Japan, Canada and 
Peru. 
4. The following delegations had submitted writt en questions after the expiry of the 
two-week deadline:  Turkey and India. 
5. The Chairperson said that he had considered the reports prepared for this meeting by Ecuador 
and the Secretariat.  He noted with satisfaction th at the trade policy review of Ecuador afforded an 
excellent opportunity to discuss certain systemic issu es of considerable interest to those responsible 
and those in charge of drawing up trade policies.  These issues included:  (i) institutionalization of the 
transparency mechanism;  (ii) the benefits and limitations of operating in a dollarized economy 
(currency board);  (iii) the role played by improved productivity in increasing international 
competitiveness and raising living standards;  (iv) the effectiveness of industrial policy (including 
import substitution, export restrictions, and State-ow ned companies);  and (iv) the role played by 
regional economic agreements in e nhancing the economy's productivity. 
6. He noted with satisfaction that, during the pe riod under review (2005-2011), Ecuador, a small 
and relatively open "dollarized" ec onomy dependent to a large extent  on oil revenue, had successfully 
withstood the global financial crisis.  It had done so without any notable setback in liberalizing its 
trade or any action affecting the value of its currency.  As Ecuador was implementing far-reaching 
changes to redefine its economic and social devel opment strategy, he imagined that many Members 
would be interested to hear how Ec uador intended to deal with its vul nerability to external shocks and 
the role of structural reform, including trade liberaliz ation (particularly in certain sensitive sectors), in 
diversifying products and markets.  Lastly, Member s would also be interested in learning about the 
measures adopted by Ecuador to guarantee a more stab le and predictable trade and investment regime. WT/TPR/M/254 
Page 4  
 
  II. OPENING STATEMENT BY THE RE PRESENTATIVE OF ECUADOR 
7. One of the most important features of Ecuador 's economy is that it does not have its own 
currency and uses the United States dollar for everyday  purposes.  For Ecuador, this has had two basic 
effects:  it no longer has its own monetary policy and cannot make use of monetary instruments to 
manage the economy.  It has also meant that Ecuador's economy increasingly depends on the 
performance of its external sector. 
8. Ecuador's new development strategy restores the State's role as the planner and organizer of 
economic activity, essential for any long-term developm ent strategy, doing away with the belief that 
the market alone is capable of achieving efficien t and socially effective results.  The two basic 
instruments that have provided the bases for th is process upon which we have embarked are the 
Constitution of the Republic, adopted in 2008 by an overwhelming majority of  Ecuador's population, 
and the National Plan for "Good Living" 2009-2013 , which traces the path we must follow for the 
next few years. 
9. In this respect, development in general a nd economic policy in particular recognize the 
human being as subject and end, promoting a dynami c and balanced relationship in society, in 
harmony with nature, and laying down the bases for a change in the system of accumulation so as to 
encourage distribution and redistri bution of the benefits of the process.  I must make myself quite 
clear in this respect, the Government of Ecuador's intention is not indiscriminate intervention by the 
State that takes over from private initiative.  What  we are aiming for is strategic intervention to 
guarantee that the benefits of development go to a ll sectors of the population, particularly the most 
vulnerable. 
10. Moreover, the State does promote private initiativ es.  One example is the investment by the 
Ecuadorian Government in providing basic infrastru cture, for example, highways, electricity and 
telecommunications for the most part, so as to create a climate for sustainable competition and lower domestic production costs.  These investments will yi eld returns in the future and should not be seen 
as expenditure, although recently they have unfo rtunately been interpreted as such.  These 
investments are necessary and priorities.  Ecuador cannot wait any longer to implement them because 
they are the essential factors binding together the production base which the country needs. 
11. Along the same lines, the aim of trade policy is  to achieve efficient integration into the 
international economy to enable Ec uador to overcome its status as an agricultural exporting country.  
We are seeking broad and mutually supportive integration that reinforces the country's own 
development, restoring the balance in its geopolitical relations in the international context.  Key areas 
for action have been defined that are not only aimed at diversifying products and markets but also at 
concluding strategic alliances with countries so as  to promote the complementarity of economies 
through production chains and reducing asymmet ries by recognizing differences in size and in 
development. 
12. Having briefly outlined the most important featur es of my country and its current situation, 
allow me to mention some specific aspects that sh ow the success achieved through implementation of 
the development strategy we propo se by the Government of Ecuador. 
ECONOMIC OUTLOOK 
 
13. In 2010, Ecuador's economy continued to r ecover despite - and after - the 2009 crisis, 
growing by close to 4 per cent;  in 2011, the growth rate was one of the highest in Latin America at 
over 5 per cent.  As far as inflation is concerned,  2010 ended with a figure of approximately 3.33 per 
cent, just below the Government's forecast, and the lowest for the past three years.  Per capita GDP 
continued to rise, reaching over US$4,000.  WT/TPR/M/254 
 Page 5 
 
 
  14. The successful conclusion of debt restructur ing led to a reduction in its amount and the 
savings were used for priority social investment  and for infrastructure to develop production in 
Ecuador.  Income received through the General State Budget between January and December 2010 
amounted to some US$15 billion, approximately US$3 billion more than during the same period in 2009.  Income received in 2010 was up by around  29 per cent on the 2009 figure, thanks mainly to 
an increase in tax revenue and in oil income amou nting to US$2,112 million.  The growth in tax 
revenue mainly reflects the income from value adde d tax (VAT), which grew by 24.1 per cent, and 
other taxes, which increased by 24.8 per cent compared to the previous year. 
TRADE TRENDS 
 15. Since Ecuador adopted the dollarization regime, foreign trade has become even more 
important for the domestic economy as it is largel y responsible for the flow of foreign currency 
circulating in the country.  Since its previous  TPR, Ecuador's openness index rose from 53.2 per cent 
in 2005 to 63.3 per cent in 2010.  The country's ove rall trade balance has stayed  in surplus, except in 
the past two years, which is a matter of concern.  This contrasts with the non-oil trade balance, which 
is characterized by a structural deficit, thus accentuating the importance of oil sales over and above 
other products. 
POVERTY AND INEQUALITY 
 
16. The trend in income poverty over the past five years has been extremely encouraging, despite 
the international crisis.  Income poverty natio nwide declined from 37.6 per cent in 2006 to 
32.8 per cent in 2010;  over the same period, in urban areas, the index fell from 25.9 per cent to 
22.5 per cent;  and in rural areas from 60.6 per cent to  53 per cent.  These results can be explained by 
the policies implemented to raise wages and by  the reduction in extreme poverty as a result of 
government support through the implemen tation of a broad social programme. 
17. The inequality index has been the lowest for th e past decade.  The gap, essentially measured 
using the Gini coefficient, fell from 0.52 to 0.47 over  the period June 2007 to June 2011, the result of 
the implementation of government policies to restore public services, providing goods and services to the most vulnerable population groups, e.g. quality edu cation and health services.  It is important to 
mention that these figures are also the result of the application of better practices for income redistribution among the Ecuadorian population. 
18. Lastly, unemployment among the most vulnerable population groups has decreased.  Ecuador 
has one of the lowest unemployment rates in Latin Am erica.  Some of the key explanations for this 
performance are the increase in public investment, the boost given to the construction sector, the 
reforms in the labour sector such as a return to a decent wage, and workers' compulsory affiliation to 
the Ecuadorian Social Security Institute, inter alia . 
FINANCIAL POLICY 
 
19. It is essential for Ecuador to consolidate a stable  and strong financial system in the long term, 
based on appropriate indicators of liquidity, solven cy and asset quality, while avoiding oligopolistic 
practices.  For this purpose, the thrust of governme nt policy is to provide support for the financial 
security network so as to ensure better systemic risk  prevention and deal with any future bankruptcies 
at the lowest possible social cost.  Accordingly,  the Government is working actively to strengthen 
supervision and control of the financial system.  Th is new structuring of the financial system enabled 
Ecuador to successfully adopt counter-cyclical po licies during the latest global financial crisis 
in 2009. WT/TPR/M/254 
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  NEW TRADE POLICY APPROACH 
 
Organic Code of Production, Trade and Investment 
 
20. The Organic Code of Production, Trade and Investment was published on 29 December 2010 
in the Official Register  of Ecuador.  Together with the Agenda for the Transformation of 
Production (ATP), the code develops a new strategy in concert with production sectors and academia.  
In the investment sphere, the code encourag es, protects and guarantees domestic and foreign 
investment in changing production structures and redist ributing returns fairly to the community.  The 
ATP lays emphasis on the importance of 14 producti on sectors, priorities for the Government because 
of their major effect on employment levels inasmu ch as they generate valu e-added, and delocalize 
production activities countrywide. 
TARIFF POLICY 
 
21. Tariffs are one of Ecuador's key trade policy in struments, particularly as it has no monetary 
policy.  The average MFN tariff applied was lowered from 11.4 per ce nt in 2005 to 9.2 per cent in 
2011 and almost 54.5 per cent of applied MFN tari ff rates currently range from 0 to 5 per cent. 
FOREIGN TRADE PROGRAMME 
 
Multilateral sphere 
 22. According to the 2008 Constitution, the major elements of foreign trade policy include 
recognition of international law as the standard  of conduct;  promoting "democratization" of 
international organizations, together with eff ective implementation of special and differential 
treatment, leaving room for government policy in th e commitments adopted.  In this regard, Ecuador 
has done its utmost to ensure that the WTO Doha Development Round is concl uded.  Lastly, Ecuador 
assigns a leading role to multilateralism in its trad ing relations as it considers it to be the most 
appropriate forum for developing countries in va rious coalitions (Bolivarian Alternative for the 
Nations of our America (ALBA), Agricultu re G-20, tropical products, new Members, inter alia ) to 
promote the adoption of trade rules and disciplines  aimed at eliminating existing distortions in 
international trade. 
23. I should like to state that Ecuador has made re gular notifications, pursuant to transparency 
requirements, in the areas of agriculture, sanitary and phytosanitary measures, and technical barriers 
to trade.  It is currently working hard to up date overdue notifications , while guaranteeing their 
continuity. 
Bilateral sphere 
 24. As a result of a new vision of trade and its links to development, Ecuador is encouraging 
negotiations on trade agreements for development wh ich include three fundamental pillars:  trade, 
cooperation and political dialogue.  With this aim,  Ecuador is preparing a broad negotiating agenda 
with various countries in the world.  Likewise, at the plurilateral level, it continues to give priority to 
its participation in the Andean community and its move towards MERCOSUR, as well as 
Latin American integration thro ugh traditional bodies such as the LAIA, but also new ones like 
UNASUR, inter alia . 
CUSTOMS FACILITATION FOR TRADE 
 
25. The past five years (2005 to 2010) have broug ht about a noticeable improvement in customs 
services so as to facilitate foreign trade and cont rol more closely the entry and exit of goods, cargo  WT/TPR/M/254 
 Page 7 
 
 
  units and means of transport.  The result is that to tal clearance time fell from 11.91 days to 6.54 days 
in 2010.  This has not led to any decline in tax revenues, which instead were up 53 per cent on 
2005 levels. 
FOREIGN DIRECT INVESTMENT 
 
Regulatory framework governing foreign investment 
 
26. As of 29 December 2010, Ecuador has had an up-to-date legal framework that fosters 
production and private investment in the country.  The code in question is the legal instrument needed 
to give the ATP a modern framework that encourages  private investment in production.  The code of 
Production promotes the development of higher va lue-added businesses capable of transforming the 
production matrix through investment-oriented incentives at the general, sectoral  and regional levels.  
It further provides that foreign investments and i nvestors are to enjoy full protection and security, on 
an equal footing with their Ecuadorian counterparts. 
27. Investors will also be able to sign "investment contracts" with the Ecuadorian State to protect 
their investments.  These will define the investme nt conditions for a renewable 15-year period, and 
can specify the national or international ar bitration mechanism for resolving disputes. 
GOVERNMENT PROCUREMENT 
 
28. As highlighted in the Secretariat report and despite the fact that Ecuador has not made any 
commitments on government procurement, the govern ment procurement system was established and 
is regulated through the National Institute for Gove rnment Procurement (INCOP) in order to ensure 
compliance with its priority objectives and allow foreign firms to take part in public bidding 
procedures. 
STRATEGIC SECTORS 
 29. As regards strategic sectors, the State reserves the right to administer, regulate, control and 
manage them, in accordance with  the principles of environmental sustainability, precaution, 
prevention and efficiency, but this does not prevent national or foreign private investment for their 
development. 
Investment outlook 
 30. The National Government has developed an econom ic model based on substantial investment 
in infrastructure.  Major national projects have been launched that will bring considerable new 
dynamism to the economy by generating jobs, incr easing the capital stock and future savings, and 
supporting production.  Major hydroelectric projects are currently under construction.  Likewise, the 
renegotiation of oil contracts has, on the contrary , brought new investment into the sector and the 
possibility of increased exploitation of the count ry's oil reserves.  The Eloy Alfaro Pacific 
Refinery (RDP) is set to become Ecuador's leadi ng refining and petrochemicals complex as it will not 
only refine oil but will also generate raw materials for the petrochemicals industry. 
31. Investments totalling US$11.8 billion are planne d up to 2015 and the complex will be fully 
operational by 2016.  The National Government  has begun negotiating contracts with foreign 
companies for responsible mining exploration and expl oitation.  The mining of Ecuador's vast mineral 
resources, as yet unexplored, such as gold, silver and copper, will give th e economy a powerful boost, 
with positive spin-offs in terms of jobs, cr eating wealth and diversifying exports, inter alia .  These 
mining projects are being negotiated in an endeavour to regulate, and lessen the risks associated with, WT/TPR/M/254 
Page 8  
 
  small-scale mining operations, and mitigate the envi ronmental impact in the areas where such 
activities are conducted. 
32. Lastly, with regard to the Secretariat report, I should like to express our gratitude to the team 
in the Trade Policy Review Division who, in the sh ort time they were in Ecuador, well understood the 
new concept of Ecuador's trade policy and its key statistics.  Nevertheless, Ecuador does not share 
certain values of judgement in the Secretariat repor t, or some sources of information used for this 
purpose.  In some cases, these have led to errors  in data and interpretation of Ecuador's chosen 
development model and this has resulted in concer ns and questions on the part of Members of the 
Organization. 
33. Ecuador will communicate with the Secret ariat in writing and will meet with the 
Organization's officials in order to readjust a nd correct the conclusions and data erroneously 
compiled.  Some of these we were able to identify concern areas such as:  social and infrastructure 
investment, financing prospects, restoration of the population's purchasing power, the role of the State, the new trade negotiations approach, boosting production, regularity of Ecuador's notifications, 
privatization, subsidies, Ecuador's commitments  on services, preferential trade agreements, the 
Andean price band system, land concentrati on, domestic support, and financial services, inter alia .  WT/TPR/M/254 
 Page 9 
 
 
  III. STATEMENT BY THE DISCUSSANT (H.E. MR LUIS MANUEL PIANTINI 
MUNNIGH (DOMINICAN REPUBLIC)) 
MACROECONOMIC SPHERE AND STRUCTURAL POLICIES 
 
34. Ecuador, El Salvador and Panama are the th ree dollarized economies in Latin America and 
are also small and vulnerable medium-income econom ies.  Ecuador's authorities adopted this system 
in 2000 following a serious financial and currency crisis so it has had over a decade's experience in 
managing without any monetary or foreign excha nge policy.  During this period, dollarization 
provided Ecuador with price stability, positive per ca pita economic growth and predictability for the 
value of external exchanges and flows, trade and private investment, as well as lowering transaction 
costs and low financial costs.  These gains give Ecuador comparative advantages.  Nevertheless, 
dollarized economies remain more exposed to the imp act of external shocks than countries with their 
own monetary policies as they lack the means of offsetting the negative effects because the expansion 
or contraction of the internal supply of m oney in such countries is conditioned by the 
balance-of-payments figures. 
35. The situation has been even more critical for these countries during the serious global 
economic crisis because, from its onset, it affected private sources of external financing capable of 
filling the gap that exists when there is no moneta ry stabilization fund or lender of last instance, 
essential for maintaining the stability of domestic li quidity in such economies, which is the role 
played by the European Central Bank in euro-zone countries. 
36. In 2009, the gravity of the global economic cris is had a significant impact on Ecuador, which 
saw the value of its exports fall by 8 percentage points of the GDP.  The balance-of-payments deficit 
was 5 per cent of GDP, which led the domestic  economy to contract by an amount exceeding 
10 per cent of the expanded money supply and equiva lent to 21 per cent of the total value of bank 
deposits by companies and households (according to da ta in an ECLAC report).  This deficit affected 
two thirds of the value of the external reserves avai lable at the end of 2008.  This strong contraction 
would have been even more severe without the safeguard measures taken by the authorities and 
notified to the WTO, which caused  a decrease in imports of goods.  The maintenance of government 
investment programmes offset the decline in priv ate spending and enabled the economy to end with 
positive growth, mitigating the impact of the crisis on social sectors.  In 2010, growth was boosted by 
an improvement in the external accounts, reaching 3.6 per cent, half the rate achieved in 2008. 
37. The levels of openness to foreign trade in Latin America's three dollarized economies are 
equivalent to 70 per cent of GDP.  For these monetary systems with a high degree of openness, 
measures at the border are one of the few means av ailable to the authorities to confront serious 
situations such as the one described, to avoid an ev en sharper decline in domestic liquidity and a more 
serious negative impact on their real economies and so cial indicators.  Furthermore, in Ecuador's case, 
only one product, oil, accounts for over 50 per cent of  the total value of its exports of goods and in 
2009 oil prices fell by almost half. 
38. In dollarized economies, variations in domestic liquidity can also be affected by policies;  
fiscal policy on the consolidated balance;  cr edit policy through management of the reserve 
requirement and interest rates;  wage policy that has an impact on the relative price of tradable goods 
and services;  and social security policy with pens ion plans that make up long-term financial savings. 
39. The performance of Ecuador's economic and social indicators as a whole over the 
period 2005-2010 was noteworthy in comparison with ot hers in the region, as can be seen on page 71 
of the IMF publication Regional Economic Outlook:  Western Hemisphere  of October last.  The 
average rate of inflation of 4.3 per cent was one  of the lowest and one third below the regional 
weighted average over the five-year period.  Annual growth of 4 per cent in GDP was similar to the WT/TPR/M/254 
Page 10  
 
  regional weighted average for the period in ques tion and current GDP in dollar terms increased by 
51 per cent.  Domestic savings as a percentage of GDP at 26.1 per cent were the second highest in the 
region.  The balance-of-payments current account had an annual average surplus of 1.4 per cent.  Over 
this period, fiscal pressure was 6.7 percentage points higher than GDP at 19.7 per cent, above the 
Latin American weighted figure and the fourth hi ghest in the region, doubling of revenue brought 
income up to 34 per cent of GDP, yielding an annual average fiscal surplus (IMF).  This performance, 
inter alia , brought about a 53 per cent decrease in the public debt, with a value equivalent to 
20.4 per cent of GDP at the end of 2010, 66 per cen t less than the regional weighted figure and the 
third lowest among Latin American and Caribbean countries. 
40. For this year and next, in its aforementione d publication the IMF estimates that GDP will 
grow by 5.8 per cent in 2011 and 3.8 per cent in 2012, higher than the forecasts for the region, and 
inflation rates will be lower than the regional rates.  It is also estimated that  the public debt/GDP ratio 
will remain below 21 per cent, the result of the surplus forecast for the public sector in 2011 and 
a slight deficit in 2012.  The current account defi cit will remain at around the same levels with 
3.3 per cent of GDP recorded in 2010, affected by the strong expansion in domestic spending, which 
means that if Ecuador is to maintain this level of  spending it has to make greater efforts to increase the 
flow of medium- and long-term capital to close the current gap. 
41. Encouraging progress has also been made in soci al indicators.  According to information in 
the Government report, between 2006 and 2010 poverty fell by almost 5 percentage points, the urban 
unemployment rate dropped from 9 per cent to 6.1 per cent, and at the end of the period poverty 
affected 32.8 per cent of the total population.  The Gini coefficient, which measures income 
distribution, showed a net improvement, falli ng from 0.53 to 0.47.  In the aforementioned 
IMF publication, the poverty rate in 2010 (daily inco me of less than US$2.50) applied to 19.4 per cent 
of the population (this figure probably corresponds  to the rate of urban poverty) and the 
Gini coefficient of 0.489 (the sixth lowest of the 22 countries covered by these data).  These 
achievements were made possible by the increase in the real minimum wage of close to 30 per cent 
over these five years;  the average increase of 4.6 per cent annually in private real consumption;  
increased tax revenue;  development, financing a nd regularization programmes to bring micro and 
small enterprises into the formal sector;  and increased social spending by the Government, mainly 
intended for programmes directed at the lowest -income sectors of the population such as the 
Joaquin Gallegos Lara programme, the Human Development Bond and the Human Development 
Credit.  In the latest Latinobarómetro survey (an annual regional survey conducted by a private NGO 
based in Chile), the Ecuadorian population's percepti on of the effectiveness of the income distribution 
policies was the highest in the region, increasing by 10 percentage points in comparison with the 
previous year. 
42. Allow me to say a few words about the performance of the macroeconomic indicators.  The 
data for the region's economies on the ratio betwee n gross investment rates and economic growth 
would appear to show that Ecuador  needs to improve the productivity of gross capital formation.  If 
we look at Ecuador's annual investment rates of 24.8 per cent of GDP over the past five years and compare these with other economies in South and Ce ntral America, we could expect that the economy 
would achieve higher annual average rates than the 4 per cent recorded.  Panama is also a dollarized 
economy whose annual average gross investment rate is  the same as that of Ecuador, but it recorded 
double Ecuador's annual average rate of economic growth (8.1 per cent) over the same period.  
Argentina and Peru, with average investment rates of 22.2 per cent, achieved annual growth of 7.2 per 
cent, and Uruguay, with an investment rate of 19.0 pe r cent, recorded growth of 6.4 per cent.  The vast 
investment being made in infrastructure projects, including the generation of hydroelectricity, should improve investment productivity in the medium and long terms. 
43. Ecuador is obliged to diversify its goods, services and export markets so as to lessen the 
vulnerability represented by its marked dependence on oil and bananas, which account for two thirds  WT/TPR/M/254 
 Page 11 
 
 
  of the total value of exports, particularly in view of the considerable damage caused to its dollarized 
economy by negative external shocks.  Even t hough the variety of goods exported doubled over the 
past decade, reaching a figure of 3,147, and the va lue of non-traditional exports tripled, the latter only 
represent 6 per cent of total exports.  We also note with concern the twofold increase in the value of 
imports over the past five years, with the bala nce of goods going from a positive 4.2 per cent of GDP 
in 2006 to a negative 2.7 per cent in 2010, incited by strong private consumption and robust public 
investment.  Even though the variety of goods imported stayed at around 4,300 products over the decade, one third of the increase in the value of imports was for energy products, which are given 
high domestic subsidies.  We consider that both the objective of boosting exports with higher value 
added and selective import substitution, as set out in the National Plan for Good Living, are not 
mutually exclusive and, on the contrary, can both be  successful if promoted together.  The target of 
the 2010 ATP is to increase exports of manufactur es, excluding oil, by 50 per cent in 2013. 
44. In the third paragraph of the Secretariat repor t, it is indicated that Ecuador is among the 
world's least competitive economies, based on data in the world economic forum publication in 2010.  
Moreover, in footnote 33, it is stated that the stru ctural divergence of the economy is reflected by low 
productivity.  The Government has acknowledged this situation in Ecuador's industrial policy for the 
period 2008-2012, reinforced by the 2010 Organic C ode of Production, Trade and Investment, which 
is intended to foster firms that give Ecuador's vast natural resources value added by incorporating 
innovative technologies and processes, encouraging production chains and raising productivity and 
systemic competitiveness.  The 2011-2013 Nationa l Development Plan as well (the Good Living 
Plan) and the ATP of 2010 in the eight pillars incorporate these objectives of changing the primary 
export model into a knowledge-based  economy, products with high va lue added and in harmony with 
the protection of nature.  To provide support for this change, the progressive decrease in private 
investment over the period examined, amounting to  5.2 percentage points of GDP, needs to be 
reversed, encouraging domestic capital and the in flow of external investment, given Ecuador's 
considerable potential to encourag e such an increase.  Large public  investment to strengthen the 
physical infrastructure, accompanied by an energetic  policy to promote private investment that brings 
technology, innovation and links to the outside, are factors which could enhance the productivity and 
competitiveness of the economy, helping it to grow, provi de stable jobs and lower the pressure that is 
starting to be felt in the foreign trade balance. 
45. In a study carried out recently by the University  of Harvard and the Massachusetts Institute of 
Technology ( The Atlas of Economic Complexity ) to measure over time the multiple uses of knowledge 
acquired by a country that has modified its production structure, table 4 measures the changes in 
economic complexity in a total of 128 countri es over the period 1964-2008 and Ecuador ranks 44
th 
and eighth among the 21 selected countries in Latin America and the Caribbean.  When the changes 
for the period 1998-2008 are measured, its ranking falls slightly. 
46. We note the existence of public investment projects, which generally come to fruition over 
the long term and are financed through medium-term lo ans, as indicated in footnote 10, and payments 
are made using the existing volumes of oil production, both  situations that could exert pressure on the 
balance-of-payments in the future. 
47. The high government subsidies for energy, corresponding to 4 per cent of GDP, are an 
obstacle to greater progress in the public sector's investment and social programmes.  The experience 
of Latin American countries with generalized subsid ies mainly given during the last three decades of 
the 1990s did not help to achieve better income dist ribution, contrary to what was achieved by the 
same countries during the past two decades with th e implementation of their own social programmes 
solely targeted at the lowest income groups, some  of them exactly like those being carried out by 
Ecuador.  Furthermore, subsidies are an incentive fo r smuggling, transferring the benefits yielded by 
sacrificing government income to higher income gr oups and countries with higher selling prices, and 
obfuscating the real levels of competitiveness of the national firms benefiting from them.  The WT/TPR/M/254 
Page 12  
 
  modification of the electricity matrix with hydroelectric power coming on line and a policy to convert 
transport to use of cheaper and less polluting fuels such as natural gas would help to reduce the high 
subsidies given for fuel. 
48. Ecuador has a commendable level of public indebt edness, 50 per cent below the legal limit.  
Nevertheless, current spending, wh ich shows a very rigid downward trend, rose by 4.4 percentage 
points of GDP, reaching the high level of 17.1 per cent of GDP, and recently there was a large 
increase in wages, which will exert further upward pressu re.  In this respect, it has to be borne in mind 
that this level is slightly below the level of fisc al pressure, which makes public investment, the main 
source of fixed assets and the catalyst for economic growth in Ecuador, almost  wholly dependent on 
tax revenue from oil, whose international price is  subject to international political and economic 
uncertainties. 
49. In the light of Ecuador's monetary system and its marked fiscal dependence on oil, the need to 
maintain a national fiscal reserve fund should be c onsidered, to be funded through surplus revenue 
from oil defining a ceiling price and used to offset  decreases in tax revenue defining a floor price. 
50. An extremely punitive tax on outgoing foreign cu rrency transactions, even if it discourages 
the inflow of short-term investment capital because  of low interest rates on deposits, could reduce the 
bank multiplier, increase the money in government ha nds and affect private credit, whose coefficient 
is low in relation to GDP, and at the same time encourage illegal cross-border transactions.  This 
becomes a cost that affects the goods produced in terms of inputs, raw mate rials and imported capital 
goods. 
51. I do not intend to be as categorical as the Secretariat report, which on pages 8 and 83 states 
that more State intervention in the economy (priorit y sectors, selective substitution and social welfare) 
does not necessarily contribute to a more efficient allocation of resources and has not led to major productivity gains, and hence improved internatio nal competitiveness, when for Ecuador we are 
referring to an extremely short period of time in wh ich to assess these effects.  Furthermore, the recent 
global financial crisis has taught us that the invisibl e hand of the market is not so invisible to some, 
that it does not always efficiently allocate res ources because of the imperfections in the data 
transmitted, not showing information that is only possessed by private interest groups.  What is important is that this State intervention does not in troduce distortions that turn out to be extremely 
costly in the end and moreover does not divert resources that could be used to strengthen the 
infrastructure and for social programmes towards pr oduction activities that could easily be carried out 
by the private sector. 
52. In the Dominican Republic's case, experience in  managing State-owned enterprises, inherited 
after the expropriation of the dictator Trujillo's assets, was not positive.  Up to the 1980s, State participation in the economy was over 50 per cent of GDP.  These State-owned enterprises went 
bankrupt, with the exception of the State comme rcial bank which faced competition and had to 
comply with banking regulations.  The only services fi rm that remained in private hands during that 
period was the telephone company and telecommuni cations has now shown itself to be the most 
rapidly growing sector over the past decade, where as the electricity service was in government hands 
and had one of the highest prices per kW in the world, stopping my country from building a Dominican Republic such as the one we have t oday and causing the loss of countless opportunities 
for investment and development in sectors such as  engineering to increase the value added of our 
mining resources. 
53. The labour reforms introduced in recent years ha ve not only led to payment of a decent wage 
by employers but have also given tax incentives to  employers who recruit disabled persons, a measure 
which we welcome.  In view of Ecuador's special features, wages have an immediate impact on  WT/TPR/M/254 
 Page 13 
 
 
  variations in relative prices, so the authorities s hould monitor the impact of this variable on those 
sectors it is wished to boost. 
TRADE POLICY 
 
54. Ecuador is a proactive Member in this Organi zation, making important contributions in the 
various Doha Round negotiating committees and in the regular bodies such as the Dispute Settlement 
Body, deeming that the multilateral rules afford levels  of security and predictab ility to defend its trade 
interests.  Ecuador has not been a respondent in an y dispute brought before this Body.  Ecuador also 
believes that the multilateral trading system must be  an instrument for development, as well as being 
"inclusive" and socially responsible so to as to a lleviate poverty and counteract the harmful effects of 
trade on the biosphere and climate change.  Th e Secretariat report indicates that Ecuador has 
improved the submission of notifications in the Or ganization's various areas and, with Secretariat 
support, is implementing a project to improve the pr esentation of notifications so as to regularize their 
frequency, for example, in relation to agricultura l goods, import licensing, sanitary and phytosanitary 
measures and information on customs tariffs and trade. 
55. The Constitution was approved in 2008 and the nume rous laws and regula tions it entailed are 
either being implemented or drafted and, because th ey are so recent, they do not permit any analysis 
of the impact of their implementation on various policies and sectors.  They have identified the 
State's goals, making the mechanisms for action transparent, guaranteeing private property, 
prohibiting confiscation, giving priority to support for micro and small enterprises and granting national and non-discriminatory treatment to foreign investment, except in so-called strategic areas, 
streamlining the legal framework and providing additional guarantees fo r investment contracts in the 
Organic Code of Production, Trade and Investment of December 2010.  Investment must reflect the 
priorities in the National Development Plan.  A si ngle window system facilitates the registration of 
new companies, although according to the World Bank Ecuador is one of the countries that requires 
the most bureaucratic formalities, time and cost, in  order to set up a company and make it easy to do 
business.  Since 2012, the authorities have implemented the Without Formalities  programme to lessen 
requirements and bureaucratic costs for companies.  The adoption of the Organic Code in 2010 and its 
implementing regulations appear to have resolved the problem of legal complexity in relation to 
foreign investment.  The authorities have been request ed to provide more info rmation on this situation 
and on investment guarantees. 
56. The authorities have expanded the democratic  space and are using the legal means of 
referendums to ensure greater participation by th e population in decision-making on important issues.  
A referendum held last May restricted banking oper ations by financial services firms so as to avoid 
the causes that lay at the origin of the global financ ial crisis, prohibited owne rship of communications 
media by non-media companies and prohibited casinos  and gambling.  As far as foreign investment 
policy is concerned, several delegati ons have requested clarification of  this aspect and of the situation 
concerning the new regulations for the existing b ilateral investment agreements signed between 
two States. 
57. Ecuador has signed international anti-corruption agreements and is participating in various 
regional mechanisms.  Pursuant to the Constitution, the Transparency and Soci al Control branch of 
government was set up to prevent and fight corrupti on, together with the National Secretariat for 
Transparent Management.  There are also la ws on access to public information and against 
money laundering.  In the latest Latinobarómetro su rvey, the public's perception of the authorities' 
fight against corruption was noted very favourably , 20 per cent higher than the regional average.  
Despite the efforts made to harmonize legal texts go verning trade and finance, in the business sphere 
there are still over 14,000 laws and regulations, so me of which are contradictory and call for the 
authorities' due attention in order to rationalize and streamline them. WT/TPR/M/254 
Page 14  
 
  58. Through its constitutional mandate , Ecuador's strategic and priority objective is the political, 
cultural, and economic integration of  Latin America.  It plays an active role in regional integration 
mechanisms such as the LAIA, UNASUR, ALBA, inter alia .  Ecuador also encourages the 
strengthening and creation of regiona l monetary and financial mechanis ms that assist the development 
of these countries and shield the region from the ne gative effects of external crises.  With other 
members of ALBA, it has introduced a regional currency, the Unitary System of Regional 
Compensation (SUCRE), which in the first inst ance will act as a common accounting currency at an 
initial exchange rate of S/1.25/US$1 to equalize tr ade balances between the countries belonging to the 
monetary mechanism.  This is very similar to the LAIA reciprocal credit arrangements, which act as a clearing house for member countries, but the debt crisis in the 1980s, payment defaults by central 
banks and the liberalization of capita l flows reduced its regional use. 
59. Ecuador has also signed several partial sc ope agreements with Chile, Mexico, Cuba, 
MERCOSUR and Guatemala.  In the LAIA, it receives special tariff preference treatment from other member countries, together with Paraguay and Bolivi a, covering one quarter of the total value of its 
exports and one third of the value of imports. 
60. As to trade disputes, Ecuador, together with other Latin American countries, was 
a complainant to the DSB against the EU's banana re gime, a dispute that ended after 15 years with the 
signing of the Geneva Agreement in December 2009.  A second case as a complainant was against the anti-dumping measure imposed by the United States against the import of Ecuadorian shrimps, which concluded with the United States applying the Pa nel's recommendations in 2007.  These two cases 
highlight the important role played by multilateral ru les in protecting the trade of small and vulnerable 
economies. 
61. Tax revenue earned from imports accounts for 13.3  per cent of total fiscal revenue.  Imports 
are subject to various charges.  Some 95 per cent of tariff lines are ad valorem  and all of them have 
been bound at an arithmetic average of MFN rates of  21 per cent.  In May 2011, Ecuador's tariff 
nomenclature comprised 7,241 ten-digit lines in the HS 2007, 4.1 per cent more than in 2005. 
62. During the period under review, Ecuador lowere d the average tariff from 11.4 per cent to 
9.4 per cent and the amount earned ranged from 4.2 per cent to 6.1 per cent of the total imports.  The average rate on industrial imports fell by 3 percenta ge points to 7.6 per cent and for agricultural goods 
by the same amount to 19.6 per cent.  The applied rates of 0 and 5 per cent covered 53 per cent of the 
headings.  Tariff quotas apply to 17 agricultural products, but have not been used. 
63. The margin existing between the bound tariffs and the applied tariffs has enabled Ecuador to 
deal with its balance-of-payments and liquidity pr oblems caused by the international crisis while still 
complying with its WTO obligations.  Neverthele ss, since 2010, Ecuador has had a structure that 
includes 17 ad valorem  rates and ten compound rates that repl aced the safeguard measures.  Several 
delegations have requested Ecuador to identify the ad valorem  equivalents (AVEs) for 356 tariff lines 
whose ad valorem  rates have been replaced by compound rates.  Ecuador has indicated on a number 
of occasions in the Council on Trade in Goods that ca lculation of the equivalents has shown that they 
remain within the bound rates.  The Secretariat report states that these modifications have made the current tariff structure more complex and dispersed.  In 2005, the tariff only had 13 ad valorem  rates. 
64. There are also 19 ten-digit tariff lines whose applied rates are 5 to 15 points above the bound 
rates.  The authorities have indicated that this situation will be remedied as soon as the work of 
transposing Ecuador's bindings into the HS 2002 h as been completed.  In August last, through 
resolution 17 of the Foreign Trade Committee, par tly amended by Resolution 24 of the same month, 
import licensing was introduced for several comm unications and transport products, a measure 
regarding which some delegations have request ed the authorities to provide further details.  WT/TPR/M/254 
 Page 15 
 
 
  TRADE FACILITATION 
 
65. Trade facilitation has been brought up to date with the adoption last May of new regulations 
to streamline procedures, and with support from the Korean Customs a more transparent and efficient 
computerized system is being introduced to ensure  customs control, facilitate trade and electronic 
clearance through a single window.  This will lessen  still further the time needed to clear goods, 
which has already dropped from 11.9 days to 6.5 da ys.  The preshipment inspection scheme has been 
abolished and there are fewer physical inspections.  The authorities have indicated that procedures for 
granting import licences will be made simpler when the single window starts to operate in 2012.  
Tariff quotas subject to the Andean price band system  are allocated to importers according to their 
record of consumption, with a requirement to mark et the same product of domestic origin.  During the 
review period, no tariff quotas were utilized.  The au thorities have pointed out that there is some 
confusion regarding the commitment undertaken in the 1996 protocol, when Ecuador acceded, to 
dismantle this system, but it can only be changed at the subregional level.  The commitment only 
concerned Ecuador's national tariff adjustment schem e, which was dismantled at that time.  Import 
prohibitions and restrictions affect fewer products than was the case at the time of the previous review 
and are applied for reasons relating to animal or plant health, the environment, safety or security. 
66. Since its previous review, Ecuador has not adopted or maintained any anti-dumping or 
countervailing measures, with the exception of an investigation into polypropylene film from Chile 
and Oman.  The Ministry of Foreign Affairs is responsible for investigating such cases and COMEX 
is in charge of applying the duties.  As regards the special safeguard measure in the WTO Agreement 
on Agriculture, no measure was taken during the review period.  The WTO was notified of the 
imposition of safeguards on the import of windshields  for three years in September 2010.  At the 
Andean Community level, safeguards were imposed  on the import of turkeys in 2010 and a safeguard 
is under consideration for onions.  In 2009, in acco rdance with Ecuadorian regulations, those of the 
Andean Community and the WTO, safeguards were  imposed for balance-of-payments reasons on 
various goods.  These were notified to the Orga nization and lifted within the allotted time. 
67. Ecuador has notified the WTO of its legislation on customs valuation, which complies with 
the Organization's provisions.  Duties are determined  on the basis of the c.i.f. value using the 
transaction value method.  Ecuador has been requ ested to reply to the checklist of questions on 
customs valuation. 
STANDARDS 
 
68. Ecuador's Constitution, adopted in 2008, prot ects the right of citizens to have access to 
high-quality goods and services, indicating that the Law will determine the mechanisms for 
controlling quality and will impose sanctions for in jury or poor quality.  The Organic Code of 
Production, approved in 2009, incorporates the provisions of the WTO's TBT Agreement.  The same 
year, Ecuador gave Members of the TBT Committee explanations regarding the application of the 
new mandatory conformity assessment requireme nts.  In early 2011, 3.6 per cent of 
Ecuadorian national standards were identical to inte rnational standards and 30 per cent were modified 
versions, with 530 mandatory and 1,906 voluntary t echnical standards in effect.  During the review 
period, the authorities notified the WTO of 58 tec hnical regulations and five conformity assessment 
procedures.  Several delegations have requested furt her information on the reduction in the number of 
mandatory technical standards and their transfor mation into technical regulations, as well as on 
raising the percentage of Ecuadorian standards b ased on international standards and whether the 
IDEM quality seal is part of the conformity assessment scheme. 
69. Turning to sanitary and phytosanitary measur es, the Constitution declares Ecuador free of 
transgenic crops and seeds and the 2009 Organic La w on the Food Sovereignty Regime regulates the 
use of biotechnology.  The main legal provisions on animal and plant health are set out in national WT/TPR/M/254 
Page 16  
 
  laws, which also contain the relevant WTO ru les.  The Andean Community has updated the 
Community's regulations on sanitary requirements for trade both within the subregion and with 
third countries.  It has common sanitary and phyto sanitary requirements for 31 agricultural products 
and the majority of animals and animal products.  Since 2005, Ecuador has sent 279 notifications to 
the WTO on sanitary and phytosanitary measures.  Ecuador imposes restrictions on the import of 
animals and animal products from countries where di seases that may affect domestic production have 
been detected. 
70. With regard to government procurement, Ecuador  is not a signatory to the WTO Plurilateral 
Agreement on Government Procurement and provides neither preferential nor national treatment to 
foreign suppliers.  The legislation, institutional structure and procedures introduced in 2009 have 
enhanced transparency and competition and at the same time have streamlined and computerized 
procedures.  Accordingly, in October 2010, the National Government Procurement Institute (INCOP) 
was awarded the Joseph François Robert Marcello prize by the Inter-American Network on Government Procurement (IDB, OAS, and the Ca nadian International Development Agency). 
71. The authorities have utilized the National Gove rnment Procurement Scheme (SNCP) as an 
effective and innovative means of improving income distribution.  In 2010, the value of contracts 
represented 11 per cent of GDP, of which 66 per cent went to micro and small enterprises and 11 per cent to medium-sized enterprises.  Cont racts for goods and services with national content 
exceeding 40 per cent and 60 per cent accounted for ar ound 20 per cent and 80 per cent, respectively.  
In 2010, the operation of the SNCP enabled particip ating State-owned enterprises and entities to make 
savings equivalent to 7.2 per cent of the value of  the contracts.  Suppliers must be listed in a 
Single Register and this is compulsory.  Legal persons domiciled in tax havens are immediately 
disqualified. 
72. Some agricultural exports, bananas, coffee, are s ubject to the payment of taxes which are used 
to finance activities related to these crops.  These and other agricultural and fisheries exports are also 
subject to minimum or reference prices determined according to their international prices, which form 
the basis for the purchase price paid to producers by intermediaries or exporters so as to ensure that 
producers receive fair prices. 
73. Exporters may also receive a refund of the ta xes paid on imported inputs and raw materials 
used during the corresponding prod uction process, the tariff, VAT, th e special consumption tax (ICE), 
which is a special tax on certain goods in order to discourage their use, for example, firearms, as well 
as the contribution to the Children' s Development Fund.  The refund may not exceed 5 per cent of the 
f.o.b. value of the goods exported.  In 20 10, 388 exporters benefited from this refund. 
74. The Organic Code replaced the maquila  and free zones regime by a special economic 
development zones (ZEDE) regime, which provide s various tax concessions.  The purpose of the 
ZEDE is to promote diversification of domestic production and of exports, including innovative 
products.  Three types of ZEDE may be set up dependi ng on the type of production.  They may apply 
for tax credits for VAT and import goods and servic es under the duty-free regime.  In addition, they 
are not liable for taxes on capital or interest paid  on loans from international financial institutions. 
75. A second-tier State-owned bank, the National Finance Corporation, grants loans through 
financial intermediaries in the form of lines of credit called DICOMEX to finance the marketing and 
production of exportable goods, for a term of one year at interest rates that are twice as high as the 
inflation rate.  There are no government export insurance or guarantee programmes. 
76. 
There are various indirect taxes on consumption, including VAT at a rate of 12 per cent, 
although food, public services, paper, tractors, etc. are exempt;  the ICE, at a rate ranging from 5 to 
300 per cent depending on the type of goods (for example, cigarettes at 150 per cent, incandescent  WT/TPR/M/254 
 Page 17 
 
 
  lamps at 100 per cent).  Direct taxes are at a rate of 25 per cent, which will fall by 1 per cent annually 
down to 22 per cent in 2013, and may be reduced to 15 per cent if a company buys new equipment or 
machinery, after having distributed 15 per cent of its profits among the employees, as required by law.  Mining concessionaires pay a minimum royalty of 5 per cent on the value of sales and a tax of 
70 per cent on windfall profits. 
77. There are three tax incentives to promote domestic  production:  general, sectoral, and for 
depressed areas.  General incentives consist of a reduc tion of 3 percentage points in income tax;  
additional deductions when calculating income tax to boost productivity, innovation, and eco-efficient 
production;  deductions when calculating the additi onal compensation for payment of a decent wage;  
five-year exemption from the advance payment of inco me tax requirement on investment in priority 
sectors;  reform of the calculation of the advan ce payment;  together with incentives for ZEDE.  
Sectoral incentives and those for regional development apply to sectors which contribute towards the change in the energy matrix and to priority sectors. 
78. The National Finance Corporation, like the National Development Bank, has credit 
programmes to boost production sectors, with interest  rates that range from 5 per cent to 11.5 per cent 
higher than the inflation rate.  Commercial interest rates may be up to 20 per cent higher, but this does 
not mean that these are market rates but could be a reflection of dominant positions or oligopolies in 
the market. 
79. Under the ATP, three new programmes have been set up for firms in 14 priority sectors:  the 
EmprendEcuador Programme, the CreEcuador Pr ogramme and the InnovaEcuador Programme.  The 
authorities have tripled government investment in  research and development and plan to increase it 
from 0.44 per cent of GDP to 1 per cent in 2013, as part of government support for innovation and 
technology policies as the bases for developing systemic competitiveness. 
80. The Constitution, as well as the Andean Comm unity's legal framework and the Executive 
Decree of 2010, constitute the sole comprehensive se t of rules for implementing competition policy at 
national level.  In the second half of the year, a dr aft law will be put before the Legislature providing 
for the creation of a supervisory authority to cont rol market power.  In some cases, sectoral laws 
provide for the establishment of regulatory bodies with responsibility for competition and the Foreign 
Trade and Investment Law prohibits any practices or arrangements that restrict free competition. 
81. The Constitution provides for a pricing policy, but such policies face serious problems, not 
only for government finance as is the case for ener gy, but also for the goods and services concerned 
and, depending on the scope, may have a serious overa ll impact on the economy, specifically in terms 
of the scarcity and disappearance of production. 
82. Ecuador participates in nine of the 24 treaties administered by the WIPO and has not changed 
its international commitments on the protection of intellectual property rights (IPRs) since the 
previous review.  The Constitution prohibits all fo rms of appropriation of collective knowledge in the 
areas of science, technology, and ancestral knowledge  and also the appropriatio n of genetic resources 
derived from biological diversity or agricultural diversity.  A 1998 Law governs protection of IPRs 
and industrial property rights, with minimum pr otection that is broader than that under the 
TRIPS Agreement.  Industrial property protection is also regulated by Andean Community decisions.  
Ecuador participates actively in the work of the TRIPS Council.  The Ecuador ian Intellectual Property 
Institute (IEPI) is eliminating its backlog of app lications for registration and has reduced the usual 
time for registration from two years to three months.  Furthermore, all its archives have been 
digitalized. 
83. In 2009, two Executive Decrees determined that  compulsory licences had to be issued for 
medicines and agricultural chemicals.  Access to medicines used for the treatment of diseases and WT/TPR/M/254 
Page 18  
 
  which constitute public health priorities has been decl ared a matter of public interest so compulsory 
licences may be issued for patents for medicines fo r human use needed for their treatment.  By last 
December, only one compulsory licensing agr eement had been signed for the production of 
a medicine.  Decision 486 of the Common Industrial Property Regime lays down the criteria indicated 
in Article 31 of the TRIPS Agreement so that me mber countries may issue compulsory licences.  In 
June 2010, Ecuador duly informed the TRIPS Coun cil of developments concerning pharmaceutical 
products. 
84. There is a broad legal framework for copyri ght, which is protected by the Intellectual 
Property Law.  Printed and registered works are prot ected, together with computer programs and their 
media.  In order to raise awareness among the po pulation of the importance of protecting copyright 
and trademarks, the authorities have undertaken sev eral information campaigns using publicity, fairs 
and events:  the Ecuador Originals Campaign and th e Ecuador Creates Campaign.  As a result of these 
campaigns, the number of trademark registrati ons rose to over 1,000 in 2010 and there was a 
sevenfold increase in action taken during the review  period.  According to a study by Business 
Software Alliance and International Data Corporation in 2010, Ecuador ranks sixth lowest in rates of 
piracy of computer programs in Latin America. 
85. Turning to trade policies by sector, I shall focus on some services sector aspects.  Beforehand, 
however, I should like to point out that, in view of the importance of food security and self-sufficiency plans, agricultural production should  be in the hands of persons with a business-like 
attitude.  I believe that Ecuador could derive great er benefits from a more proactive tourism policy 
because of its vast natural and cultural resources and diverse climate, especially the promotion of 
ecological tourism.  Likewise, with the large numb er of Ecuadorian immigrants, liberalization of the 
services provided by the telecommunications sector could provide an important impetus for its 
development and generate foreign currency, as h as been the case for my co untry, which also has 
a large number of immigrants. 
86. One other important sector is transport, in which the development of freight in particular calls 
for a vast amount of investment a nd, with the current problems, an investment effort by the private 
sector is needed to meet the la rge demand for freight resulting from the public investment policies and 
the various programmes to promote private investment.  In addition, the development of micro and 
small transport companies should be part of th e income distribution policies promoted by the 
government.  Lending rates are extremely high in real terms, which means that it is necessary to encourage more competition with the entry of new actors and also to find more ways of attracting 
investment.  Naturally, there is a continued need for close government regulation and supervision.  If 
some sectors are willing to pay the high interest ra tes, it is because the profit margins are also large 
and there is little competition in those sectors. 
87. Last, but not least, we should like to highlig ht the Yasuni Initiative, which reflects the 
commitment of the Ecuadorian Government and people  to protecting the environment.  This initiative 
with be implemented without exploiting the 20 per cent of crude oil reserves in Ecuadorian Amazonia 
so as to protect one of the most important areas of biological diversity on the pl anet.  We should like 
to ask the authorities how international organizati ons and other governments have responded to this 
noble gesture of renunciation and great sacrifice in monetary terms.  WT/TPR/M/254 
 Page 19 
 
 
  IV. STATEMENTS BY MEMBERS 
BRAZIL 
 
88. During the period under review, stretching fro m 2005 to the current year, Ecuador has 
pursued efforts to redesign its economic and social  development strategy within new institutional 
arrangements and an entirely new Constitution that  was adopted in 2008.  As indicated in the 
Secretariat report, all those changes have potentially  far-reaching implications for the roles played by 
trade policy and by FDI in Ecuador's development stra tegy, a strategy that is targeted primarily at 
diversifying the economy and making it more socially inclusive. 
89. It is no easy task to implement such a deep programme of institutional reform under normal 
circumstances.  It is even hard er under the current international economic environment, marked by 
a good deal of uncertainty, slow growth, high unemploym ent and the threat of further deterioration in 
some developed areas in which any lasting solution to the sovereign debt crisis remains elusive. 
90. Yet we are pleased to note that Ecuador has mana ged to weather the crisis relatively well.  
The growth rate rebounded to  3.6 per cent in 2010 and is predicte d to reach 5.1 per cent this year.  
Social indicators have also performed well, w ith urban unemployment rates reduced from 9.3 to 
6.1 per cent during the period under review. 
91. Those positive developments  have taken place despite the adverse impact on the 
Ecuadorian economy of a sharp reduction in oil prices.   Oil still accounts for a significant share of the 
country's GDP and exports.  Brazil is also aware th at Ecuador's "dollarized" monetary regime curtails 
key policy space for action and thus imposes additional constraints in responding to external shocks. 
92. We have followed closely the measures adopted  by Ecuador, at the multilateral, regional and 
bilateral levels, to meet the challenges brought by the economic crisis.  We are pleased to note that 
Ecuador has moved from a policy of curbing imports on the basis of safeguard measures to a broader 
programme for the diversification of its economy. 
93. As a consequence of the crisis and of some of  the measures adopted by Ecuador to contain its 
effects, bilateral trade between Brazil and Ecuador declined by 26 per cent in 2009.  Brazil's FDI in 
the country was also affected.  Yet bilateral trade flows increased by 52 per cent in 2010, and 
investment projects are progressively being resumed.  Brazil and Ecuador are now discussing ways to reduce the persistent deficit for Ecuador in its trade balance with Brazil.  From January to 
September 2011, Brazil's imports from Ecuador incr eased 53 per cent, when compared to the same 
period in 2010.  Yet the gap to be overcome is ind eed large.  Brazil's main exports to Ecuador are 
aircraft, mechanical and electrical machinery, iron and steel, plastics, and vehicles.  Ecuador's main 
exports to Brazil are fish and shrimps, suga r, timber, plastic, lead products, and cocoa. 
94. As concerns the ongoing Doha Round, Brazil sh ares with Ecuador the views expressed in the 
Government report that the package of negotiati ng modalities on agriculture and NAMA presented in 
2008 should form the basis for progr ess in the negotiations and that the outcomes in agriculture will 
determine the level of ambition in other negotiating areas.  We also attach special importance to 
a proposal to amend the TRIPS Agreement to require patent applicants to disclose the source of the 
genetic resources and associated traditional knowledg e and to provide eviden ce of compliance with 
prior informed consent and access and benefit-sharing requirements. 
95. In regard to intellectual property, it is worth mentioning that Brazil has posed several 
questions to Ecuador for the purpose of learning how the country's new IP legislation has been 
contributing to prevention of misappropriation of genetic res ources and associated traditional WT/TPR/M/254 
Page 20  
 
  knowledge.  Some other questions aim at clarifyi ng how Ecuador is making use of the exceptions 
contained in the TRIPS Agreement.  All of those questions were answered. 
UNITED STATES 
 
96. The United States is pleased to note that Ecua dor has weathered the recent global economic 
downturn relatively well, as the economy grew by 3. 6 per cent in 2010, and is expected to grow by 
another 5.1 per cent in 2011.  The economy has benefited from higher prices for oil exports and 
a strong rebound in domestic demand, especially pu blic investment in infrastructure projects. 
97. However, the United States is concerned that Ecuador's economy remains vulnerable to future 
external shocks due to its over-dependence on oil ex port revenues and expatriate s' remittances.  While 
we recognize that Ecuador's monetary regime, wh ich includes "dollarization", has contributed to 
relatively low inflation rates, it has limited Ecua dor's macroeconomic policy options in responding to 
such shocks.  Ecuador's fiscal deficit increased to 5.1 per cent of GDP in 2009, largely due to the drop 
in revenues from oil exports, and increased public spending, which caused a saving-investment gap in 
Ecuador's current account.  The Government resp onded by imposing quantitative restrictions and 
a tariff surcharge on a large number of imported pr oducts, which resulted in an excess of Ecuador's 
bound tariff rates from January 2009 to July 2010. 
98. The United States is also concerned that, si nce 2009, FDI inflows to Ecuador have dropped 
considerably, mainly due to new economic and trade development goals based on the 
2008 Constitution.  Foreign investment may not only have helped Ecuador brid ge its national savings 
and gross domestic investment gap in 2009 and 2010,  but investment also helps to disseminate 
know-how and new technology, which is the main source of long-term produc tivity growth, and helps 
increase competitiveness.  Ecuador generally ranks  poorly in global comparisons of economic 
competitiveness.  Indeed, the World Economic Foru m's Global Competitiveness Index rated Ecuador 
105
th out of 139 countries for 2010-2011. 
99. Although Ecuador has proceeded with reforms of  tariff and non-tariff measures since its TPR 
in 2005, regrettably it still clings to its inwa rd-looking approach, placing increased emphasis on the 
use of these and other measures to implement, as the Secretariat says, "its  endogenous economic and 
social development strategy in accordance with new priorities, including import substitution in certain 
sectors".  A lack of transparency in Ecuador's le gal framework has also caused concern for foreign 
investors.  Even though Ecuador has passed new le gislation in several trade and trade-related areas 
since 2008 no comprehensive regulatory reform has been undertaken to simplify the existing legal 
framework.  For example, in its report, Ecuador say s it will discourage imports that adversely affect 
national production, the population, and nature, bu t does not explain how "adverse effect" is defined 
or determined.  This uncertainty in many aspects of Ecuador's trade policy contributes greatly to the 
difficulties of firms, particularly small- and medium -sized enterprises (SMEs), trying to invest in and 
trade with Ecuador.  This negatively impacts Ecua dor's ability to compete.  We ask Ecuador to 
explain this process more fully in light of its WTO obligations as Ecuador has, in the past, restricted 
imports on some commodities with the explic it goal of protecting domestic producers. 
100. Furthermore, while Ecuador has tried to provi de updated WTO notifications, a number of 
them remain outstanding.  Specifically, Ecuador has failed to adequately submit the AVEs for over 
300 tariff lines or the methodology and calculations u sed to calculate the AVE.  We are concerned 
that Ecuador believes the AVE on these tariff lines to be 30 per cent, which, when applied to items 
worth US$29 or less under the mixed tariff scheme fo r footwear and all textile and apparel items, 
would be charged a duty higher than 30 per cent of th e value of the goods.  Ecuador has not replied to 
Members' questions contained in doc ument G/C/W/639 addressing the reasons why Ecuador modified 
its tariffs on these items.  We reiterate our re quest that Ecuador please provide the reasons why it 
modified its tariffs on the over 300 tariff lines covered by Presidential Decrees 367 and 372.  WT/TPR/M/254 
 Page 21 
 
 
  101. The Secretariat report also points out that, while Ecuador's average applied MFN tariff rate 
dropped from 11.4 per cent in 2005 to 9.3 per cent in 2011, the average MFN tariff for agricultural products rose from 16.7 per cent to 19.6 per cent during the same time period, and is among the 
highest in the region.  Furthermore, 19 ten-digit lines exceed the bound rates by 5 to 15 percentage 
points;  and, the use of compound rates on items bound on an ad valorem  basis, and Ecuador's 
non-submission of their AVEs casts doubt, as the Secretariat says, "on whether these rates are within 
their binding levels". 
102. Ecuador has also failed to notify the WTO of new import licensing procedures and 
SPS standards for imports, among others.  It is not clear why Ecuador applies different standards to 
Andean Community members and third countries.  In the spirit of transparency , we are interested to 
know when Ecuador will notify each of the outstandi ng practices identified in the Secretariat report 
for this TPR, including those required by the TB T, SPS and TRIPS Agreem ents, and how Ecuador 
will ensure that the timely notification of future regulations is accomplished. 
103. With regard to TRIPS, the Secretariat says that the 2008 Constitution prohibits the 
appropriation of ancestral (otherwise, traditional) kno wledge on biodiversity.  We would ask Ecuador 
to explain this exclusion in light of TRIPS Article  27, which requires patents to be made available 
without discrimination in the field of technology.   In addition, the Ecuadorian IP law extends 
protection to geographical indications.  However, it is unclear whether the law provides the legal 
means for interested parties to prevent the use of  misleading geographical indications, in light of 
Article 22 of the TRIPS Agreement.  Adequate and e ffective protection of intellectual property, in our 
view, is a critical factor in the pursuit of fosteri ng investment and enhancing innovation and creativity.  
We hope that Ecuador will reconsider these restrict ions and take the necessary steps to ensure their 
consistency with the WTO. 
104. The United States is also concerned about th e effective enforcement of IPRs.  Although 
Ecuador has a relatively comprehensive legal framewo rk, it is unclear whether a criminal ex officio 
authority exists to initiate legal or administrative cl aims on behalf of IPR holders.  We ask Ecuador to 
confirm whether an ex officio authority exists.  In addition, we ask Ecuador to explain why it is 
difficult for courts to ensure compliance with their orders regarding IPRs. 
105. Finally, the Secretariat reports that criminal penalties and fines for copy right infringement are 
low, and that Ecuador indicated that they are bei ng revised.  We look forward to an update on what, if 
any, other amendments Ecuador is ma king to its intellectual property laws. 
MEXICO 
 
106. In the course of this meeting, the difficult s ituation faced by Ecuador, particularly in 2009 
when its GDP grew by only 0.4 per cent, has been mentioned several times.  Reference has also been 
made to the problem which the dollarization of the Ecuadorian economy poses in terms of 
implementing macroeconomic policies, especially moneta ry and exchange rate policies.  At the same 
time, however, it is clear that it has functioned ve ry well as far as curbing inflation in Ecuador is 
concerned.  To overcome the crisis, Ecuador had to make use of fiscal policy.  Quite obviously, 
government spending policies were needed for grow th, even though it was barely 0.4 per cent, but 
were also necessary to prevent any deterioration in the Ecuadorian popula tion's living standards. 
107. Fiscal policies were also affected by the fall in  oil prices, which represent 20 to 30 per cent of 
Ecuador's tax revenue, depending on the year.  At th e same time, subsidies were given in various 
areas of the economy, in the case of energy in particular, which made the implementation of the 
Ecuadorian Government's fiscal policies even more complicated. WT/TPR/M/254 
Page 22  
 
  108. The deterioration in the fiscal deficit was refl ected in Ecuador's current account deficit, which 
went from an appreciable surplus to a three per cent deficit.  The latter was tackled largely through an 
increase in import restrictions, notably through the application of safeguard measures, which were 
abolished in 2010.  Other types of trade measures remain, however, and are used as a way of dealing 
with the country's macroeconomic problems.  Tr ade measures are not necessarily the best way of 
tackling macroeconomic problems, in fact trade polic ies are generally extremely ineffective for this 
purpose because they also cause considerable distortions  in the domestic market, hence in trade, and 
ensure that domestic production incentives go from sector s that could be efficient to others that could 
be less efficient.  Ecuador has clearly made a subs tantial reduction in its average tariff, especially on 
industrial goods, but at the same time what Ecua dor has done is to raise tariffs on agricultural 
products, which has meant an increase in the effective protection given to a large number of 
agricultural products. 
109. I should like to welcome the trade facilitation measures recently introduced by Ecuador.  
These have not only made it possible to increase import s but, above all, have made Ecuador's exports 
more efficient, especially non-traditional export product s.  Mention should also be made of the efforts 
being made in relation to governme nt procurement.  This involves making State-controlled enterprises 
subject to stricter and more transparent rules, ev en though measures could still be introduced to make 
government procurement even more transparent and si mpler.  One important factor is the introduction 
of the opportunity to bid online, which has been ve ry advantageous to those suppliers selling to the 
Ecuadorian Government. 
110. It has also been mentioned that Ecuadorian companies continue to be one of the least 
competitive at the global level.  In 2010, Ecuador  ranked 105 out of the 139 countries studied by the 
World Economic Forum.  Nevertheless, it has been ab le to lower the levels of poverty and inequality, 
even though strenuous efforts are still needed.  Vice-Minister Rivadeneira has told us how the 
Gini coefficient of unequal income distribution has b een lowered, even though it is still very high, as 
in many other countries in the region.  In 2005, Ecuador was 89
th out of 177 countries whose social 
programmes and ranking in the hum an development index were examined, but in 2009 it had 
improved its position, moving to 77th place out of the 169 countries examined by UNDP.  It has also 
managed to reduce the inequa lity index in urban areas. 
111. Another task facing Ecuador is to reinforce its  competition policy.  This requires a domestic 
policy to prohibit and penalize anti-competitive practi ces and to regulate mergers.  It is essential to 
have an independent body to apply such regulations.  The Secret ariat report indicates that in July 2011 
a draft Law on Control of Market Power, which provides for the establishment of an autonomous 
institution, was about to be sent to the National Assembly.  We should like to know whether Ecuador 
could tell us about the progress made in this respect. 
112. I have already mentioned that Ecuador consid erably reduced its average MFN tariff, from 
11.4 per cent in 2005 to 9.2 per cent.  Nevertheless, it should be mentioned that there is still a lot of 
leeway in the system.  Ecuador's bound rate is 21 per cent.  At the same time, the applied tariff in the 
agricultural sector is extremely high, having risen  from 16.7 per cent to 19.6 per cent, with high 
ad valorem  rates applied to various agricultural pr oducts such as rice and meat offal. 
113. Although the manufacturing sector plays a relativel y modest role in the economy (9.3 per cent 
of GDP) and in merchandise exports (8.5 per cent) , Ecuador is making strenuous efforts to be in 
a position to increase exports of manufactures.  By giving considerably more effective protection to 
various exportable products, however, what it has done is also to increase the bias against exports of 
these products.  WT/TPR/M/254 
 Page 23 
 
 
  114. Lastly, in regard to trade, I should like to mention that Ecuador has made few commitments 
since its accession to the WTO in terms of services.   It has only made some commitments in the 
40 subsectors in the Sectoral Classification List. 
115. I shall not speak about our bilateral relations , even though they are important and have 
expanded rapidly;  what is important in these rela tions is the systemic aspect.  The Partial Scope 
Agreement under the LAIA between Ecuador and Mexico is the systemic aspect that is being 
intensified at the present time.  The concessions we  have granted mutually have enabled bilateral 
trade to increase fourfold in ten years, in othe r words, by an annual average of 15 per cent. 
COSTA RICA 
 116. My delegation is happy to  participate in the trade policy review of Ecuador.  Our closeness to 
Ecuador goes much further than the mere geographical situation or the fact that our missions are in the 
same building.  Ecuador has been very close to Co sta Rica in the WTO.  We appreciate in particular 
the joint work in recent years on issues such as bananas and in the Negotiating Group on Tropical 
Products, and we welcome Ecuador's  constructive position and commit ment with regard to these 
issues. 
117. In connection with this review, we welcom e the Ecuadorian economy's renewed growth in 
recent years, the drop in unemployment, and the improvement in human development, as well as the reduction in income inequality.  We  also acknowledge the efforts made by Ecuador to increase public 
investment in important areas such as the infrastruct ure, health, education and social welfare.  Its 
efforts in regard to trade facilitation, for exampl e, computerization of the customs and risk-based 
assessment, are also positive.  We believe that th is positive performance would be reinforced by 
a stable, predictable, and transp arent legal framework for trade. 
118. My delegation would like to draw attention to thr ee issues that appear to us to be particularly 
important.  Firstly, we note that one of the challe nges facing Ecuador continues to be diversification 
of its markets and export products to enable it to lessen its dependence on oil and other commodities.  
Another challenge is the transition from a unilatera l trade preference-based scheme with its two major 
partners, the European Union and the United Stat es, to trade relations based on international 
commitments that provide legal security and incr ease opportunities for access, with mutual rights and 
obligations.  My delegation would like to have furthe r details on the efforts made by Ecuador in this 
direction. 
119. The Secretariat report highlights Ecuador's irregul ar compliance with notification obligations.  
We would be interested to know what measures Ec uador has taken to regularize this situation and 
bring its notifications up to date. 
120. In another area, we see that although Ecuador bound 100 per cent of its ad valorem  tariffs in 
the WTO, it has introduced compound and specific MFN tariffs on 356 products.  Costa Rica would like have some more information on this mechanism, and on the meas ures taken by Ecuador to ensure 
that these compound duties do not exceed the tariff bound in the WTO. 
CHILE 
 
121. Over the past 30 years, Chile has based its trade policy on opening up to international 
markets.  We have to recognize, however, that ther e are other visions of how to achieve development, 
as is the case for Ecuador.  In 2008, Ecuador in troduced its new Constitution, which redefines its 
social and economic development strategy on  the basis of the principle of equity. WT/TPR/M/254 
Page 24  
 
  122. Ecuador's economy reacted relatively well to the gl obal economic crisis that emerged in 2008.  
Indeed, in 2010, economic growth was 3.6 per cent and is expected to be 5.1 per cent in 2011.  
Unemployment has also remained fairly low.  The factors underlying this performance are, 
essentially, high international prices for oil and the ma rked recovery in domestic demand, particularly, 
public investment in infrastructure projects.  Ne vertheless, the major challenge facing Ecuador's 
economy in the future continues to be to raise its productivity levels. 
123. Since the previous review, Ecuador has considerab ly reformed its customs tariff, with average 
MFN tariffs falling from 11.4 per cent in 2005 to 9.3 per cent in 2011. 
124. Likewise, Ecuador has adopted a new Organic Code of Production, Trade and Investment.  
This instrument determines the new legal framework applicable, inter alia , to FDI.  One of the key 
changes is that concerning State participation in so-ca lled "strategic sectors".  Chile is a large investor 
in Ecuador and so we are interested in knowing mo re about the effects of this new legislation on 
existing and future investments in Ecuador.  Legal certainty is, without any doubt, a value in itself. 
125. Ecuador is one of Chile's preferential partners .  Bilateral economic relations are covered by 
our Economic Complementarity Agreement No. 65, signed in 2008 and in force since 2010, which 
replaced the Agreement in force from 1994 onwards.  Its results are self-evident, today more than 
96 per cent of bilateral trade in goods is duty free. 
COLOMBIA 
 
126. With regard to the macroeconomic situation, th e Secretariat report indicates that during the 
review period:  (1) despite its vulnerability as a dollarized economy, Ecuador managed to face up 
positively to the 2008 global economic crisis.  The notable recovery in GDP growth from 0.4 per cent 
in 2009 to 3.6 per cent in 2010 is proof  of this and the rate is expected  to reach 5.1 per cent by the end 
of this year;  (2) the recovery in economic gr owth was underpinned by the increase in domestic 
demand, especially public investment in infrastruct ure projects and social welfare, which made it 
possible to deal with negative factors such as the sharp fall in the price and volume of oil exports;  
(3) the increase in public investment in social pr ogrammes has helped to improve Ecuador's human 
development performance, and this has reduced in come inequality, with fewer families living below 
the poverty threshold and less unemployment;  (4) ther e has been a decrease in Ecuador's flow of 
foreign investment, which fell from a maximum of US$1 billion in 2008 to US$319 million in 2009, 
and US$167 million in 2010.  The cha llenge now is to be able to obtain enough resources to remedy 
the deficit in investment in infrastructure and social  welfare and so remain on the path to sustainable 
growth;  (5) for several years, Ecuador has been implementing an economic and social development 
strategy whose aim is to diversify the economy, promoting selective import substitution, investment 
and production of goods with higher value added.  This  raises an interesting ch allenge of how to meet 
economic and social objectives and implement domestic  policies that continue to comply with the 
commitments to the multilateral trading system. 
127. Regarding trends in Ecuador's trade policy, we  see several important developments mentioned 
in the Secretariat report:  (1) with regard to trade facilitation, efforts have been made to computerize 
customs clearance, together with other modernization efforts;  (2) the legislation to protect IPRs has 
been reinforced in the 2008 Constitution, particular ly as regards traditional knowledge and biological 
diversity.  Registration procedures and enforcement measures have also been improved;  (3) Ecuador 
has made efforts to submit notifications to the WT O in various areas and there have been noticeable 
improvements since the previous trade policy review .  Nevertheless, several are still outstanding and 
this is one factor that makes it difficult to unders tand fully the programmes and measures applied by 
Ecuador, as well as compliance with the commitments undertaken.  WT/TPR/M/254 
 Page 25 
 
 
  128. As to relations between Colombia and Ecua dor, 2010 marked a record as far as trade is 
concerned, with total trade amounting to US$2,640 million.  The special feature of trade relations 
between Colombia and Ecuador is the complementarity and diversity of trade, which is covered by the 
Andean Community regional integration scheme, in existence for over 40 years.  Goods with high 
value added imported by Colombia account for 39 per cent of the total, for example, automobile 
industry products, agro-industrial, engineering, a nd chemical products, clothing and footwear.  In 
turn, Colombia mainly supplies Ecuador with raw ma terials, accounting for 54 per cent of total trade, 
for example, electricity, basic chemicals and petrol eum by-products.  It also exports consumer goods, 
30 per cent of the total, in the form of autom obile industry products, machinery and equipment, 
inter alia . 
129. Although the figures for trade in goods are in Colombia's favour, there is a balance when one 
takes into consideration bilateral flows of inv estment and tourism, which shows how close the 
two economies are.  As an illustration, the cumula tive amount of Colombian FDI in Ecuador between 
1994 and 2010 was estimated to be US$322 million.  In December 2010, 2,184 Colombian firms had 
investments in Ecuador and 2,964 Colombian nationals were working in firms established in Ecuador.  
The balance in the large amount of investments shows a surplus of US$139 million in favour of 
Ecuador. 
130. In 2010, there was a 23 per cent increase in the number of Colombian tourists visiting 
Ecuador.  The tourism balance is largely in Ecua dor's favour, with over 100,0 00 visitors each year.  
Taking into account the three elements, bilateral rela tions are fairly balanced and we have worked 
together both at the bilateral and regional levels to  develop the three dimensions so that they can 
become even more positive. 
131. Lastly, the words of President Rafael Correa should be recalled when he wrote:  "The 
phenomenon called the market is indisputable and irrefutable, but we want national and global 
societies as well as the market, in other words, gove rning the market to achieve socially desirable 
objectives".  These words remind us of the importanc e of development as the nucleus for the WTO's 
work so that progress in trade results in the end in  an improvement in the well-being of our peoples. 
EUROPEAN UNION 
 
132. Ecuador's second trade policy review gives us an opportunity to collectively discuss 
developments in Ecuador's trade po licies and practices since 2005, when its first TPR was held.  Since 
then, many political and institutional changes have taken place in Ecuador:  after several years of 
political instability, Ecuador embarked on a process of democratic consolidation combined with social 
and economic change. 
133. Ecuador is an important partner in Latin Amer ica for the EU.  The EU is the second trading 
partner for Ecuador and provides Ecuador preferen tial access to its market under the GSP + system.  
In addition, we hope that Ecuador will soon be in  a position to join Colombia and Peru in a trade 
agreement with the EU, which aims to provide for progressive and reciprocal liberalization by means 
of an ambitious, comprehensive and balanced trade area. 
134. The EU and Ecuador have also a long track record as partners implementing development 
cooperation programmes.  Thanks  to Ecuador's very good econom ic performance, we will be 
exploring together additional kinds of cooperation th at are suited to our mature partnership, focusing 
notably on the benefits of increased trade and inv estment for this upper middle income country.  The 
EU's trade-related support is aime d at helping Ecuador to benefit fully from its trade advantages and 
thus to work towards the eradication of poverty.  Consistent with Ecuador 's government policy, our 
support is directed mainly to the promotion of sustainable economic opportunities, including the development of SMEs. WT/TPR/M/254 
Page 26  
 
  135. As mentioned, Ecuador has seen many cha nges since its previous trade policy review, 
including in its economic and institutional framewo rk.  This has had an impact on its trade and 
investment policies and practices. 
136. At the time of its first TPR, Ecuador was encour aged to continue effort s to strengthen its legal 
and institutional framework, as a basis for stable an d sustainable economic growth and in order to 
increase its attractiveness as an investment des tination.  Based on the reports presented for this 
review, we see that certain changes in Ecuador's le gislation, including on structural policies, have had 
a negative impact on the investment environment.   The 2008 Constitution and 2010 Organic Code of 
Production, Trade and Investment have  made foreign investment subject to certain strict requirements, 
and have introduced "strategic sectors", where the Government has exclusive rights.  Also, based on 
these aforementioned legislative changes, we see that  Ecuador is envisaging greater State involvement 
in its economy. 
137. All this has led to the decrease of predictabilit y and legal certainty for foreign investors.  
Recent steps by Ecuador to terminate some bilatera l investment protection agreements have raised 
additional concerns.  We have pr esented detailed questions in our advance written submission, asking 
Ecuador to provide clarifications on how it intends to secure the prot ection of international investors 
now and in the future. 
138. Another issue we would like to raise today is related to the recent increase in tariffs for 
imported vehicles, which, combined with the IC E discrimination and with benefits for locally 
assembled vehicles is seen as effective import discrimination.  The EU has also raised Ecuador's use of compound duties with other countries in the Counc il for Trade in Goods, asking Ecuador to clarify 
the use of such tariffs and provide us with AVEs. 
139. Also the persistence of some non-tariff barri ers remains a problem.  Ecuador's new import 
licensing regime covers an extensive number of  products and various bodies are involved in the 
approval process.  We call on Ecuador to ensure that its import lic ensing regime is in full compliance 
with its WTO commitments in this area.  As regards standards, including SPS standards, we 
encourage Ecuador to increase the percentage of international standards adopted (without 
modifications as Ecuadorian technical standards) in order to facilitate international trade. 
140. A sector affected by both tariff and non-tariff ba rriers is the tiles sector.  Technical regulation 
for the import of tiles is very unstable, having an adverse effect on imports.  Since 2007, Ecuador has issued about 15 technical and tariff decisions that affect the import of tiles.  Transparency still remains a challenge to be addressed, including in relation to  WTO notifications.  We note, however, that, 
according to the Secretariat report, action has been taken to improve and institutionalize transparency, 
reducing the scope for administrative discretion. 
141. Mainstreaming trade into national development strategies is a very important element of 
sustainable development.  We welcome the compre hensive National Development Plan and note that 
its current version, in addition to socio-economic ma tters, also deals with many trade-related aspects, 
including with the crucial issue of increasing total f actor productivity and export  diversification.  We 
note, however, that Ecuador is usi ng import and export restriction policies in pursuit of the objectives 
of its National Development Plan and we strongl y call on Ecuador to eliminate the use of these 
protectionist measures.  We acknowledge and we lcome efforts made by Ecuador to streamline 
customs procedures and the elimination of the preshipment inspection regime.  The modernized and computerized customs clearance will sure ly benefit further trade facilitation. 
142. On competition legislation, the EU is happy to learn that a national competition law has 
recently been approved.  We also read with inte rest about the legislative and institutional changes 
Ecuador has undertaken in government procurement.  In this regard, however, we would like to urge  WT/TPR/M/254 
 Page 27 
 
 
  Ecuador to introduce further transparency and openness in bidding procedures, thus facilitating 
foreign participation.  In this respect - and in th e interest of Ecuador's fu rther economic development - 
we would again encourage Ecuador to join the Pl urilateral Agreement on Government Procurement. 
143. Trade is an important and efficient instrument for advancing economic a nd social prosperity.  
I would like once again to encourage Ecuador to con tinue with ongoing structural reforms, keeping in 
mind the objectives set for sustainabl e and socially inclusive growth. 
PARAGUAY 
 
144. Relations between Paraguay and Ecuador  are essentially governed by Economic 
Complementarity Agreement No. 59, concluded within  the LAIA framework.  In 2011, there was new 
impetus in trade relations between  the two countries.  Paraguay a nd Ecuador signed an agreement on 
security, trade and training during the first half of the year.  Paraguay's Investment and Export Network drew up a detailed report on products that could be of inter est to both countries.  We are 
certain that in the months to come, we sha ll pursue this trend and will increase our trade. 
145. With regard to the Secretariat report, several  points drew our attention, for example, the 
reform of trade sectors under way in recent years, the improvement in terms of human development, 
the number of hydroelectric projects being implemente d and the creation of strategic sectors.  With 
regard to the latter point, we should like to have further details on the meas ures adopted to promote 
such sectors. 
146. Lastly, we underline the ongoing work and effo rts of Ecuador's Permanent Mission, which 
plays an active role in the Doha Round negotiatio ns and collaborates in the WTO's day-to-day work, 
making interesting proposals in several spheres, t hus demonstrating its commitment to the multilateral 
trading system. 
JAPAN 
 
147. I would like to start with Ecuador's macr oeconomic environment and policies.  Japan 
welcomes the rebound in Ecuador's growth in 20 10 after its decrease in 2009.  However, the 
Secretariat report points out that its economy is  dependent on oil revenue in GDP, trade and 
government revenue, and that this makes it vulne rable to external commodity price and demand 
changes.  Therefore, as the Government of Ecuador  duly recognizes, diversification of its economy is 
key for its further development, and Japan hopes that Ecuador will achieve this by promoting 
investment in various sectors. 
148. Having said that, Japan has concerns regarding Ec uador's policy measures to achieve this aim.  
The Secretariat report shows that Ecuador is relying on State-owned enterprises and measures in favour of domestic products and services as policy measures.  This could discourage trade and 
investment. 
149. I would like to touch upon some of these measur es in relation to Ecuador's sectoral policies.  
With regard to trade- and investment-related policies, firstly, Japan has a concern about the 
predictability of Ecuador's tax and regulatory regime.  Japan has learned that there have been quite 
frequent changes in this regime.  For example, va rious taxes, such as the ICE, overseas remittances 
and tariffs, have been changed nine times during the l ast four years.  In the automobile sector, it is 
noted that the tax regime and regulatory scheme ha ve been changed 12 times during the same period.  
Such frequent changes make it difficult for privat e enterprises to develop their mid- to long-term 
business plans and discourage investment.  Japan urg es Ecuador to bring predic tability and stability to 
the tax and regulatory regime in order to make its business environment more attractive. WT/TPR/M/254 
Page 28  
 
  150. The issue of predictability also relates to my second point, the change of the import licensing 
regime introduced this August.  Although Japan understands the importance of its objective of 
ensuring consumer protection, we have heard from enterprises operating in Ecuador that this change 
entailed great disparity in the periods required to issu e the licence.  This lack of predictability has led 
to a delay in shipments and, in more severe cas es, their cancellation.  Japan encourages Ecuador to 
stabilize its implementation and improve predic tability for overseas exporters to Ecuador. 
151. Thirdly, Japan notes in the description of VAT  in the Secretariat report that some 
domestically produced products are zero-rated for VAT purposes, whereas imported products are not.  Japan would like to have more details about the curr ent status, and if it is not corrected, Japan urges 
Ecuador to correct the VAT promptly in accordance with Article III.2 of the GATT. 
152. Fourthly, as the Secretariat report points out, as the AVEs for items subject to compound rates 
are not available, it remains unclear whether these ra tes are under their binding rates.  Japan reiterates 
its request made several times in the Council for Trade in Goods to submit AVEs and their 
calculations to the WTO. 
153. With regard to sectoral policies, Japan notes the importance of the services sector, which 
accounts for more than half of Ecuador's ec onomy.  Despite its importance and openness, 
commitment in the services sector is relatively limite d.  Japan believes that further commitment would 
enhance the predictability of Ecuador's polic y and thus help to attract investment. 
154. Maritime services are one of the important sectors which have an influence on trade, given 
that about 80 per cent of international trade is  carried by ship.  However, according to the 
Secretariat report, transport of hydrocarbons is reserved for a national shipping company.  Japan 
hopes that this area will be liber alized to further facilitate trad e of Ecuador's important natural 
resources.  In conclusion, Japan would like to re iterate its hope that Ecuador will diversify its 
economy by promoting investment, and facilitate bus iness by providing predictability in its policy. 
CANADA 
 155. Economic and trade relations between Canada and Ecuador are extremely positive.  In 2010, 
bilateral trade in goods between our two count ries amounted to C$483 million.  The two economies 
complement each other and offer real potential for growth of bilateral trade.  Relations between 
Canada and Ecuador are made stronger by Canada's  increased presence in Ecuador's mining sector.  
Canadian companies are increasingly taking advant age of the economic opportunities afforded and 
have large assets in the mining sector. 
156. Canada and Ecuador share a common view with respect to the importance that development 
tools such as the Aid-for-Trade (AfT) agenda can  play in strengthening domestic competitiveness.  
Canada contributes to the Inter-American Developm ent Bank - Aid for Trade Strategic Fund, which 
was instituted in 2009 to help countries in the Americas benefit from liberalized trade and increased 
market access by using grant resources to overcom e supply-side constraints.  Bilaterally, Canada 
delivers democratic governance support programmi ng through the Andean Unit for Democratic 
Governance. 
157. Canada would like to take this opportunity to  congratulate the Ecuadorian Government on the 
importance it has attached to achieving its econom ic development objectives and the rigour with 
which it is implementing its vision for prosperity, which embraces trade as a tool for development, for eradicating poverty and for reducing inequalities.  Based on a new Constitution approved by the 
Ecuadorian people in 2008, Ecua dor's national economic development plan, also known as the 
National Plan for Good Living, has led to major political, social, institutional and economic changes 
in the country.  Canada believes that bilateral and regional trade initiatives complement and support  WT/TPR/M/254 
 Page 29 
 
 
  multilateral trade liberalization efforts - these approa ches are not mutually excl usive.  Consequently, 
we are pleased to see that Ecuador is interested in negotiating framework agreements for bilateral 
trade negotiations with various countries outside the region. 
158. The Secretariat report highlights a number of positive developments related to Ecuador's 
efforts to reform its economy, including the effort s to improve and institutionalize transparency, and 
to fight corruption, a concern and a challenge in Ecuador. 
159. We note that Ecuador's economy enjoyed sustai ned growth during most of the period under 
review, thanks largely to oil revenues, a vita l sector of Ecuador's economy, as well as through 
increased exports of primarily agricultural expor ts.  Also during the period under review, 2005 
to 2010, the Secretariat report notes that urban unemployment fell from 9.3 to 6.1 per cent, human 
development improved, as did the index of income in equality.  This is even more impressive against 
the backdrop of the formidable challenges fa ced by the Ecuadorian economy during the global 
economic downturn - challenges which Ecuador  was able to expeditiously overcome. 
160. While Canada applauds Ecuador for its ongoing efforts, there are areas of Ecuador's trade 
policy where Canada has some concerns and believ es that improvements can be made.  Despite some 
improvements since its last TPR, Ecuador's WTO notification record  has been characterized by 
irregular submissions or long periods  without submission in several areas;  we encourage Ecuador to 
improve its notifications with the technical support of the WTO Secretariat. 
161. As highlighted in the Secretariat report, further progress can be made in the area of FDI.  
Since 2009, FDI inflows have dropped considerably , mainly as a result of the increasingly uncertain 
investment climate owing to major policy and cons titutional changes.  A wide ranging Organic Code 
of Production, Trade and Investment, passed in 20 10, streamlined the legal framework governing, 
inter alia , FDI, which now provides for national treat ment for foreign investors under certain 
conditions.  However, Canada rema ins concerned about the stated intent of Ecuador to denounce its 
existing bilateral investment treaties, including one with Canada.  The Organi c Code of Production, as 
a domestic law, complements but cannot provide the sa me assurances as an international treaty.  The 
resulting uncertainty increases the potential risks and costs of doing business in Ecuador.  Continuing 
to streamline business creation, investment, and customs clearance procedures and reducing bureaucratic demarches for business activities and indus tries should remain a priority for attracting 
foreign investment. 
162. Canada also notes that several articles of th e 2008 Constitution restrict competition by 
favouring State control or intervention in strategi c activities, thereby reversing past privatization 
efforts.  As a result, State involvement in th e production and trade of certain goods and services 
remains significant and in certain areas (e.g. pharm aceuticals) is being strengthened, which affects 
foreign investment. 
PERU 
 163. My country is particularly interested in today' s review of the trade policy of a friendly country 
such as Ecuador.  We share a common past as we we re both part of the Inca Empire and, with the 
passing of time, the close neighbourly relations ha ve resulted in growing trade between our peoples 
since we both became republics.  Our bilateral re lations are excellent, reflecting the substantive 
progress made in various areas, including cross-borde r integration and develo pment, cooperation, 
security and mutual trust, as well as the promotion of trade and investment, with the shared objective 
of both Governments to promote socially inclusive sustainable development. 
164. Our trade relations are based on the Andean Co mmunity integration scheme.  Over the past 
decade, we have seen a substantial increase in bilatera l trade of around 600 per cent.  In 2010, for the WT/TPR/M/254 
Page 30  
 
  tenth consecutive year, Peru was the second largest market for Ecuador's exports, its leading trading 
partner in the Andean Community and the second at the global level.  That year, bilateral trade 
amounted to US$2,208 million, with Peruvian  exports for a value of US$814 million and 
US$1,393 million of imports, giving a negative balan ce for Peru and a favourable one for Ecuador of 
around US$579 million. 
165. Peru's main exports to Ecuador are:  propa ne and butane gas, refined copper cathodes and 
wire, zinc, lubricating oil, and paper.  Ecuador's principal exports are:  crude petroleum oil, canned 
fish, wood panels, cookers, refri gerators, medicines and gold. 
166. As far as investment is concerned, links are also becoming even closer.  In 2010, 
Ecuadorian investment in Peru amounted to US$87 million according to the records of the 
Peruvian agency Proinversión, and went mainly to the construction and trade sectors.  In turn, 
according to the Central Bank of Ecuador, Peruvi an investment amounted to US$32 million and was 
principally in industry, trade, chemicals, cosmeti cs and logistical services.  The framework for these 
undertakings is the Bilateral Agreement on the Promo tion and Protection of Investment, in force since 
1999. 
167. For the foregoing reasons, this review is of pa rticular importance for my country.  It enables 
us to analyse and assess progress and achievements si nce the previous review, for example:  the 
recovery and growth of GDP at 3.6 per cent in  2010, with a very positive growth forecast of 
5.1 per cent for this year.  We can also a ppreciate the significant progress made in human 
development, in particular, the decrease in the pove rty rate from 37.6 per cent in 2006 to 32.8 per cent 
in 2010, as well as the inequality index.  The pr ogress made in trade facilitation and modernizing 
customs clearance, the reduction in the applied average MFN tariffs from 11.4 per cent in 2005 to 
9.3 per cent in 2011 are also highlights for my country. 
168. On the other hand, Ecuador's economy is rela tively open, dollarized and highly dependent on 
oil revenue, which raises daunting challenges for its development, as became even more obvious 
during the recent global economic crisis.  To over come this, Ecuador has undertaken structural 
reforms and constitutional changes to redefine its ec onomic and social development strategy with the 
aim of diversifying its economy, products a nd markets and enhancing its productivity and 
competitiveness.  We should like to receive furthe r details on the policy changes relating to FDI. 
169. Our countries share a number of interests and common positions at the international level and 
in the regional integration processes.  We be long to the Andean Community, UNASUR, LAIA and 
the Latin American Paci fic Arc.  At the WTO and in the Doha Round negotiations, our countries 
participate in the Agriculture G-20 and the Negotia ting Group on Tropical Products, and in May 2010, 
together with Ecuador, we signed the Geneva Agre ement on Trade in Bananas, alongside a group of 
Latin American countries and the EU .  We are also co-sponsors with Ecuador of the draft decision on 
a mutually supportive relationship between the TR IPS Agreement and the Convention on Biological 
Diversity submitted last April.  We belong to the "Friends of Fish" Group and at the beginning of the 
year jointly submitted a proposal on fishing subsidies in order to foster the development of sustainable 
small-scale fishing. 
BOLIVARIAN REPUBLIC OF VENEZUELA 
 
170. We acknowledge and welcome th e important political, social , institutional and economic 
changes that have occurred in Ecuador over the re view period.  These commenced with the approval 
of a new Constitution by the Ecuadorian people in 2008, launching a new development model, 
notably in the economic and trade sphere but also  having a positive impact on the social sphere, and 
giving rise to a new vision that sees trade as a tool for development and promotes social inclusion, the  WT/TPR/M/254 
 Page 31 
 
 
  fight against poverty and the reduction of inequa lities.  We welcome and endorse these very positive 
changes for Ecuador. 
171. In implementing this new model we note with sa tisfaction the results that are already obvious 
in Ecuador, for example, the lower unemployment ra te and better quality jobs in the major branches 
of economic activity, which also helped to ensure  economic growth of 3.58 per cent in 2010.  We 
view extremely positively the fact that, over the re view period, urban unemployment fell from 9.3 to 
6.1 per cent. 
172. As an oil-producing country that is also striving to diversify its economy, Venezuela 
recognizes the strenuous efforts made by Ecuador to transform its production matrix and at the same 
time to make it more socially inclusive, which ha ve led to increases in non-petroleum value added and 
an improvement in the population's income levels .  Ecuador's economy has not been immune from, 
and continues to be vulnerable to, external uph eavals such as the current global economic and 
financial crisis that began in 2008 and has affect ed growth of this small and vulnerable economy. 
173. Ecuador is a clear example of the important role played by remittances in the economy as 
private sources that contribute towards development of small-scale activities and family businesses.  
We view with concern the fact that the current cr isis has resulted in a sh arp fall in remittances by 
immigrants, the second largest source of foreign exchange for this Member. 
174. Ecuador has, however, emerged well from the cris is and growth has recovered in the past 
two years, particularly through the marked rise in do mestic demand as a result of public investment in 
infrastructure projects, showing that it is possible to do so without sacrificing investment in the social 
sphere, which is the guarantee of a peaceful future in which such growth can continue.  In this 
connection, we acknowledge the large-scale public i nvestment being promoted by President Correa, 
focusing on strategic infrastructure projects, health, e ducation and social welfare, in order to remedy 
the lack of investment that a ffected these areas for a long time and which will undoubtedly boost the 
economy and lay down the bases for sustainable economic and social growth. 
175. We support Ecuador's efforts to contribute to wards building a new international financial 
structure at the service of the people, the production sector and as a tool for development.  We support 
in particular Ecuador's establishment of a commissi on to monitor developments in the international 
financial crisis and to contribute towards th e debate on the causes, consequences and possible 
solutions, which involve reform of the internationa l financial system so as to make it secure and 
predictable.  My country also supports the macro- prudential measures taken by  Ecuador to protect its 
economy, especially those concerning the financial sector. 
176. As far as trade policy is concerned, for both Ecuador and Venezuela customs tariffs are an 
important source of fiscal revenue and the main tool for preserving the political room for manoeuvre 
with which we intend to confront the major cha llenges for the economic diversification we are both 
pursuing. 
177. Ecuador is still the world's largest exporter of bananas and one of the leading producers.  We 
sincerely hope that the signature of the Geneva Agreement on Trade in Bananas, which brought to an 
end the longest and most controversial dispute in th is Organization, will really help to enhance the 
prospects for export to the EU market. 
178. At the bilateral level, Ecuador and Venezuel a are creating a new model of integration by 
developing a system of complementarity, effectiv e cooperation and unity.  Trade flows have grown 
exponentially.  To give one example, trade betw een the two countries amounted to US$515 million in 
2006, whereas in 2010 the figure was US$916 million. WT/TPR/M/254 
Page 32  
 
  179. Since 2007, our Heads of State have held nine presidential meetings and on each occasion 
more cooperation and complementarity  agreements have been signed, bringing our peoples together at 
various levels.  During the most recent presidential vi sit, in June this year, 14 agreements were signed 
on binational cooperation in housing, science and technology, food, trade, petroleum, and the 
economy.  Among these, the agreements on the o il sector and strengthening of trade with an 
agreement on the automobile sector were particularly important. 
180. Venezuela esteems Ecuador and congratulates it on its commitment to the multilateral trading 
system, as shown once again by its contribution towards promoting transparency, notifying to the 
WTO the measures taken to resolve its balance-o f-payment difficulties caused by the unprecedented 
crisis in the world's major financial centres at the end of 2008.  The very delicate situation 
experienced by Ecuador at that time meant that it ha d to take action to overcome the crisis because its 
economy is based on the United States dollar and do es not allow it to take any form of monetary 
measure, added to the fact that over 30 per cent of  its direct revenue depends on oil, whose price fell 
sharply in 2009, thereby accelerating destabilization, as recognized by the IMF and other organizations. 
181. It is a matter of satisfaction to our country that we supported and believed in Ecuador during 
the meetings of the Committee on Balance-of-Payme nts Restrictions held in 2010, when it was 
obliged to defend itself against aggressive attacks by some Members of this Organization in order to 
show that it had acted in accordance with the Organi zation's rules, which it finally managed to do and 
this was recognized in the aforementioned Committe e's report and endorsed by the General Council. 
182. In this connection, one key tool that unit es Ecuador and Venezuela and has enabled the 
Member reviewed to face up to the challenges of  a dollarized economy and the dependence on foreign 
currency subject to decisions not taken by our countri es, is the consolidation of the Unitary System of 
Regional Compensation (SUCRE), which acts as a vi rtual currency for foreign trade among member 
countries of the ALBA-Free Trade Agreement (ALBA-FTA), to which we both belong. 
183. So far, since SUCRE was cr eated, Venezuela and Ecuador have 82 operations under way 
through SUCRE, corresponding to US$94 million,  US$50 million in terms of exports and 
US$44 million in imports.  Strenuous efforts are being made to get the public and private sectors to recognize and reinforce SUCRE increasingly as a mone tary system because of the many advantages it 
offers and we are convinced that this will be achieved. 
184. Lastly, with regard to alliances within this  Organization, whether in connection with 
day-to-day issues, negotiations under the umbrella of  the Doha Development Round, or with a view to 
the Eighth Ministerial Conference, we can confirm th at Ecuador and Venezuela, together with other 
ALBA partners, share a very similar position and,  through various concrete proposals, we have 
defended the development dimensi on that should prevail at the WTO in order to put in place 
disciplines and practices that place trade at the service of development. 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
 
185. We are particularly pleased to note how well Ec uador has managed to weather the financial 
crisis and the economic downturn that began in 2008.   Its GDP growth rebounded to 3.6 per cent in 
2010 and, what's more, the growth rate is expected to be 5.1 per cent this year.  This recovery and 
great progress serves to illustrate th e effectiveness of the series of economic policies and strategies for 
development implemented by the governme nt of Ecuador since its previous TPR. 
186. Regarding trade policy, we have noticed that Members have raised several concerns about 
certain measures taken by Ecuador over the past fe w years.  One of these measures, which falls under 
the heading of "measures directly affecting imports" and seems to be the cause of particular concern,  WT/TPR/M/254 
 Page 33 
 
 
  has been the subject of a long debate among Me mbers at several meetings of the Committee on 
Balance-of-Payments Restrictions over the past year. 
187. We think of the TPR mechanism as the forum for reviewing not only trade policy, but also 
trade progress.  And progress can be represente d by the journey towards compliance with the 
multilateral regime or by improvements in trade polic y and economic development.  In this context, 
therefore, we are happy to see Ecuador making progr ess towards getting back on the right track, more 
compliant with the WTO regime, and its economic development moving in the direction of greater 
prosperity. 
188. According to our trade statistics, our bilateral trade ties with Ecuador might not be as close 
and tight as we would like.  However, on the multila teral front and in the Do ha Round in particular, 
with the Eighth Ministerial Conference just around the corner, we are all aware of Ecuador as a very 
active WTO Member.  Many creative ideas have been  proposed by the Government of Ecuador for 
adding to the Ministerial Conference agenda.  Furt hermore, in my capacity as Coordinator of the 
Group of Recently Acceded Members - the RAMs Group - I would like to express our special appreciation to Ecuador, and my co lleague Ambassador Carbo Benites, for his active participation, 
contributing and sharing new and constructive ideas w ithin our group.  So, we look forward to further 
trade and economic cooperation with Ecuador in the future through continued dialogue, both bilateral 
and multilateral, building perhaps on the close worki ng relationship that already exists between our 
two Missions in Geneva. 
EL SALVADOR 
 189. One historic date worthy of interest is 1890 , when Ecuador and El Salvador signed a Treaty 
on Friendship, Cooperation, Trade a nd Navigation and since then this has been the point of reference 
for our bilateral relations.  Recently, last July, a mutual technical cooperation programme was concluded and for the moment comprises 15 binational projects.  In August, two further instruments were signed, one relating to poli tical consultations on various areas in the common agendas of the 
two countries, which range from migration to the eco nomy, and the other a conve ntion to facilitate air 
traffic between the two countries. 
190. Having said that and as far as this review is concerned, we note with satisfaction that since the 
previous review in 2005 Ecuador has been redefining  its economic and social development strategy in 
order to diversify the economy and make it more soci ally inclusive, adopting important constitutional 
and institutional changes so as to  exercise more control over its st rategic sectors, positioning Ecuador 
as a domestic market-oriented trade regime. 
191. We also note that Ecuador has made considerab le efforts to build its institutional capacity, 
making it easier to set up companies and invest, wh ich is why it has taken measures to enhance and 
institutionalize transparency.  As already stated, in or der to facilitate trade, efforts have been made to 
computerize customs clearance, together with ot her modernization measures:  for example, the 
number of physical inspections has been redu ced and the preshipment inspection system was 
eliminated as of 2008.  Our own experience ha s shown us that, although computerization and 
modernization of the customs may involve large invest ment, it pays off because it streamlines trade to 
and from countries. 
192. We are very similar to Ecuador in many respects, especially as far as the monetary regime is 
concerned.  Like El Salvador, Ecuador is a small dollarized economy, which makes it an economy 
vulnerable to external upheavals such as the recent slowdown in the global economy, which has 
restrained growth.  Despite this, Ecuador has ma naged to overcome the cr isis, as shown in the 
Secretariat report. WT/TPR/M/254 
Page 34  
 
  193. At the multilateral level, we have similar inte rests to Ecuador;  we are both small economies, 
characterized by various factors that make it difficult for us to become integrated into the international 
economy and this underlines the importance of the initiatives intended to integrate our countries into 
global trade. 
194. At the bilateral level, El Salvador has friendl y ties with Ecuador and in our trade relations, 
although the trade balance shows a deficit for our co untry as El Salvador's main exports to Ecuador 
are unprocessed paperboard or paper, corrugated paperboard, raw sugar, aluminium wire mesh, 
woven glass-fibre fabric, backpack sprinklers and sprayers, medicines for human use, inter alia .  
Imports from Ecuador are mainly petroleum products, pa rticularly crude oil, gasoline, gas burners and 
cookers, butane gas, propane gas, inter alia . 
195. In the multilateral sphere, Ecuador continues to provide clear proof of its support for the 
multilateral trading system, playing an active and co nstructive role in vari ous committees and groups, 
maintaining a proper balance with its trade and systemic  interests, especially in matters of interest to 
it, and seeking special and differential treat ment for developing Members such as us. 
CHINA 
 
196. China is very pleased to attend the second tr ade policy review of Ecuador.  China and 
Ecuador are friendly countries.  Economic and trad e relations have been witnessing rapid and smooth 
progress.  In 2010, bilateral trade increased 13.4 pe r cent to reach US$2 billion.  China's principal 
exports include machinery, computers and other IC T products, steel, and motorcycles, while Ecuador 
mainly exports to China crude oil, timber, fi sheries products, copper scrap and, most notably, 
bananas.  Ecuador is now one of China's biggest inve stment destinations in Latin America.  As of the 
end of 2010, non-financial investment from Chin a was close to US$100 million.  During the same 
period, project and labour contracts amounted to almost US$4 billion, with a business turnover of 
US$1 billion. 
197. Before this meeting, my authorities did not  receive any concerns from our enterprises, 
therefore, in order not to burden our Ecuadorian friends, China did not submit written questions for 
this review.  We are glad to learn that Ecuador has weathered the global fina ncial and economic crisis 
well.  Furthermore, the economy is predicted to gr ow by 5.1 per cent this year.  During the period 
under review, unemployment fell sharply.  Infla tion remained relatively low, as a result of 
dollarization. 
198. China commends Ecuador on its open economy an d trade liberalization policy.  However, 
owing to the small base, the dependence on oil and dollarization, Ecuador's economy is vulnerable to 
external shocks, as reflected in the recent crisis.  Needless to say, Ecuador faces big diversification 
challenges.  According to the Secretariat report, Ec uador also needs to increase its productivity.  To 
achieve these objectives, Ecuador should be en couraged to further improve its business and 
investment environment. 
199. Ecuador has been playing an ac tive role since joining the WTO in 1996.  It has also made 
constructive contributions to the Doha Round negotiations.  China and Ecuador share common 
positions on many issues, especially those rela ting to development.  Among other things, both 
countries, together with other Members of the G- 20, have been asking for substantial reduction of 
agricultural tariffs and trade-distorting agri cultural subsidies from developed members. 
PLURINATIONAL STATE OF BOLIVIA 
 
200. The Government of Bolivia follows closely a nd understands the efforts which this friendly 
Republic has had to make in order to adapt its econom y, especially its international trade relations, to  WT/TPR/M/254 
 Page 35 
 
 
  the challenges which implementation of its new C onstitution has posed for the Ecuadorian people in 
order to build a fairer and more mutually supportive society within the framework of the 
Good Living philosophy and, despite various problems,  it managed to achieve impressive growth of 
close to 4 per cent of GDP in 2010. 
201. We should also to take this opportunity to acknowledge and congratulate Ecuador on the way 
in which it has managed its foreign trade relations d espite its restricted margin for manoeuvre in terms 
of monetary policy, which places it in a special situation in its international trade relations. 
202. Economic and trade relations between Bolivia and Ecuador come under the 
Andean Community framework, the regional integra tion forum in existence for over 30 years, where 
we can see that there is still great potential to pursue a mutually beneficial relationship. 
203. Furthermore, we urge it to continue building a new Ecuador based on the principles of the 
Good Living philosophy, as it has been doing in rece nt years, placing respect for the human person 
and life at the centre before following market logi c, which puts profit before other social values. 
INDIA 
 204. Being a small open economy, dependent on oil re venue, Ecuador remains exposed to external 
shocks, including the recent global economic downtur n that resulted in a slowdown in growth due to 
the sharp reduction in oil export prices and volumes.  We are happy to note that Ecuador coped with 
the crisis quite well, and growth bounced back to  3.6 per cent in 2010.  It is predicted to be 
5.1 per cent in 2011, mainly owing to higher oi l prices and a strong rebound in domestic demand, 
especially public investment in infrastructure project s.  We are also encouraged by the Secretariat's 
observation of relatively low inflation, a fall in urban unemployment and an improvement in human 
development indicators. 
205. Nevertheless, Ecuador's low produc tivity continues to attract concern.  Ways to enhance total 
factor productivity, and thereby improve Ecuador's international competitiveness, as well as product 
and market diversification, have therefore become important features of economic policy. 
206. We have noted with interest that Ecuador is in the process of redesigning its economic and 
social development strategy, with a view to dive rsifying its economy and making it more inclusive.  
During the period under review, it undertook ma jor constitutional ame ndments and related 
institutional changes, with potentially far-r eaching implications for trade and FDI. 
207. A wide-ranging Organic Code of  Production, Trade and Investment, passed in 2010, has 
streamlined the legal framework governing FDI, which now provides for national treatment for 
foreign investors under certain conditions and add itional guarantees involving investment contracts.  
We note that new legislation has been passed in sev eral trade and trade-related areas (e.g. production, 
trade, investment, government proc urement, SPS, hydrocarbons, mining). 
208. It is encouraging to note that, as a result of customs tariff reforms (including the adoption of 
the HS 2007 tariff nomenclature), the average app lied MFN tariff rate dropped from 11.4 per cent in 
2005 to 9.3 per cent in 2011.  The fact that all tariff lines are bound imparts a high degree of 
predictability to the tariff.  Computerized customs clearance and other modernization efforts have also 
been undertaken to facilitate trade.  We have also  noted that legislation on protection of IPRs was 
reinforced under the 2008 Constitution, and is undergoi ng substantial reform.  Registration procedures 
and enforcement action were also improved. 
209. Ecuador's economic growth is expected to remain relatively strong, but its long-term 
prosperity will depend on its success in improving  the productivity of its enterprises and their WT/TPR/M/254 
Page 36  
 
  international competitiveness, along with diversifica tion of its economy.  We hope that Ecuador will 
be able to achieve its economic and social obj ectives, and wish it success in its endeavours. 
210. India's trade with Ecuador has witnessed st eady growth.  Total trade was US$142 million in 
2010, including exports from India worth US$131.75 million and imports by India worth US$10.35 million.  Bilateral trade was US$110 milli on during January-June 2011, comprising exports 
worth US$94 million and imports of US$16 million. 
211. There is considerable untapped potential and bot h sides recognize the need to diversify the 
trade basket and build awareness in order to realize the full potential of trade and investment linkages 
of the two countries.  An Ecuador-India chambe r of commerce has been established to further 
strengthen these linkages. 
212. India and Ecuador are actively exploring the possi bility of cooperation in the pharmaceuticals 
sector, mainly for manufacturing of pharmaceuticals in Ecuador through investment and sharing of 
know-how.  Both countries are also looking at coop eration in energy, particularly in hydrocarbons. 
213. Recognizing the importance of South-South coope ration in the development agendas of their 
respective countries, India and Ecuador are working to promote technical cooperation in information 
technology, telecommunications, alternative ener gy, biotechnology, health sciences, traditional 
knowledge, high-level technical edu cation and other areas of mutual interest.  India is providing 
technical assistance to Ecuador through the Indian Technical Economic Cooperation 
Programme (ITEC).  India has announced further expa nsion of this programme from 25 places in the 
current year to 45 places per annum in areas of specifi c interest to Ecuador, such as renewable energy, 
waste management, disaster management, biotechnology,  life sciences, etc.  India has also agreed to 
set up a Centre of Excellence for Information Technology in Ecuador as per a memorandum of 
understanding signed in this connection.  India's contribution is estimated at US$1 million, and 
Ecuador would take over complete day-to-day operati ons of the centre fully after three years.  India 
has offered a concessional line of credit of US$50 m illion to Ecuador, which Ecuador proposes to use 
to finance a hydroelectric project. 
214. India's major consultancy firm, Tata Consulta ncy Services (TCS), has signed an agreement 
with Banco Pichincha, Ecuador's largest privat e bank, to provide a comprehensive outsourcing 
solution valued at over US$140 million over a period of five years.  Another major infrastructure 
company, Gammon India, has an investment of around US$30 million in development of an oil field in Ecuador. 
CUBA 
 
215. We should like to highlight the enormous  efforts made by Ecuador and its positive 
performance in all spheres since 2005 at the time of its first review.  It must be emphasized that this 
country has been deeply involved in gradual adapta tion of its macroeconomic policies with the aim of 
gradually and equitably raising the living standards of its population. 
216. As far as bilateral trade relations are concerned, Cuba's trade with Ecuador has increased 
substantially in recent years.  Our countries signe d an Economic Complementarity Agreement within 
the LAIA framework in May 2000, under which tr ade preferences are granted and relations have 
become closer.  Another salient feature is the c ooperation programmes in areas that are priorities for 
the Ecuadorian Government such as health and education. 
217. The Cuban delegation welcomes Ecuador's economi c growth achievements with considerable 
satisfaction and urges it to continue implementing policies that are able to confront the major 
challenges faced by developing countries in th e critical international economic situation.  WT/TPR/M/254 
 Page 37 
 
 
  218. We should also like to acknowledge the activ e role played by Ecuador's permanent 
representatives in Geneva, particularly in defendi ng development-related issues.  Our delegations 
cooperate closely and this has enabled us to subm it joint proposals during the negotiations and work 
under way at the WTO.  The most recent related to  e-commerce, which is included in the strategies 
defined by the Ecuadorian Government with a view to connectivity and development of 
telecommunications in order to build the information society. 
219. Cuba and Ecuador share common historical and cultural roots and face similar problems, so it 
is no surprise that we have common objectives in th e WTO.  Bridging the gap between developed and 
underdeveloped countries, the imbalances and imperfec tions of the current multilateral trading system 
and the search for effective solutions to the pr oblems faced by the small economies in this 
Organization in participating competitively in in ternational trade are some examples of the goals 
which both countries have set and we should like to see them achieved as soon as possible.  We also pay tribute to the compliance with Ecuador's firm and decisive commitment to the multilateral trading 
system. WT/TPR/M/254 
Page 38  
 
  V. REPLIES BY THE REPRESENTATIVE OF ECUADOR AND ADDITIONAL 
COMMENTS 
COMPOUND TARIFFS 
 
220. Many of the replies provided by Ecuador deal ex tensively with this i ssue.  In any event, 
I should like to repeat that Ecuador has provided information in accordance with the requirements of 
the multilateral rules and has also had bilate ral meetings with interested countries. 
221. It can be confirmed that the tariff reform in troduced by Ecuador in 2010 and which changed 
the tariff rate for certain products is consistent with the rights and obligations prescribed in the 
GATT 1994.  Furthermore, the measure has not affected  trade flows with Members.  The foreign trade 
statistics show that trade in these products conti nues to increase, proving that there is no real or 
potential trade problem between Ecuador and its part ners.  For example, the forecast for imports in 
2011, using figures from the Central Bank of Ecuador, indicate that total imports of made-up articles 
will increase by around 55 per cent, 45 per cent for footwear and 30 per cent for textiles, compared 
to 2010. 
IMPORT LICENSING 
 
222. COMEX Resolutions Nos. 17 and 24 on the prior import licensing regime replaced the former 
scheme in effect up to August 2011, which prescribed  an import registration requirement for 87 tariff 
subheadings.  The import licensing regime now has a more efficient system for evaluating and monitoring imports in order to ensure that it is st able and predictable.  The current mechanism has 
reduced the number of subheadings monitored from 87 to 42 and consists of a straightforward and 
transparent procedure, which has been explained in detail in Ecuador's replies in the course of this 
review. 
223. Furthermore, as Ecuador has stated in its replies, in order to facilitate trade, COMEX is 
streamlining the procedure for all types of import li cences.  In addition, it should be emphasized that 
the import licences will be reviewed at the end of the year. 
FOREIGN DIRECT INVESTMENT AND BILATERAL INVESTMENT TREATIES 
 
224. Ecuador provides a sound, transparent, reliabl e, secure and non-discriminatory investment 
climate for both domestic and foreign investment, under the constitutional frame work and the Organic 
Code of Production, Trade and Investment.  This code gives foreign investors ample guarantees of 
protection and legal security for their capital.  In other words, foreign investments are given national 
treatment in order to facilitate free production and marketing of lawful goods and services, access to 
administrative procedures and control measures in order to prevent speculation, allow freedom to 
import and export goods and free transfer of profits abroad. 
225. Moreover, as shown in the information given to Members on the occasion of this review, 
Ecuador is ready to conclude investment cont racts consistent with the current constitutional 
framework in order to develop foreign investme nt.  As already mentioned, under the Code of 
Production it is sought to guarantee, promote and protect domestic and foreign investment under 
a predictable and non-discretionary system.  It should be emphasized that investment contracts 
provide for an international dispute settlement mechanism. 
STRATEGIC SECTORS 
 
226. The definition of strategic sectors does not i nvolve any restriction on public or private 
domestic or foreign investment.  The highway, mari time and air infrastructure, hydroelectric plants,  WT/TPR/M/254 
 Page 39 
 
 
  refineries, mining concessions, inter alia , declared to be strategic sectors, to a large extent require 
private domestic or foreign investment. 
NOTIFICATIONS 
 
227. Ecuador regularly complies with its notification ob ligations in relation to agriculture, sanitary 
and phytosanitary measures, technical standards a nd trade defence.  In October 2011, the customs 
valuation check-list of issues was notified.  Work is  also going on to update and ensure the continuity 
of Ecuador's transparency obligations, for whic h it is hoped to establish a cooperation programme 
with the WTO Secretariat. 
IMPORT SUBSTITUTION 
 
228. I should like to repeat that the model which Ecuador wishes to implement as a developing 
country is to apply sectoral development policies by transforming production and attracting private 
investment, boosting imports of capital goods, in puts and technology, with the ultimate goal of 
producing goods with high value adde d.  Ecuador considers that its m odel is fully consistent with its 
WTO commitments. 
ECUADOR'S COMMITMENTS ON SERVICES 
 
229. Some Members have mentioned the so-called "limited commitments" made by Ecuador on 
services.  Ecuador has made commitments in ten of the 12 sectors in its schedule. 
APPLIED, MOST-FAVOURED-NATION AND BOUND TARIFFS 
 
230. Allow me to stress that the "leeway" or gap between the tariffs bound a nd applied by Ecuador 
allows room for administering its tariff polic y.  The openness index has increased.  The average 
applied MFN tariff fell from 11.4 per cent to 9.2 pe r cent in 2011.  In addition, 54.5 per cent of 
applied MFN tariffs range from 0 to 5 per cent ad valorem .  The maximum MFN tariff applied is 
20 per cent, except for certain types of automobile. 
GOVERNMENT SPENDING 
 
231. Ecuador ensures that productive investment facilitates long-term economic growth and 
prosperity.  The aim is to improve the people' s living conditions throu gh more jobs and higher 
incomes, raise the levels of education and health, an d the competitiveness of firms.  In order to meet 
this objective, it is intended to terminate the cons truction of the physical infrastructure necessary such 
as roads, motorways, hydroelectric plants, refineri es, etc.  For example, the change in the energy 
matrix will enable efficient use of power, which w ill mean future savings for the country, a reduction 
in CO 2, and increase the competitiveness of firms. 
PRICING POLICY 
 
232. Ecuador has no pricing policy other than for purely social reasons and on an exceptional 
basis. 
TARIFFS EXCEEDING THE BOUND RATE 
 
233. Some Members have stated that 19 tariff subh eadings exceed the bound rates.  Once again, 
this situation will be reviewed after the process of transposing tariffs into the HS 2002 has been 
completed, and this is in the final stages. WT/TPR/M/254 
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  COMPETITION POLICY 
 
234. The Organic Law on Control and Regulati on of Market Power was published on 
13 October 2011 and has been in force since then.  A Supervisory Authority for the Control of Market 
Power has also been set up to regulate such practices .  It should be emphasized that the purpose of this 
Law is to avoid, prevent, remedy, eliminate and punish any abuse by economic operators with market 
power;  to prevent, prohibit and punish collusive arrangements and other restrictive practices;  to 
control and regulate economic mergers;  and to pr event, prohibit and punish unfair practices, with 
a view to market efficiency, fair trade and the ge neral well-being of consum ers and users, so as to 
establish a mutually supportive and sustainable economy. 
TAX MATTERS 
 
235. The Government of Ecuador has made three a nd not nine amendments to the Tax Law since 
2007.  It has also adopted amendments to facilitate the calculation of the tax payable by taxpayers, to 
make certain charges more equitable, to expand th e criteria for deductions from certain taxes, and to 
harmonize domestic legislation with Ec uador's international commitments. 
236. The amount of certain taxes has occasionally been  modified and, when this occurs, the main 
purpose has been to reduce them.  Limited incr eases in the amount of tax are justified for 
environmental, public health and security reasons .  The ICE does not discriminate between domestic 
and imported products.  Although the series of components and parts required to assemble an 
automobile are not subject to ICE when they clear customs, the assembled vehicle is taxed at the time 
of final sale.  As to VAT, Ecuador still has a rule that  allows four products to be  exempt from this tax.  
Ecuador will review this rule in orde r to adapt its domestic legislation. 
237. Ecuador imposes a tax on the outflow of foreign currency, solely for the purpose of 
maintaining the foreign currency liquidity needed to  guarantee the supply of money in a country that 
is unable to issue its own currency.  The tax on remittances does not apply to foreign investors' 
profits.  This tax does not apply to imports because importers are eligible for a tax credit for payment 
of income tax. 
INTELLECTUAL PROPERTY 
 
238. Regarding the concerns raised in respect of intellectual property, allow me to state that 
Ecuador's regulations do not impose any prohibitions on the appropriation of scientific or 
technological knowledge.  What does exist is a constitutional ban on a ppropriating traditional 
knowledge, which is also applied in accordance with the provisions in Article 27 of the 
TRIPS Agreement.  Geographical indications are sufficiently protected by Articles 237 and 247 in Chapter VIII of Ecuador's Intellectual Property Law. 
239. The IEPI, together with Ecuador's Internal Revenue Service and National Customs Service, 
among other bodies, constantly combats piracy and a pplies IPRs at the border, as has been recognized 
on many occasions by the World Customs Organizati on.  The IEPI's website gives details of the 
complaints and cases relating to piracy. 
CUSTOMS ISSUES 
 
240. Since March 2008, no goods shipped to Ecuador have required preshipment inspection.  As 
well as abolishing preshipment inspection, there have many positive changes in relation to trade 
facilitation, which, inter alia , have allowed customs formalities to be streamlined:  eliminated criteria 
for physical inspections;  introduced risk contro l tools;  reduced customs clearance from 12 to  WT/TPR/M/254 
 Page 41 
 
 
  approximately six days;  and implemented a new computerized customs system, which includes the 
single window. 
DISCUSSANT 
 
241. With regard to macroeconomic policy, delega tions congratulated Ecuador on the successful 
way in which it had confronted the international fina ncial crisis, with economic growth, a low rate of 
inflation, reduced unemployment and poverty and better income distribution.  The important 
contribution of government spending during the crisis  was highlighted, following the drop in private 
domestic spending and capital flows at the global level.  Some delegations mentioned that the 
safeguards applied had helped to curb the deteri oration in the balance of payments and domestic 
liquidity in this dollarized economy. 
242. Delegations pointed out that dollarization had created a commendable climate of stability in 
the economy, although the absence of monetary and exchange policies, combined with the high 
reliance on foreign currency revenue from oil, bananas and remittances, made Ecuador very 
vulnerable to external shocks, so policies should be directed at lessening this vulnerability.  In this 
connection, they underlined the importance of the programmes being carried out by the authorities in 
order to diversify the system of production and ex ports.  The maintenance of an open environment 
had created greater potential for the sustainability of economic growth.  It was emphasized that the 
generalized energy subsidies made fiscal polic y more complex because they weakened the 
Government's capacity to manage fiscal revenue. 
243. Regarding trade policies, delegations drew atte ntion to Ecuador's active participation in the 
Doha Round negotiations and the importance it attach ed to its instruments, viewing positively the 
guarantee given to small economies by the rules of the multilateral trading system in dispute settlement, as had been the case in Ecuador' s favour in the bananas and shrimp cases. 
244. Some delegations considered that the Constitu tion and new legislation would call for efforts 
at adaptation for the economy and international rela tions so as to achieve a more socially inclusive 
production matrix in a fair and mutually suppor tive society, within the framework of the 
Good Living philosophy, which underlined the importan ce of human values over those of the market.  
Other delegations drew attention to the need to en sure that the new regulations helped to raise the 
economy's low levels of competitiveness and productiv ity, as well as leading to greater transparency 
and helping to lessen corruption. 
245. In relation to investment, some delegations  underlined the fall in FDI, which was an 
important factor complementing domestic efforts in  terms of investment, transfer of knowledge, and 
production links with foreign markets.  They attri buted this reduction to pr oblems of confusion among 
the various laws existing, which weakened the le gal security on which investors relied as a guarantee 
for their resources.  More State intervention in  the economy restricted opportunities, as did the 
restriction in place in so-called strategic sectors.  In this connection, they requested the authorities to 
provide further details on the FDI regime.  Other delegations also sought further information on the 
consequences of renunciation of  bilateral investment treaties because, in their view, national 
agreements could not provide the leve l of guarantees provided by the former. 
246. Concerning the tariff regime, delegations vi ewed positively the reduction in the average 
applied tariff.  At the same time, most of them expressed their concern at the increased complexity 
and escalation of the tariff regime compared to that existing in 2005.  Some pointed out that it was not 
appropriate to resolve fiscal problems by mean s of trade policies and the increased effective 
protection introduced an anti-export bias.  They al so requested the authorities to respond to their 
concerns already raised in relation to compound ta riffs on 356 lines, which had replaced safeguards, 
and on the methodology used when comparing bound ta riffs to their AVEs.  Other delegations sought WT/TPR/M/254 
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  information on the new import licensing restrictions , which had started to be introduced through 
COMEX resolutions in August last, and wanted to  be sure that they were consistent with 
WTO regulations and did not become tariff barriers.   Some stated that there were measures which 
discriminated against certain importers of vehicles. 
247. In relation to notifications, some delegations underlined the need to regularize the various 
notifications that had to be made to the WTO, viewing most favourably the technical assistance 
provided by the Secretariat to improve the presen tations in order to overcome these problems. 
248. Turning to trade facilitation, some delegations  drew attention to the progress made in 
improving trade facilitation through the streamlining and computerization of procedures.  Others said 
that they awaited the authorities' responses to  the questionnaires transmitted on this topic. 
249. Some delegations also requested that national st andards be adapted to in ternational standards, 
especially sanitary and phytosanitary standards.  It  was also asked why different standards were 
applied to imports from members belonging to the Andean Community and other countries. 
250. In the area of intellectual property, some dele gations congratulated the authorities on having 
reinforced the TRIPS legislation.  Others asked fo r clarification on how this helped to prevent the 
appropriation of resources and the associated trad itional knowledge.  Other delegations pointed to 
a conflict between domestic legislation and Artic le 27 of the TRIPS Agreement in relation to 
technology patents and geographical indications an d asked whether the law gave protection against 
errors of interpretation of Article 22 of the Agreem ent.  Delegations expressed their concern regarding 
commercial and trademark rights, compliance by the courts, and the low level of fines. 
251. With regard to competition policy and governme nt procurement, some delegations underlined 
the imperative need to have a clear competition pol icy, whilst others congratulated Ecuador on the 
new Competition Law, so the authorities need to bring us up to date on this situation. 
252. Delegations paid tribute to the efforts made by the authorities to ensure that government 
procurement was transparent and up-to-date, under lining the progress made, as well as the importance 
of giving micro, small and medium-sized enterprises a greater role to play.  Some delegations asked 
that foreign firms be allowed to participate and that Ecuador accede to the WTO Plurilateral 
Agreement on Government Procurement. 
253. Concerning sectoral policies, several delegations said that a firmer commitment on the part of 
Ecuador in the subsectors of the General Agreement on Trade in Services would help to increase trust 
and the flow of investment to Ecuador.  They also  advocated greater liberalization of transport and 
sought information on a package of tax measures currently being discussed by the Legislature. 
ARGENTINA 
 
254. Political and trade relations between Argentin a and Ecuador have gradually deepened over 
the past few years, as is reflected in the respectiv e trade balances.  We s hould like to emphasize that 
this TPR has shown that Ecuador has impressive m acroeconomic data.  The growth of its economy, 
particularly over the past year, the positive pe rformance during the economic crisis, the reduced 
unemployment, the improved quality of jobs, as we ll as the reduction of income inequalities, are 
indicators that need to be highlighted.  Argentina also wishes to congratulate Ecuador on the adoption 
of extremely judicious domestic policies and measures.  WT/TPR/M/254 
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  UNITED STATES 
 
255. The United States delegation would like to offer six follow-up questions for your 
consideration and for further discussion. 
256. The first question has to do with copyright and it can be found on page 81, paragraph 143, of 
the Secretariat report.  We appreciate Ecuador's answer which seems to confirm that Ecuadorian law 
requires the use of "open source" software in hi gher institutions.  Our questions were aimed at 
a different issue.  First, we would like to learn more about the scope of the "compulsory licence" and the "preferential tariffs" mentioned in the 2010 law.  Ecuador's answer indicated, without elaboration, 
that the compulsory licence (the scope of which we do not know) complies with the three-step test in 
Article 13 of the TRIPS Agreement.  We have not previously seen such a co mpulsory licence for the 
sale and use of software.  We woul d be interested in learning more about this law, as well as about 
Ecuador's view on the relationship between this law and Article 13 of  the TRIPS Agreement.  Second, 
we would still like to know whether a "software dist ribution company" is the same as the rightsholder 
(or owner) of copyrighted computer software.  Thir d, the answer did not address our question about 
how this 2010 law does, or does not, supplant or ot herwise revise the 1999 Education Law, which also 
included a provision that appeared to grant free soft ware licences to certain educational institutions. 
257. The second question has to do with enforcement, which is page 81, para graph 146.  We thank 
Ecuador for its confirmation that Ecuador's courts have  full authority to enforce judicial orders.  That 
being the case, we ask Ecuador to also address the s econd part of the question regarding exactly what 
such authority entails.  We cited the example of imposing penalties against a lleged infringers who fail 
to comply with court orders.  Do courts in Ecua dor have this authority?  What other tools do 
Ecuador's courts have to ensure compliance with their orders? 
258. The third question also regarding enforcem ent on page 82 paragr aph 148.  Ecuador's 
explanation regarding its Intellectual Property Comm ittee is helpful.  When does Ecuador expect to 
have specialized IP judges in place? 
259. Still on the same section of enforcement on pa ge 82, paragraph 148, regarding criminal 
penalties for copyright infringement.  Could Ecuador  provide data regarding the number of criminal 
cases filed and the number of criminal sentences issued over the past five years? 
260. Going on to the fifth question regarding patent s on page 19, paragra phs 72 and 81, of the 
Government report, we understand from your respon se that the patentability of applications "on 
derived or synthesized products obtained from colle ctive knowledge relating to national biodiversity" 
is not prohibited based on the subj ect matter of the application but rather in instances in which the 
claimed invention is not novel.  Thus, we understand, based on your response, that if an application 
was directed to subject matter "relating to national biodiversity …", that application would be eligible 
for patentability assuming it satisfied the novelty requirement (and non-obviousness/inventive step)? 
261. And the final question also regarding pate nts, on page 79, paragraph 138, of the 
Secretariat report.  Could Ecuador please provide further details as to how Articles 332 to 345 are 
used to protect undisclosed marketing approva l data for pharmaceutical products from unfair 
commercial use?  In particular, could Ecuador please  identify the specific provisions that provide this 
protection and the terms of the protection? 
EUROPEAN UNION 
 
262. The European Union would like to thank the delegation of Ecuador for its replies, which 
provided us with very useful information on issues ra ised in the questions we submitted.  We do have 
a few follow-up questions.  First, the EU notes th at our question 7 has not been answered.  Can WT/TPR/M/254 
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  Ecuador provide full details of its proposed ICE tax reform and confirm that it will respect its national 
treatment commitments in relation to the taxation of imported and locally produced goods (including 
spirits, drinks and cars), in accordance with its  commitments under Article III.2 of the GATT? 
263. Second, the EU notes that its questions 17 and 18 from its set of advance written questions 
have not been fully answered.  Could Ecuador provide a reply to these questions concerning the 
current status of the Investment Promotion a nd Protection Agreements (IPPAs), including those 
denounced by Ecuador, and please explain how Hungarian  and Finnish investments, if any, will be 
protected in Ecuador after the expiry of their Ag reements?  The Bilateral Investment Promotion and 
Protection Agreements between the Netherlands and Ecuador have already been voted in the 
National Assembly and the Assembly decided not to denounce the Agreement.  Could the 
National Assembly vote again? 
264. Third, a follow-up to our question 28:  according to COMEX Regulations No. 18 and No. 30, 
tariffs applied to complete knock-down kits (C KD) for vehicle assembling will be reduced for 
vehicles that include Ecuadorian parts in their assemb ly.  Vehicles with impor ted CKDs will have to 
pay higher tariffs than those which include Ecuador ian CKDs.  How will Ecuador ensure that vehicles 
with imported CKDs are not discriminated agai nst compared to vehicles with local CKDs? 
265. Four, a follow-up to question 43:  in the pharm aceutical sector where international companies 
have patents on medicines or specifications to  produce a medicine they have to import the 
raw materials from their headquarters to comply with product specifications.  In this case, it is difficult or impossible to have a percentage of Ec uadorian materials in the final product.  How can 
Ecuador ensure that international pharmaceutical  companies are not discriminated against in 
government procurement compared to those na tional companies which can include Ecuadorian 
raw materials in their medicines and benefit from preference margins?  WT/TPR/M/254 
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  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
266. The second trade policy review of Ecuador h as given us a much better understanding of 
recent developments in its trade and trade-related policies and practices, together with the challenges 
it faces.  We are grateful for the active participation and the prompt response of the Ecuadorian delegation headed by H.E. Mr Francisco  Rivadeneira, Vice-Minister for Foreign Trade 
and Economic Integration at the Ministry of Foreig n Affairs and Economic Integration.  I would also 
like to thank the discussant, H.E. Ambass ador Luis Manuel Piantini Munnigh of the 
Dominican Republic, and the Members of the TPRB for contributing to our fruitful exchange of views.  Ecuador's detailed responses to the many questions posed by Members are also appreciated. 
267. Members commended Ecuador for weathering we ll the global economic downturn, without 
adopting trade protectionist measures other than  those taken in 2009 for balance-of-payments 
purposes on a temporary basis.  They recognized Ec uador's achievements in the areas of human 
development and income inequality, as well as the benefits and policy constraints relating to its 
dollarized monetary regime.  Members noted that Ecuador's dependence on oil revenue and 
expatriates' remittances le ft its economy more vulnera ble to external shocks. 
268. Members also noted the changes brought by c onstitutional and legislative developments since 
2008 in several areas, including those in strategic se ctors, which some felt had created elements of 
uncertainty for domestic and foreign investors.   Some acknowledged the improvements brought 
recently to the FDI regime, though they were concerne d at the steps to terminate bilateral investment 
protection agreements, and questioned whether nationa l legislation could provide the same assurances 
as an international treaty.  Members acknowledged the efforts Ecuador has recently made to improve 
productivity and international competitiveness, alt hough some concerns were expressed about using 
trade policies for selective import substitution and to support investment in value adding activities. 
269. Members acknowledged Ecuador's constructive pa rticipation in the WTO and Doha Round 
activities.  They welcomed the transparency impr ovements that had been made and encouraged 
further progress in certain WTO notification areas.  In that connection, we take note of Ecuador's 
request for consolidation of the relevant WTO technical assistance. 
270. Some Members welcomed the reduction of average MFN applied tariff rates since the 
last TPR, while others noted the relatively wide  gap between the average bound and applied MFN 
tariff rates, as well as the increase in average MFN ta riff levels for agricultur al products.  Several 
Members commended Ecuador on its trade facilitati on achievements and expressed their satisfaction 
with developments in government procurement and competition legisl ation.  More information was 
sought from Ecuador about the latest requirements in six areas:  (1) import licensing;  (2) sanitary and 
phytosanitary standards and measures;  (3) export measu res;  (4) energy-related subsidies;  (5) pricing 
policy;  and (6) GATS commitments.  Remarks were also made on the impact of IVA and ICE tax rates on imports of certain items, as well as the possibl e effect of the foreign exchange flight tax on 
production costs.  Some Members noted improveme nts in IPR protection in Ecuador and raised 
questions relating to its scope and enforcement. 
271. From a close examination of the Vice-Minister's statements and observations made by 
delegations during this review, it appears to me that this TPR of Ecuador should encourage the 
authorities to press ahead with their reforms a nd consider taking further action or introducing 
improvements in certain (five) areas: 
 Productivity :  Members urged Ecuador to impr ove its productivity and thereby its 
competitiveness, and to view more open trade policies as a potentially valuable tool 
in this regard. WT/TPR/M/254 
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   Export diversification :  Members urged Ecuador to step up its efforts to diversify its 
exports and seek new markets. 
 Business environment :  Members encouraged Ecuador to proceed with its structural 
and regulatory reforms in order to further improve its business and investment environment. 
 Compound duties :  Several Members reiterated their request for submission of 
AVEs for compound duties and observance of binding levels. 
 Standards :  Ecuador was encouraged to increase the proportion of its national 
standards that are based on international standards. 
272. In conclusion, I believe that this review h as given us a comprehensive update on Ecuador's 
foreign trade regime.  Ecuador has been encouraged to adhere more closely to WTO rules with a view 
to enhancing the stability, predictability and transp arency of its trade regime.  I recommend that 
Members support Ecuador in its continuing efforts by  providing further market access to its goods and 
services and by responding to Ecuador's needs for technical assistance and expertise. 
__________