RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/BOP/R/98 
9 April 2010 
 
 (10-1854) 
Committee on Balance-of-Payments Restrictions  
  
 
REPORT ON THE MEETINGS OF 22 AND 23 MARCH 2010 
 
 1. The Committee met on 22 and 23 Marc h 2010, under the Chairmanship of 
Ambassador Darlington Mwape (Zambia) (firs t part of the meeting of 22 March) and 
Mr. Raimondas ALISAUSKAS (Lithuania) (second part  of the meeting of 22 March and meeting of 
23 March).  The agenda of the meeting is cont ained in WTO/AIR/3523 and WTO/AIR/3523/Add.1.   
2. Ecuador committed to the elimination of all me asures taken for balance-of-payment purposes 
by 23 July 2010.  There was no consensus with r espect to the WTO consistency or the nature or 
justification of the measures.  Th e Committee agreed to meet again in  late May and late July 2010 to 
monitor the gradual dismantlement of the measures. 
MEETING OF 22 MARCH 
3. The Chairman
 (Amb. Mwape), welcomed Members to the first meeting of the Committee in 
2010.  The agenda for the meeting was as follows:  1)  election of officers, namely the election of the 
new chairman of the Committee on Balance-of-Pay ments Restrictions;  2)a follow-up of the 
consultations with Ecuador, at the request of the delegations of Canada, the European Union and the 
United States;  2)b notifications by Ecuador  contained in documents WT/BOP/N/74 and 
WT/BOP/N/75;  and, 3) other business.  He  proposed that the agenda be adopted.  
4. The representative of Argentina  stated that he regretted to take  the floor regarding the agenda.  
With respect to the inclusion in the agenda of the follow-up of the report adopted last year on the case 
of Ecuador, he noted that after long debates, the report had been adopted and the consultations had 
ended.  He considered that the phrase "follow-up of  the consultations" in point 2)a of the Agenda 
would appear to suggest that those consultations  had never been concluded as they had been.  
Argentina suggested correcting this language to make it reflect what had actually happened.  
Argentina had no problem dealing with this issue agai n if necessary, but the way in which this point in 
the agenda had been drafted suggested that the cons ultations had not been conc luded, and they had.  
5. The representative of Venezuela  supported Argentina's statement.  Venezuela did not 
understand why this point had been included in the agenda and suggested that it be removed from it. 
6. The representative of Argentina suggested that the Secretariat rephrase item 2)a of the agenda 
to reflect the substance of this item. 
7. The Chairman  stated, as a matter of clarification, that  it had been definitely agreed that the 
Committee had concluded the consulta tions with Ecuador.  That was indeed the Committee's position.  
The report that had come out of the consultations stated clearly that the consultations had been 
concluded.  However, a request had been made by some Members to include an item in the agenda.  
That did not mean that the consultations had not been  concluded;  it was rather a question of hearing 
what those Members had to say on th at issue.  It should be consid ered as a follow-up of the report of 
the consultations.  The process of consultations had, in itself, been concluded.    WT/BOP/R/98 
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8. The representative of Venezuela
 stated that his country also considered that the consultations 
had ended.  He thought that if some Members had some observation to make, this should be included 
under the item "Other business", but should not be linke d to Ecuador's balance-of-payments situation. 
9. The representative of the United States  said that she took the point made by Argentina and the 
Chair that maybe it was not a follow-up on the consu ltations process.  She considered that there was 
agreement with respect to the fact the consultati ons had been concluded but this was a follow-up on 
the report, and there was a specific statement made  in the report that technically needed some 
clarification.  The United States could agree to cha nge the text of the agenda to "follow-up of the 
report".  
10. The representative of Venezuela  noted that the Understanding did not contain any language 
making reference to a follow-up of the report.  Once a report was adopted, the case was finished and 
notified to the General Council.  It that were not to  be so, there would be follow-ups to many reports 
and it would become a never-ending story.  The pr ocess had ended and if there was something to 
clarify, this could be done in the next meeting under "Other business". 
11. The Chairman stated that the point had been duly noted.  He noted that what was important in 
this meeting was for Members to express themselve s as to whether the consultations and the report 
that the Committee had adopted had been duly im plemented in accordance with what had been 
agreed.  The Committee would hear from Members if  there was an issue, and then would hear 
Ecuador's views.  That did not necessarily mean reope ning consultations;  that was not the intention.  
He considered this to be a substantive discussion and was reluctant to place it under "Other Business". 
12. The representative of Ecuador  thanked Argentina and Venezuela for their interventions.  
Ecuador did not wish to make any declaration on th is issue.  Ecuador would only provide information 
on its notifications.  Ecuador did not wish to have  any follow-up of the consultations, which had been 
closed and concluded.  As Venezuela had stated, the Understanding did not contain provisions with 
respect to the follow-up of consultations.  Ecua dor had gone along with this issue because it had 
wanted to be transparent and direct, but in fact di d not agree with this item of the agenda.  Ecuador 
was ready to inform the Committee regarding its notif ications, as included in item 2)b of the agenda.   
13. The representative of Argentina  stated that there was a problem of form.  There was a request 
from some delegations who had the right to do so.  Bu t maybe it would be better to be more general in 
point 2)a and not to link it to the consulta tions, since consultations were over.   
14. The representative of Cuba  expressed her support to the statements made by Argentina and 
Venezuela. 
15. The Chairman  suggested that the item read "Repor t on the consultations with Ecuador.  
Request by the delegations of Ca nada, the EU and the United States".  Noting that these Members had 
made the request to introduce the subject, he sugg ested that, in their presentation of the substance of 
the request, they introduce the topic.  
16. The representative of the United States  stated that she thought it was important to look at the 
Understanding in this situation.  She wished first to  note that paragraph 9 stated that Members should 
notify to the General Council the introduction or any changes in the application of restrictive import 
measures taken for balance-of-payments purposes.  Sh e also wished to note that, in the previous 
consultations, Ecuador had committed to remove any balance-of-payments restrictions.  Based on that 
and on paragraph 10 of the Understanding that at the request of any Member notifications may be 
reviewed by the Committee, and being that the co mmitment that had been made by Ecuador during 
the previous consultations was unde r question due to the recent notification, she believed there were 
grounds to request a review of the previous consulta tions and the previous report.  That was what the  WT/BOP/R/98 
 Page 3 
 
 
United States and some other Members had requested  to do.  The United States would be, however, 
happy to accept the compromise suggested by Argent ina and the Chair of reviewing the report.   
17. The representative of Argentina  said that paragraph 10 stated that Members could request to 
review the notification but that was it.  Maybe th e representative of the United States could clarify her 
previous point.  
18. The representative of the United States  said that the text did not specify which notifications it 
was referring to, and in that sense, the original notification which was part of the previous year's 
consultations could also be subject to review.  A dditionally, the recent notifications also brought into 
question the results of the previous consultations.  For those two reasons, the United States believed 
that the issue could be discussed under paragraph 10.  
19. The representative of Argentina stated that, under paragraph 10 is was possible to review the 
new notifications, which were something different fro m the notification referred to in the report.  He 
could not see on what basis that (latter) notification could be reviewed.  
20. The representative of the European Union  stated that is was very useful to look at the 
Understanding to see what it said about possibilities for fo llowing-up.  In this context, he would just 
like to flag as well what the actu al report for the consultations last year said in paragraph 34, namely 
that the Committee welcomed Ecuador's commitment to remove all trade measures for balance-of-
payments purposes no later than 22 January 2010 and to immediately notify the steps taken to the 
Committee.  The notification of the steps taken, in the EU's view, gave the opportunity for the 
Committee to discuss in which way Ecuador had im plemented the commitment it had taken in the 
consultations the previous year.  
21. The representative of Canada noted that Canada's understanding of the process was that 
Members could request an item to be placed on the agenda, as had been explained by the delegations of the United States and the EU.  Canada would be  amendable to consideri ng a language that would 
satisfy the interest of all parties so as to conti nue with the Committee's review of the matters.  
22. The representative of Venezuela
 said that paragraph 10 of th e Understanding called for the 
Committee to gather information about the measures  and pass it on to Members.  That had already 
been done during the whole of last year.  If there had been some shortcoming or deficiency in the 
notification, it would be justified to start a new process, but last year that process had followed its course, starting from the notification, continuing with  consultations and ending with a report in which 
the measures adopted by Ecuador had been okay ed by the Committee.  The notification the 
Committee was set to analyze today was a new one;  it was not the follow-up of the previous process.  
23. The Chairman
 (Ambassador Mwape) stated that, having listened to all delegations, the issue 
seemed to be a problem with the wording "follow-up ".  So maybe the easiest way out would be to 
simply state the agenda item as "Report on the cons ultations with Ecuador", full stop, followed by 
"Request by the delegations of Canada, the EU and the United States".  Would that be acceptable?  If 
that was the case, the agenda could be adopted.  He would now take the opportunity to ask Members 
who wished to introduce any item under "Other Busi ness".  Since it was not the case, he would wish 
now to turn to the first item of the agenda:  election of officers.  As Members might recall, in the last 
meeting of the General Counc il in February 2010, Mr. Raimondas Alisauskas, Permanent 
Representative of Lithuania had been appointed Ch airman of the Committee on Balance-of-Payments 
Restrictions.  As noted by the General Council in Fe bruary, subsidiary bodies such as this one had to 
make the formal appointment.  As this appoint ment had been the result of consultations among 
Members, he would assume that the Committee w ould agree to Mr. Alisauskas appointment as 
Chairman for 2010.  Since he saw no objection, it was so agreed.  He would now wish to hand over to 
the newly elected Chairman the responsibility for ch airing the rest of the meeting.  He thanked 
Members for their important collaboration during hi s term of Chairmanship of the Committee which WT/BOP/R/98 
Page 4  
 
had been particularly active, after a long period of  docility, with the consu ltations with Ecuador and 
Ukraine.  It was now with pleasure that he handed the Chair.   
24. The Chairman (Mr. Alisauskas) thanked delega tions for their support.  He said that he 
counted on the close cooperation of all Members and the Secretariat, particularly to proceed smoothly 
and effectively during today's meeting and the rest of  his chairmanship.  He would like also to express 
his thanks to Ambassador Mwape.  It would be a difficult task to continue the excellent job he had 
done as Chairman of the Committee.  Ambassa dor Mwape had managed to achieve good results 
during the difficult consultations w ith Ecuador and Ukraine, but he could not be blamed for leaving 
since he would be taking another challenging pos ition.  He wished Ambassador Mwape a great 
success as Chairman of the TRIPS Council.  With these  words, he wished now to turn to the second 
part of the agenda, as modified.  He would like to remind delegations that this item had been included 
in the agenda under request of the delegations of Ca nada, the EU and the Unit ed States.  With this 
brief introduction, he wo uld now like to give the floor to th e representatives of those delegations.  
25. The representative of the United States
 thanked the Chair and all of the Members of the 
Committee for participating in the discussion and a llowing it to go forward.  Members had shared 
interests in transparency  so she looked forward to getting some clarifications on some issues.  She 
would start out by noting that Ecuador had made a commitment in the Committee report.  That specific commitment, as the EU had already noted, was to remove all trade measures for balance-of-
payments purposes no later than the 22 January 2010 a nd to immediately notify the steps taken to the 
Committee.  The United States was concerned that it did not appear that this commitment had been 
fulfilled at this point in time given the recent no tifications from Ecuador which indicated that it was 
currently applying measures for balance-of-payme nts purposes.  The United States recalled that 
during the consultations with Ec uador in both September and Oct ober 2009, it had requested that 
Ecuador provide information on the specific steps taken to fully remove the restrictions by 
22 January 2010 in accordance with its commitment.  Given this request, the United States did not 
understand why Ecuador had not notified to the Comm ittee prior to 22 January that it would not be 
removing all trade measures for balance-of-payments purposes as spelled out in the report.  The action 
taken by Ecuador with respect to not fulfilling its  commitment and not notifying the Membership of 
its intended action prior to 22 January 2010 had signif icant systemic concerns to the United States.  
The United States was pointing this out not only as a matter of concern with respect to Ecuador, but with respect to any country which would do this.  The United States looked forward to hearing from 
Ecuador an explanation on that point.   
26. She also wished to note that beyond the systemic concerns that the United States had, at this 
point in time, the United States did not see a balan ce-of-payments justification for Ecuador's trade 
restrictions.  While the United States understood th at Ecuador was continuing to experience fiscal 
difficulty, trade restrictions would not resolve these difficulties.  This had been made clear by the IMF 
representative during the April 2009 Committee meeti ng.  The United States had consistently noted 
that Ecuador's fiscal difficulties and not the balan ce-of-payments situation had been the primary cause 
of the declining reserves or net foreign assets (NFAs).  Addressing Ecuador's fiscal deficit required fiscal measures not trade restrictions.  Ecuador's NFA decline continued to be driven mainly by 
reductions in central government and social secur ity deposits with the central bank, not by the 
balance-of-payments situation.  It was excess spe nding that continued to cause NFA depletion.   
27. The United States recalled that Ecuador had repeated ly stated that improvement in its external 
conditions was needed if its trade restrictions were  to be removed.  This improvement had continued 
to occur.  There had been major improvements in Ecuador's current account since trade restrictions 
had been imposed in January 2009.  Since that time:  oil prices had nearly doubled, resulting in trade 
surpluses for the last three consecutiv e quarters, compared to a sizable trade deficit in the first quarter 
of 2009;  remittances, while still down from their late 2007 peak, had risen for three consecutive 
quarters, and in the fourth quarter of 2009 were we ll above their first quarter 2009 levels;  exchange 
rates for neighbouring countries, particularly Colo mbia and Peru, had appreciated since January 2009  WT/BOP/R/98 
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roughly 16% and 10% against the dollar, respectiv ely, undermining Ecuador's argument that its 
monetary regime placed it at a trade disadvantage to regional competitors.  As a result, Ecuador had 
experienced a current account surplus during the second and third quarters of 2009, and based on the 
fourth quarter trade balance surplus, likely had done so in the fourth quarter as well.  Moreover, due to 
the continued improvement in the external outl ook, the Ecuadorian authorities were forecasting a 
US$265 million trade surplus for 2010.  The current account improvements indicated that Ecuador's 
balance of payments position had improved significantly since it had imposed trade restrictions in early 2009, and further reinforced the point that the restrictions should be removed. 
28. In the fiscal context, Ecuador's forecasted fi nancing needs for 2010 were high, officially 
estimated at US$4 billion (7% of GDP).  Given Ecua dor's limited access to external financing because 
of its voluntary debt default in  December 2008 and the Ecuadorian private sector's traditionally low 
exposure to sovereign debt, the bulk of Ecuador's fiscal needs would likely be financed by 
government reserves (NFAs).  Therefore, any future fall in NFAs would continue to be driven by 
government withdrawals to meet elevated fiscal spending.  
29. Given this information, the United States sa w no balance-of-payments justification for 
Ecuador maintaining balance-of-payments restric tions.  Additionally, the United States was very 
concerned with the effect that Ecuador's restric tions had had on trade.  Ecuador's 2009 imports from 
the world of products affected by Ecuador's bala nce-of-payments measures had been approximately 
US$2.9 billion.  This represented a significant decrea se as compared to 2008, when Ecuador's imports 
of these products were US$4.5 billion.  Ecuador's 2009 imports from the United States of affected products had also seen a decrease from US$422 million in 2008 to approximately US$291 million.  
Those products covered by the measures which had seen  some of the sharpest decline in imports from 
the world included footwear with a decrease of 69%, textiles and apparel with a decrease of 65%, 
information technology with a decrease of 56%  and building products with a decrease of 49%, 
consumer goods with a decrease of 30% and chemical s with a decrease of 23%.  It was important to 
note, however, that despite the decline in im ports, market demand for these products had not 
significantly decreased.  For textiles and apparel,  market demand had fallen by only 2.5% between 
2008 and 2009.  For footwear, it had fallen by 3.4%, for chemicals by just 0.8%, and for consumer 
goods, by also only 0.8%. 
30. The Ecuadorian Textile Association reported th at its members' revenues had increased from 
US$7.7 million in 2008 to US$11.2 million in 2009.  Likewise, leather shoe sales had increased from 
US$53 million in 2008 to US$69 million in 2009, a nd cloth shoe sales had increased from US$92 
million to US$94 million over the same period.  There were numerous press articles from "El 
Universo", "HOY", "El Telegrafo" that all proclaim ed the benefits of the restrictions to local 
production, quoting local producers on the production increases they had experienced during the past 
year, and their support for extending safeguards against imports. 
31. Separate from the balance-of-payments safeguards, the United States was concerned with 
COMEXI Resolution 550, published on 23 Februa ry 2010, which had changed Ecuador's tariff 
schedule to reflect a mixed tariff of 10% ad valorem plus US$6 per pair specific tariff to be applied to 
28 tariff lines (at the 8-digit level) corresponding to footwear, effective 1 June 2010.  The Ecuadorian 
Government had also announced plans to establish a mixed tariff on imported ga rments and linens of 
US$5.50 per kilo plus 10% ad valorem tariff, replacing the current 30% ad valorem  tariff.  While 
there was no mention of these measures being impl emented for balance-of-payments purposes, these 
steps appeared to signal a desire to maintain  the protection these industries had enjoyed under 
Ecuador's 2009 trade restrictions, and called into question the current  trade restrictions implemented 
23 January 2010. 
32. The United States recalled that paragraph 4 of the Understanding stated that "Members 
confirm that import measures taken for balance-o f-payments purposes may only be applied to control 
the general level of imports...", with limited exceptions for "essentia l products".  The United States WT/BOP/R/98 
Page 6  
 
had had continuing concerns that Ecuador's 2009 measures had not met th is criterion.  Over the course 
of the past year, it appeared that Ecuador's targeted  application of import restrictions on only 8.7% of 
total tariff lines were really a form of industr ial policy, aimed at protecting domestic producers 
covered by these limited tariff lines, not to allevi ate any balance of payments difficulties.  The 
United States wished these concerns to be  reflected on the report of the meeting. 
33. The representative of Canada
 stated that on 11 June 2009 Ecuador had committed to remove 
all import restrictive measures by 22 January 2010.  Unfortunately, this commitment had not been 
fully respected.  Furthermore Ecuador was now requ esting an extension to these measures for at least 
six more months.  Canada was concerned with the se developments especially in light of a lack of 
commitment in this latest proposal to definitely  remove these measures by July 2010.  Canada 
recognized that Ecuador's long period of strong gr owth since 2000 had been interrupted by the global 
financial crisis.  Ecuador was partic ularly vulnerable to the crisis du e to the decline in oil revenue and 
its dollarized economy.   
34. Ecuador had enjoyed real GDP growth of 6.5% in 2008;  quarterly national account figures 
from Ecuador's Central Bank showed that there had b een a slow down in growth that had started in 
the fourth quarter of 2008 and had continued up to the second quarter of 2009.  In 2002, oil revenues 
had accounted for 22% of total government revenues and had reached a peak of 47% of government 
revenues in the second quarter of 2008, which roug hly corresponded with a peak in oil prices in 
July 2008.  As a result of the depressed oil dema nd, oil prices had fallen from their peak of US$126 a 
barrel in July 2008 to US$226 a barrel during the l ast week of December 2008, for Ecuadorian crude.  
Obviously this had had a substantial impact on gove rnment financing sources as, by the first quarter 
of 2009, oil revenues had accounted for only 19% of government revenues.   
35. Given that oil exports accounted for a large shar e of total exports, Ecuador's trade balance had 
worsened considerably once oil prices started declini ng in the second half of 2008.  In fact, Ecuador's 
trade balance had gone from a deficit of 5.9% of the GDP in the first half of 2008 to 11.4% in the 
second half of 2008.  The trade balance, one of the largest components of Ecuador's balance of 
payments had worsened rapidly due to the decrease in  oil prices.  However the trade deficit had also 
been exacerbated by Ecuador's dollarized economy which had prevented the currency depreciation 
normally expected when exports fall in a floa ting exchange rate regime.  A second important 
component of the balance of payments had also been  affected by the global down turn:  remittances 
had declined for six consecutive quarters starting in the fourth quarter of 2007.  All these factors had 
put significant pressure on Ecuador's reserves,  which had declined from US$6.4 billion in 
September 2008 to US$2.6 billion in May 2009.   
36. It was against this negative backdrop, that  Ecuador had invoked Article XVIII:B of the 
GATT 1947.  Since implementing emergency impor t restrictions 14 mont hs ago, Ecuador's 
macroeconomic situation had impr oved dramatically according to Ecuador's Central Bank.  This 
improvement had cast doubt about the need to cont inue using emergency measures.  For example, 
Ecuador's GDP had stabilized according to national acc ounts data.  In the third quarter of 2009, real 
GDP had grown by 1.1% in contrast with a declin e observed for the fourth quarter of 2008 to second 
quarter of 2009 period.  Ecuadorian oil prices had increased by 117% since January 2009.  
Furthermore, this increase had had a positive impa ct on the trade balance as shown in the national 
account statistics.  The retrenchment in domestic consumption in the first and second quarters of 2009 
had also helped limit imports, hence narrowing the trade balance deficit to 4.4% of GDP in the third 
quarter of 2009, down from 11.4% in the second half of 2008.  Remittances, as published by 
Ecuador's Central Bank, had now increased again for the three consecutive quarters ending in the 
fourth quarter of 2009.  In fact, remittances were  now more that 20% above the low experienced in 
the first quarter of 2009.  Ecua dorian foreign reserves, published by Ecuador's Central Bank, had 
remained stable for the past four months.  In fact, since December 2009, the stock of Ecuadorian's 
reserves had stabilized at roughly US$3.7 billio n, a 47% improvement since May 2009.    WT/BOP/R/98 
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37. Article XVIII:B stated that "the contracting pa rty should progressively relax any restrictions 
applied under this section as conditions improve".  Canada further noted that Ecuador had also 
committed to remove these measures by 22 January  2010 consistent with Ecuador's commitment 
undertaken in June 2009 and again reconfirmed in  the report to the Committee as recently as in 
October 2009.  Canada was pleased to note that  in light of Ecuador's most recent economic 
information, the conditions under which Ecuador had imposed import restrictions had improved 
dramatically.  Ecuador had just recently announced that the restrictive import measures would stay in place and be faced out no earlier than July 2010.  Canada was particularly concerned about the 
disruptive effect on normal trade patterns with i mmediate neighbours.  Canada was also concerned 
about the systemic risks of prolonging such measures.  For this reason, WTO Members should closely 
follow the consultations process in this Committee a nd/in honouring the comm itments made.  Canada 
was also concerned that trade restrictive measur es could be used beyond the use intended by the WTO 
agreement.  For example, such measures could be  expanded for protectionist purposes not related to 
balance-of-payments reasons.   
38. The representative of the European Union
 stated that during last year consultations, several 
Members had considered that the difficulties expe rienced by Ecuador should be addressed mainly 
through macro economic policy instead of using trad e restrictions.  Several WTO Members had also 
expressed serious concerns regarding the nature of  Ecuador's trade measures, mainly their rather 
selective product coverage.  However, despite this, Ec uador had decided to shift part of the burden on 
the external account by imposing severe trade restrictions affecting several product groups.   
39. During last year consultations, WTO Members had shown understanding and had 
constructively engaged in a process to reach a mutu ally acceptable conclusion to the consultations.  
This had been done in a clear understanding that Ecuador would remove all remaining balance-of-
payments restrictions no later th an 22 January 2010 as provided by Ecuador's legislation, namely 
COMEXI Resolution 466 and as reiterated by Ecuador itself on several occasions.   
40. However, early this year, Members had learned to  their regret that Ecua dor had decided to use 
balance-of-payments measures for at least another six months, with a gradual removal.  Ecuador's 
unilateral decision to disregard its commitment to remove all balance-of-payments measures by 23 January 2010 was particularly disappointing since it had done so without consulting the 
Committee, which during last year's consultations  had shown great understa nding towards Ecuador's 
difficulties, and a constructive approach in workin g towards a consensus re port acceptable to all 
Members.  The EU also had systemic concerns in  a still fragile stage of economic recovery, where 
WTO Members had engaged in monitoring trade restricting measures. 
41. Last year Ecuador had argued that its situation in the financial and ec onomic crisis had been 
more complicated than that of other WTO Me mbers due to its heavy dependence on oil export 
revenues and remittances from abroad, as well as its dollarized monetary regime.  Outside of trade 
restrictions, Ecuador had noted that favourable developments on oil prices, remittances, and the 
dollar's exchange rate vis-à-vis its main trading partners were key to a ddressing its balance-of-
payments problems. 
42. In fact, already in September 2009 notable improvements in Ecuador 's overall economic 
situation and the balance-of-payments had been  reported in document WT/BOP/G/17 and in the 
statement delivered by Ecuador in the Balance-o f-Payments Committee.  Since then, oil prices and 
foreign demand for Ecuador's expor t products had further increased.  Given its significant share in 
worker remittances and exports for Ecuador, the r ecovery in the United States in particular had 
contributed to pulling the Ecuadoria n economy to more robust growth. 
43. As Ecuador had noted last year, crude oil played  a particularly important role in its economy, 
accounting for around 20% of GDP and over 60% of export earnings.  Following sharp price declines, oil prices had rebounded strongly as from spring 2009.  Indeed, the oil price estimates that Ecuador WT/BOP/R/98 
Page 8  
 
had used last year when planning its fiscal adju stment had proved very conservative, and a strong 
recovery in prices had provided a considerable boost to Ecuador's export revenues.  Further increases 
were widely expected in 2010. 
44. In September Ecuador itself had noted that its  balance-of-payments showed a positive trend, 
and that the critical level of the economy's liquidity had improved.  It had been also noted that 
Ecuador's balance of payments, international r eserves and the trade balance had seen significant 
recovery in particular from the middle of 2009.  Indeed, statistics by the Central Bank of Ecuador 
showed that after the low of May 2009, Ecuador's  "Monetary Reserves of Free Availability" (RILD) 
had seen strong recovery, reaching by the second half of  2009 levels that were  higher than in 2007 
(i.e. before the financial crisis).  Towards the end of 2009, foreign reserves had therefore reached a 
higher level than at any point in the last 10 year s (bar 2008, an exceptional year for oil prices), and 
could no longer be considered under threat of a "serious decline". 
45. In conclusion, it was clear that the external  developments affecting Ecuador's economy had 
been much more favourable than had been foreseen at  the start of the consultations in early 2009.  
Ecuador's stated objective to "cool off an economy overheated by expenditure" seemed to have been 
reached several months before 22 January. 
46. He would now like to pose some questions to Ec uador:  i) Did Ecuador consider that it had 
complied with the commitments it had taken in last  year's consultations?;  ii) How could Ecuador 
explain that better-than-foreseen developments in terms of oil prices, global demand for Ecuador's 
exports, the economy's liquidity, international reserves,  the trade balance and the exchange rate of the 
U.S. dollar – coupled with big reductions of imports due to the trade restrictions – had not allowed it 
to let the balance-of-payments trade restrictions e xpire in line with its repeated assurances from last 
year? 
47. The EU had noted with grave concern frequent public comments by high-level representatives 
of the Ecuadorian government that the objective of th e balance-of-payments restrictions had not been 
only to correct the balance-of-payments problem, but also to protect national strategic sectors such as 
footwear, textiles and ceramics. 
48. Finally, the EU shared the concerns expressed by the United States about the recent COMEXI 
Resolution 550. 
49. The representative of Japan
 noted that Japan understood that balance-of-payments measures 
were allowed by GATT Articles, but had a concer n about how these measures had been implemented 
from a systemic point of view.  So, from that point of view Japan would like to closely monitor the 
removal of the measures as well as the st eps taken to abbreviate these measures. 
50. The representative of Australia  said that her country, too, was interested in hearing from 
Ecuador what was happening.  Australia unders tood the problems that Ecuador had and looked 
forward to hearing from them about their recent notif ication.  Australia, too, as Japan and others, had 
systemic concerns about the commitment undertak en and was interested in hearing more from 
Ecuador.  
51. The representative of Ecuador  stated that Ecuador was ready to work with the Chair and with 
Members regarding the issues raised.  As he had said at the start, Ecuador would refer extensively to 
its situation and explain its notif ications under item 2)b of the agenda.  He was, however, surprised 
that some of the Members who had convoked this m eeting had the worst record of prompt compliance 
in the organization.  So he did not think that they sh ould set precedent or try to set precedent.  On the 
subject of notifications, he wished to stress that COMEXI resolutions were published in the Official 
Gazette and therefore it took some time for them to be effective.  Ecuador was, however, within the 
time limits provided for by paragraph 9 of the U nderstanding.  Ecuador w as also surprised that  WT/BOP/R/98 
 Page 9 
 
 
Members had brought up measures that had nothing to do with the discussions that were been held in 
the Committee.  
52. He wished to reaffirm that Ecuador was r espectful of its WTO commitments and that any 
tariff measure taken would respect Ecuador's bindi ngs.  On the same point, Ecuador was surprised 
that the issue of compliance had been brought up, b ecause Ecuador also had some issues that it could 
bring up to the Committee.  For example, the milli onaire bailouts to banks and industries that some 
Members who had convened the meetin g had implemented, and so far not yet notified to the WTO.  
So if it was a matter of starting a discussion on other measures that had nothing to do with the 
Committee, Ecuador had many things to say, too.   Ecuador would make a broad statement with 
figures on item 2)b of the agenda but, before concludi ng this intervention, Ecuador wished to express 
that it could not accept to be used to set precedents, express systemic concerns, or receive lessons 
about protectionism when some of those Members we re the ones that applied the widest protectionist 
policies globally.  He would also like to recall that  some of these Members had the worst record on 
economic management.  And that, together with the disastrous policies of the IMF, they had been the 
direct cause of the global economic crisis that ha d forced Ecuador back to  the Balance-of-Payments 
Committee.   
53. The representative of the United States  said that she sought just one clarification from 
Ecuador.  She wished to know if Ecuador could cl arify whether or not it believed it was in compliance 
with the commitment to remove a ll balance-of-payments restriction measures by 22 January 2010.  A 
simple yes or no or some explanation would be helpfu l.  She thought that Ecuador had indicated that it 
believed that they were in compliance, but th e United States was having difficulties understanding 
how that was the case and she would like a clarification on that point.  
54. The representative of Ecuador  said that, in his next intervention he would make ample 
comments on the issue.  Here, he was not going to affirm or deny what had been asked.  
55. The Chairman  thanked all Members for their comments and questions, and stated that the 
Committee took note of the comments made. 
56. The representative of Venezuela  congratulated the Chairman for his election and said that he 
wished to make some comments with  respect to systemic issues.  In his view, Ecuador had fulfilled all 
of its commitments.  Ecuador had published a schedul e for the elimination of the measures;  the rules 
stated that these measures could always be modified  due to changes in the balance of payments.  It 
was important to remember that the Understanding contained language such as " A Member would 
try" and "as soon as possible".  This situation ha d to do with human beings and not just with 
merchandise, such as textiles or shoes.  Ecuador's  Constitution was clear when it made reference to 
the need to maintain equilibrium and sufficien t and sustainable growth, as well as the need to 
overcome poverty, and reduce unemployment.  It w ould seem that Ecuador had opted for the best 
option.  Ecuador was a country that relied on the U. S dollar as its currency, and one could not say that 
the dollar had been solid lately.  So maybe the s ituation had improved in nominal but not in real 
terms.  The EU had said that the situation for o il prices had improved, but he wondered what it had 
meant by that:  improved with respect to what?  Improved from 2008 or improved from 2009?  
57. Ecuador, Argentina and India, supported by Venezuela had submitted a proposal in the 
General Council, to review the stimulus pack ages adopted precisely by the countries which had 
requested consultations.  Those countries had said th at those measures were temporary, but they had 
not eliminated them yet.  It would be good to  know how much money had been spent under those 
stimulus packages, to save banks.  He would also like to have those Members explain what they 
understood by expenditure:  e.g., if expenditure was spending to improve the education system.  For a 
long time, the United Nations had differentiated be tween expenditure and investment.  Since the 
1990s, Latin American countries had been sold the ar gument of fiscal austerity, which had resulted in 
widening poverty.  So when one heard talk of mora lity and systemic interests, the first step was to WT/BOP/R/98 
Page 10  
 
look at the rules.  The Understanding recognized that the trade measures taken by developed countries could have implications for the economy of develo ping countries.  The stimulus packages had had all 
those poverty effects.  Developing countries had no tools to address these measures.   
58. The representative of Cuba
 noted that some Members were very concerned about the systemic 
implications of the extension of the measures th at Ecuador was requesting for legitimate reasons.  
Some of those Members, however, were involved in DSB disputes that had lasted twice, three and up 
to six times the time of the measures adopted by Ecuador.  In some cases, six or seven years had 
passed, and the rulings for those disputes had not ye t been implemented.  Ecuador should be given the 
right to notify its measures before expressi ng any preoccupation with respect to them. 
59. The representative of the United States  stated that she wished to clarify the U.S. position.  The 
United States was indeed familiar with the proposal by Ecuador, Argentina and others in the General 
Council.  The United States was happy to discuss the proposal in the Trade Policies Review Body, where it was appropriate.  Reviewing the documen t that Venezuela had quoted she did not see any 
mention to stimulus packages.  She thought it was im portant to note that right now it was balance-of-
payments notifications that were being discussed;  that was what this Committee was supposed to be 
discussing and the United States looked forward to continuing that discussion.  The United States was 
very thankful to Ecuador for the comments that  they had made under this item and appreciated 
Members' ability and willingness to at least engage in this discussion.  The United States looked 
forward very much to continuing that discussion on this specific notification.  
60. The Chairman 
proposed turning to the next item of the agenda, namely the notifications made 
by Ecuador to Members contained in documents WT/BOP/N/74 and WT/BOP/N/75.  The 
notifications submitted by Ecuador  were with respect to the measures adopted through COMEXI 
Resolutions 533 and 549.  Resolution 533 had been published in the Official Gazette N°109 of 15 
January 2010.  He would like to turn to the de legation of Ecuador to provide the comments and 
further information which respect to the natu re and the scope of the measures notified.  
61. The representative of Ecuador  stated that, indeed, by the notifications contained in documents 
WT/BOP/N/74 and WT/BOP/N/75 of 23 February 2010, Ecuador had notified to Members of the 
Committee on Balance-of-Payments Restrictions CO MEXI Resolutions 533 and 549, published in the 
Official Gazettes Nos. 109 and 128 of 15 January 2010 and 11 February 2010, respectively.  He would make a brief description of these resolutions  beginning with Resolution 533.  Through this 
resolution COMEXI had decided to reduce by 10% as of 23 January 2010 all tariff surcharges set by 
concept of balance-of-payments measures by COME XI Resolutions 466, 468,  487 and 524.  Hence, 
as from that date, 10% of the measures had been dismantled.  Resolution 549 went beyond Resolution 
533 and set a timetable for the dismantling of the measures taken by Ecuador for balance-of-payments 
purposes.  The schedule was as follows:  effective 23 March 2010, an increase in the percentage of 
reduction by an additional 30%.  So, as from the follo wing day, 40% of all measures would have been 
dismantled in a horizontal way.  As of 23 May 2010 , the percentage reduction specified in Resolution 
549 would be increased by an additional 30%, and as of 23 July 2010, the percentage of reduction 
referred would be further increased by an additiona l 30%.  This meant that by 23 July 2010 the 
measures would be fully dismantled.  
62. Ecuador was meeting its commitment to remove the measures.  Tariff surcharges were been 
dismantled gradually.  This was to avoid a flood of  imports that would have brought back a balance-
of-payments problem in Ecuador and forced it to re turn to this Committee.  At the end of 2009, the 
deficit in Ecuador's total trade balance was of US $132 million on an annual basi s.  Although there had 
been a 19.9% contraction in total imports with resp ect to 2008, this reduction had not been conducive 
to an overall improvement of the balance of payments , as total exports had fa llen by 25.7%.  This fall 
had been due mainly to the sharp 40.3% reduction in  oil exports.  The oil trade balance from January 
to December 2009 had posted a surplus of US$4, 631 million, that had been US$3,800 million lower 
than in the same period in 2008, when it had reach ed US$8,455 million.  While the average price of  WT/BOP/R/98 
 Page 11 
 
 
Ecuadorian crude oil had presented an upward trend since March 2009, it had not reached the levels 
observed in 2008.  The price had stood at US$52.6/barrel in January-December 2009 while it had been US$92.8/barrel in 2008.  Oil exports ha d fallen by 6% in volume terms in 2009.  
63. He wished to explain a bit more Ecuador's de pendence on oil prices.  An average price of 
US$65.9/ barrel had been estimated for 2010.  Ec uador's oil price was the price of West Texas 
Intermediate benchmark crude less a punishment fo r the country's oil quality, due to the fact that 
Ecuador's exports are primarily of heavy oil.  A scena rio with a US$64.9 price of oil per barrel, that is 
a dollar less than the estimated price for 2010, wo uld generate a trade balance deficit of US$107 
million.  A similar scenario could be obtained if oil production fell to an estimated at 122 million 
barrels by 2010.  That was the dependen ce Ecuador had on the price of oil.   
64. In 2009, the trade deficit not including oil had been US$ 2,582 million lower than in 2008, as 
a result of a 18.2% contraction in non-oil imports.  At a monthly level, the trade balance posted 
deficits again in September, November and December 2009, but lower than those observed in 
September 2008 and March 2009.  In December, tota l exports had reached US$1,422 million, which, 
together with an import level of US$1,430 million ha d resulted in a US$8 million deficit.  The value 
of both oil and non oil imports had recorded higher levels in Decemb er.  In the first case, this had 
been associated with additional foreign purchases and higher imports to face a situation of national 
energy emergency.  In the second, because of incr eased imports of transport equipment, construction 
materials and consumer durables.  
65. Taking as reference the indicators and assumptions used to prepare the state budget, it was 
estimated that the trade balance would close with a slight surplus in 2010.  And here he would differ 
from the figures cited by the U.S. delegation, since the Central Bank estimated that the surplus would, 
at most, reach US$100 million.  The estimated surplu s in the trade balance did not reflect the great 
strength of the external sector but rather a modest recovery after the impact of the economic crisis the country had faced since mid-2008.  This crisis ha d affected the main export products:  oil, shrimp, 
food, flowers, and other metal goods, and also ha d lowered remittances from abroad of Ecuadorian 
emigrants.  Notably, the improvement in the bala nce of payments estimated  for 2010 included a small 
trade balance surplus, as mentioned previously.  This estimate depended on favourable oil prices.  
Ecuador's high dependence on oil e xports meant that a slight variation in oil prices resulted in 
significant changes in the balance of payments.  T hose were the figures cited a few minutes ago.  The 
high volatility of the factors used to assess the pe rformance of macroeconomic indicators required 
Ecuador to be highly prudent in managing its trad e policy decisions.  The Understanding on Balance 
of Payments Provisions of the GATT 1994 suggested  a gradual relief of the measures imposed to 
restrict trade.  However, the evolution of the globa l financial crisis had con tinued to affect negatively 
the economy of Ecuador through the early months of this year.  Therefore, the assumptions and estimates concerning the restoration of equilibrium  in the balance of payments had only been 
available to the Ecuadorian economic authorities at the end of the period prescribed for the 
implementation of the measures.  It was in this c ontext that Ecuador had implemented without delay, 
as early as possible, a schedule for the dismantlement of the measures.  The result of the trade balance 
highlighted before had shown that a progressive elim ination of the restrictions taken for balance of 
payments purposes was the most adequate course of action.  As noted above, these measures would be 
dismantled gradually to avoid an avalanche of impor ts, which would have a negative effect on efforts 
by the Government of Ecuador to restore equilibrium levels that would ensure the level of liquidity in 
the economy required to support its dollarization mone tary scheme, foster the stability needed to 
overcome the crisis and con tinue with Ecuador's legi timate development goals.  
66. Ecuador had shown throug hout this process that it was completely transparent in its actions.  
Ecuador's situation had won the support of Member s of this Committee and he  hoped that this support 
would continue.  Ecuador reiterate d its willingness to respond during this meeting to questions that 
would arise linked to the adoption of these resolutions.  Finally, he would like to recall that the 
consultations held by Ecuador in this Committe e after having invoked Article XVIII:B of the GATT WT/BOP/R/98 
Page 12  
 
1994 had been concluded and that there was a repor t of the Committee which had been presented to 
the General Council. 
67. The Chairman
 stated that he would like now to open the floor to Members to give them the 
possibility of asking questions or making observations with the respect of this part of the agenda.  
68. The representative of Brazi l thanked Ecuador for its no tification WT/BOP/N/74 which 
informed Members about its decision to reduce all import charges imposed due to balance-of 
payments purposes by 10% by 23 January.  Brazil would also like to thank Ecuador about their 
notification WT/BOP/N/75 which informed Members about the establishment of the schedule to eliminate all those surcharges in a gradual way by 23 July this year.  Brazil recognized Ecuador's 
legitimate right to take measures to safeguard its ba lance-of-payments situation.  At the same time, 
Brazil appreciated Ecuador's efforts to comply with the recommendations contained in the 
Committee's Report WT/BOP/R/92/Rev.1.  By  September 2009, Ecuador had replaced the 
quantitative restrictions applied for price-based me asures in accordance with  those recommendations.  
Moreover, Brazil considered that Ecuador had co mplied with its transparency commitments by 
informing the Committee about the situation of its balance-of-payments and the steps taken to 
eliminate the restrictive measures.  Brazil noted, how ever, that the original time table for elimination 
of the restrictions could not be observed.  Brazi l would like to thank Ecuador for sharing with the 
Committee the reasons why it had not been possibl e to eliminate all the measures by 22 January as 
originally stipulated.  Brazil now invited Ecuador to continue to regularly informing Members about 
the gradual elimination of the restrictions.  Braz il was pleased to note that the balance-of-payments 
situation of Ecuador had e volved positively and expected that all the restrictions could be faced out 
according to the newly established time table.  
69. The representative of the Dominican Republic
 said Ecuador had been forced to introduce 
measures to protect the balance-of-payments ba sed on Article XXVIII:B of GATT 1994, affecting 
8.7% of total tariff lines.  The introduction of these me asures had been due to the deterioration in its 
trade balance registered in 2008 and projected for 2009 due to a the brutal fall in their exports caused 
by worsening terms of trade resulting from the worst in ternational financial crisis of the past 80 years.  
The measures had been directed at bringing the trad e deficit to a sustainable level over the medium 
term, thus avoiding a more significant loss not only in reserves, but also in its internal liquidity given 
its lack of monetary policy.   
70. The result for 2009 had shown a substantial impr ovement in the trade balance due primarily 
to future oil sales operations, an allocation of sp ecial drawing rights from the IMF and from the Latin 
American Reserve Fund.  The trade balance had reac hed the projected sustaina ble medium-term level, 
although this level not only showed a reduction of imports but also the continuing fall in exports due 
to deteriorating terms of trade and reduced export vol umes.  It was true that Ecuador's trade balance 
had improved substantially, but there had been a 25% drop in exports, higher than the 19.9% 
contraction of its imports.  As a result, domestic  monetary liquidity had shrunk in real terms, 
negatively affecting the economic performance of th e productive sectors, leading to a 1% fall in real 
GDP, to an increase in unemployment to 9% and to a level of underemployment exceeding 50% according to figures provided by ECLAC.  Also, th e nonfinancial public sector deficit had been of 
barely 0.38% of GDP by one estimate, while the more developed countries had public sector deficits equivalent to 10% of their GDP and could issue cu rrency to provide liquidity to their economy, while 
Ecuador lacked that possibility.   
71. Although Ecuador had been able to achieve its  proposed trade balance goal in 2009, the 
incertitude regarding the international economic si tuation called for an economy without monetary 
policy to exert caution and, as developed economies were doing through their stimulus programmes, 
to ensure that there was no contraction of liquidity, so as to safeguard the wellbeing of its citizens.  It 
was hence important to defend reserve levels and a void a contraction in the domestic money supply.  
In that context, the Dominican Republic we lcomed COMEXI Resolution 549 authorizing a  WT/BOP/R/98 
 Page 13 
 
 
progressive dismantlement of the surcharges establis hed by 23 July 2010.  The Dominican Republic 
wished the best success to Ecuador's authorities. 
72. The representative of Peru  thanked the Ecuadorian delegation for the information presented in 
connection with its recent notifica tions and with respect to the measures it maintained on balance-of-
payments grounds.  This certainly was consistent w ith the transparency with which Ecuador had acted 
throughout its consultation process on this Committee, which Peru welcomed.  Since the start of the 
application of the safeguard measures in January  last year, Peru had maintained an ongoing and 
constructive dialogue with Ecuador  as neighbours and trading partners that shared the common 
objective of achieving balanced and comprehensive development.  On several occasions, Peru had 
expressed concerns about the impact these measure s had on Peru's exports and on overall bilateral 
trade.  In this respect, Peru appreciated the responsiveness shown by the Ecuadorian authorities and 
their willingness to collaborate with a view to fi nding a mutually satisfactory solution.  Peru 
recognized the difficult and complex economic situati on that had led Ecuador to adopt and maintain 
protective measures.  Peru was convinced that an  improvement in Ecuador's balance-of-payments 
situation as had been the case in recent months would result in the lifting of all its restrictive 
measures.  Therefore, Peru welcomed the commit ment by the Ecuadorian authorities to progressively 
relax the measures imposed through a gradua l reduction timetable as presented in COMEXI 
Resolution 549.  In this spirit, Peru urged the Ec uadorian authorities to respect this timetable and the 
new commitments made in this Committee, especially  now that the conditions that led Ecuador to 
implement safeguard measures were be ing overcome to the satisfaction of all.  He wished to reiterate 
the full readiness of his authorities and his delegation to continue the constructive dialogue that had 
characterized the process of consultations with Ecua dor, and hoped that their plight was resolved soon 
for the benefit of all. 
73. The representative of Chile  thanked Ecuador for the compre hensive and detailed report that 
had been presented.  As others had said, this was in  line with the full transparency Ecuador had shown 
in this process that had begun last year.  Chile ha d systemic concerns which had been expressed by 
several other Members in the previous item of the agenda, so it would now focus on the issue of 
notifications by Ecuador this year.  Chile's c oncern, as it had been expressed to the Ecuadorian 
authorities in bilateral contacts, was to see these measures permanently removed and he would wish to 
stress the word permanently.  In th is sense, Chile would like some clar ification of some aspects of the 
COMEXI resolutions, particularly Resolution 549.  Chile's queries could be summarized in three 
points:  
• First, and as noted by the delegate of Ecua dor, from tomorrow the percentage of reduction 
would be increased by an additional 30%.  Ch ile wished to know how that reduction would 
operate, and in which situation would traders find themselves as of tomorrow.  Would there be a special publication or a special COMEXI decision, or would the resolution be simply 
applied by Customs,  
• Second, Ecuador had noted that, as from tomorrow 40% of the restrictions applied last year 
would have been dismantled.  Chile would like to  have the same security with respect to the 
situation following 23 July 2010.  This is, that  100% of the restrictions applied last year 
would be dismantled on that date; 
• The third point related to the monthly assess ments on the performance of the balance-of-
payments that and ad hoc group COMEXI is sche duled to present to the Board.  Chile wished 
to have further details on this ad hoc group including the group's composition and the 
variables to be used by that group. 
74. The representative of China
 said that China was glad to see that the economic conditions in 
Ecuador had improved since mid-2009.   China appreciated that Ecua dor had replaced all quantitative 
restrictions in September 2009 as committed during the consultations.  At the same time, China would WT/BOP/R/98 
Page 14  
 
like to point out Ecuador's commitment to remove all trade measures no later than 22 January 2010, 
which had been and important point to reach c onsensus among Members during the consultations.  
Now China welcomed the decision of COMEXI to  phase out the restrictive measures applied for 
balance-of-payments purposes and hoped that all trad e measures would be removed by 23 July 2010 
as stated in notification WT/BOP/N/75.  
75. The representative of Cuba
 wished to thank Ecuador for the regularity with which it had 
provided information to the Committee regarding th e measures it had had to apply.  Throughout the 
process, Ecuador had shown total transparency providing the Committee with notifications and 
engaging in consultations.  Her delegation considered legitimate the application of safeguard 
measures by Ecuador.  Balance-of-payments measur es were a good trade policy instrument negotiated 
in this house to be used when there were valid  motives or in case of unforeseen circumstances, 
provided the basic principles and disciplines of the GATT 199 were respected.  This had been the case 
for Ecuador.  Cuba wished to reiterate it thanks for the information provided. 
76. The representative of the Republic of Korea , stated that his delegation was sorry that Ecuador 
had extended the measures it had committed to remove  this January.  He hoped that, as the world 
economy picked up steam, Ecuador would not need to apply any more measures.   
77. The representative of India  stated that the intervention made by Ecuador had specifically 
pointed out to the economic situation and how Ecuador had actually tried to address it and to 
implement a phase-out period for their measures.  India appreciated the fact that a country like 
Ecuador which was dependent on a single commodity was able to face such problem.  India wished 
just to clarify whether this phase out included the specific duties that had been introduced as part of 
the safeguard measures that were in place.  He pr esumed that it was the case, but just wished a 
clarification on that.   
78. The representative of Venezuela  thanked Ecuador for the transparency with which it had 
acted in this case.  Ecuador had been requested to give assurances, but the Understanding did not 
mention any conditionality for Members to make use of their rights under the Agreement.  The 
Understanding did not specify anywhere that a Memb er is obliged to dismantle the measures applied 
in a specific period of time, only as its situation impr oves.  So Venezuela would be satisfied that if 
Ecuador's economic situation improves, as it hoped it w ould, Ecuador would be able to dismantle the 
measures. 
79. The representative of El Salvador  thanked Ecuador for the notifications, by means of which a 
progressive calendar for the elimination of the meas ures adopted for balance-of-payments reasons had 
been presented.  El Salvador was thankful to Ec uador for the total transparency with which it had 
acted throughout this process and also greeted the efforts made to dismantle the measures 
implemented in agreement with its legitimate development objective.  This had been done in spite of 
the difficult and complex economic situation faced by  this country and consid ering that, as had been 
indicated by the delegate of Ecuador, it continued faci ng the effects of the international financial crisis 
this year. 
80. The representative of Colombia  thanked the delegations that had preceded Colombia for the 
explanations and information they had provided.   Colombia had both systemic and commercial 
interests in this subject.  Colombia had explaine d its commercial interests previously and they had 
also been the object of bilateral discussions with Ecuador.  Colombia's systemic interests were to 
assure that Members maintained the commitments made and that measures taken for balance-of-
payment purposes be always adopted in accordance to the rules.  Colombia w as also interested in 
finding a way out for Ecuador that would allow it to  fulfil its commitments in sustainable conditions.  
Given the transparency that Ecuador had shown in this session and its disposition to respond to 
questions by Members, Colombia wished to ask Ecuador how it had arrived at the conclusion that 
only an initial 10% reduction of the notified tariff me asures would be viable.  Colombia also wished  WT/BOP/R/98 
 Page 15 
 
 
to know how the calendar of sub sequent reductions had been dete rmined and which had been the 
criteria used by the Ecuadorian authorities to dete rmine the detail of the progressive reductions that 
had been announced.  Finally, Colombia also wish ed to obtain information with respect to the 
implementation of the calendar of reductions, since it had noticed that in its notification, Ecuador had 
indicated that it would follow its own evaluations with  respect to this implementation.  In this sense, 
Colombia would like to join in the questions previously posed by the delegation of Chile. 
81. The delegation of Panama  thanked Ecuador for the inform ation provided to the Committee, 
but it could not but remind Members of the commi tment acquired by Ecuador to eliminate all 
commercial measures taken for balance-of-payments pur poses no later than 22 of January 2010.  As a 
result of the imposed measures commercial inte rchange between Panama and Ecuador had been 
seriously affected, falling by 26%.  In spite of th e modifications carried out, the extension of the 
duration of the restrictions would generate unn ecessary damage to Panamanian exports, and would 
continue to be a worrisome situation.  Panama was aware of the balance-of-payments problems that 
Ecuador had faced and of the right it had to take measures to redress it.  Nevertheless, as a country 
severely affected by these safeguards, Panama wished  to express its preoccupation with respect to the 
negative impact these measures had had on Panamanian  exports of textiles and footwear towards the 
Ecuadorian market.  Panama wished to renew its re quest that Ecuador confirm and provide certainty 
on the implementation of the stipulated date include d in the notified calendar of definitive elimination 
of the measures. 
82. The representative of Trinidad and Tobago  stated that his country appreciated the information 
supplied by Ecuador on this issue and wished them to  keep up the deadline that had been established.  
83. The representative if the EU  thanked Ecuador for the info rmation and the explanations 
provided, which had been helpful in terms of providing a much more clear assessment of the 
notification.  In any case, the fact remained that  the commitment Ecuador had taken last year to 
remove these measures by 22 January 2010 had not been conditional on any economic assessment in 
Ecuador.  In other words, that commitment had been unconditional.   
84. The measures which Ecuador had now notifie d in documents WT/BOP/N/74-75 should be 
assessed in accordance with Ecuador' s current economic circumstances.  According to the EU's 
assessment, Ecuador's much improved macro economic situation implied that there were certain doubts as to whether the conditions that Ecuador had u sed to justify its balance-of-payments measures 
during last year consultations were still in place.  In  this context, he would like to recall that balance-
of-payments restrictions must be removed when the conditions no longer justify their maintenance.  In 
any case, as the Committee had heard, Ecuador had not translated better-than-expected external 
developments to a permanent removal of its ba lance-of-payments measures and the EU found that 
disappointing.   
85. Despite the external developments, Ecuador's fiscal account still seemed to be under pressure, 
probably in part due to the reluctance of the Ecuadorian authorities to implement cuts in public 
spending as announced in the consultations held l ast year.  And therefore, the burden of the 
adjustment process was still being passed on to Ecuador 's trading partners.  The continued use of its 
balance-of-payments measures had been a huge burde n for a number of exporters.  And in fact, 
questions were now being asked as to whether the in tention of Ecuador was to permanently shut some 
of these operators out from its market;  the fre quent public comments by high level Government 
representatives unfortunately reinforced such concer ns.  Such comments raised concern as to possible 
other motives behind the measures, in addition to onl y the safeguard of the balance-of-payments.  
Furthermore, these concerns were also reinforced  by information according to which some of the 
mentioned strategic sectors had been  targeted by several other measures, in addition to the balance-of-
payments restrictions.   WT/BOP/R/98 
Page 16  
 
86. Apart from the effect on Ecuador's individual tr ading partners, trade restrictions obviously 
raised serious systemic concerns, as it had been  mentioned on several occasions.  One had to be 
particularly mindful that the commitments any Me mber took in front of the WTO Membership were 
respected fully.  In this context,  he wished to note that, as several delegations had mentioned, the 
phasing out of measures should happen prior to an ev entual committed removal date instead of after 
it.  In any case, Ecuador had continued to impose import restrictive measures at its own discretion 
without consulting WTO Members in advance and wit hout providing proper justification for doing so.  
The EU was not sure whether this was totally in line either with the conclusions of last year's report or 
with the balance-of-payments Understanding.  The Committee should undertake a proper assessment 
of whether Ecuador's implementa tion of its balance-of-payments measures beyond 22 January 2010 
was justified.  Under WTO rules, this was not fo r Ecuador alone to decide, but for the Balance-of-
Payments Committee to do so.   
87. The EU noted the appreciation of many delega tions for the information and clarity that 
Ecuador had provided.  In this context, the EU considered that, in order to establish whether the 
measures that Ecuador had notified in documents  WT/BOP/N/74-75 were justified, it would be 
necessary to hold formal consultations in this Ba lance-of-Payments Committee, as provided for in the 
Understanding.  So unless Ecuador was prepared  to discontinue applying the measures with 
immediate effect, the EU encouraged the Chair and th e Secretariat to engage in contact with Ecuador 
so as to establish a proper starting date for formal consultations.  This, in the EU's view was necessary 
because the General Council, following last year cons ultations had in effect agreed to allow Ecuador 
to implement its balance-of-payments measures, but only until 22 January 2010.  And going beyond 
that date required another process of consulta tions in the Balance-of-Payments Committee where 
Ecuador would have to justify and show to the Me mbers that it still had justification to use those 
measures.  And only a favourable conclusion to th at effect by the Balance-of-Payments Committee 
would in fact give Ecuador justification for the m easures that had come into effect as of 23 January 
this year.  Finally, the EU would welcome some clarification by Ecuador on the following issues.   
• First:  How was the balance-of-payments situati on expected to change in the course of this 
year so as to fully allow for a full removal by July of this year?  Had the EU understood correctly that most of the remedy for Ecuador would be provided by an increase in oil prices and was there an expectation that oil prices should be restored to the level seen in the middle of 2008 so as to allow Ecuador to restore its balance-of-payments situation to a sustainable 
level? 
• Second:  Had Ecuador's monetary reserves not already increased to above the levels seen 
before the outbreak of the financial crisis, thus removing the justification for trade restrictions 
on the basis of a serious decline in its monetary reserves?  Like others, the EU would be interested in seeing written clarifications from Ecuador, including the global reports by the 
Minister of Industry and Competitiveness mentioned in COMEXI resolutions.  
• Then, could Ecuador provide more details of  its policy mix to address these balance-of-
payments difficulties?  The EU knew that Ec uador had mentioned a number of different 
policy measures to remedy the situation in last year's consultations;  the EU would welcome 
more information on the success in implementing those.  
• Could Ecuador provide more details of its policy mix to address its balance-of-payments 
difficulties?  In particular, what non-trad e policy measures announced in last year's 
consultations had been implemented? 
• Could Ecuador provide some evidence that the "import surge" it had mentioned several times 
would have indeed been likely to materiali ze if the measures would have been removed on 
22 January 2010?  WT/BOP/R/98 
 Page 17 
 
 
• Could Ecuador comment on the public st atements by high ranking Government 
representatives which would seem to suggest that it s trade restrictions had been kept in place 
so as to protect domestic producers in "strategic" sectors from foreign competition? 
• Did the fact that a COMEXI ad hoc group would periodically assess the balance-of-payments 
situation (as provided in COMEXI Regulation 53 3) mean that the gradual reduction schedule 
foreseen in COMEXI Regulation 549 might still be extended? 
88. The representative of the United States reiterated her appreciation for the transparency that 
had been provided by Ecuador over the course of the past year.  The United States also greatly 
appreciated the new information that Ecuador ha d provided today on its ec onomic situation and the 
two notifications it had submitted to the Committee.  Like others as well, the United States had some 
concerns with the uncertainty of the elimination of  the measures by 23 July 2010.  There had been 
some discussions today that the former consulta tions had concluded, but these consultations had 
resulted in the specific commitment that measures would be removed by 22 January 2010 and those 
measures were still currently in effect.   
89. Since Resolution 466 which had been notified last  year, had only implemented trade measures 
for balance-of-payments purposes for one year until  22 January 2010, the two resolutions that had 
been notified were indeed new measures.  A nd being that the Committee was looking at new 
measures, and while appreciating the information provided today, the United States believed some 
written justification needed to be provided for the new measures.  The United States noted that 
paragraph 10 of the Understanding pr ovided that a notification may be reviewed by this Committee to 
clarify specific issues raised and to examine whether consultations unde r Article XVIII:B were 
required.  Being that these were new measures, th at there were questions unresolved on whether or 
not the commitment to remove the measures by 23 July 2010 was to be taken seriously, the United 
States believed that is was necessary to start a new consultation process.   
90. The United States would appreciate some clarifications from Ecuador on its thoughts on 
further consultations.  The United States would requ est that new consultations be started and that 
Ecuador submit a new basic document as called for in  paragraph 11 of the Understanding.  The basic 
document would describe Ecuador's current balance- of-payments situation, provide a description of 
the measures and their effects and of the measures taken since the last consultations that liberalize the 
restrictions, as well as of the plan for the elimination of the measures. 
91. The representative of Canada  expressed his thanks to the delegation of Ecuador for the 
information provided as well as the transparency that it had shown until now.  Canada also appreciated the comments provided under agenda item 2)a.  With regard to next step, Canada would 
request that Ecuador commit to a full elimination of  the restrictive measures by July 2010 as stated in 
COMEXI Resolution 549.  Consistent with its ph ase out plan, Canada welcomed Ecuador's assurance 
that it would implement a 30% reduction in tariff surcharges by tomorrow.  Additionally, Canada 
supported that new consulta tions be held as suggested by the EU and United States with regard to the 
measures that Ecuador had in place.  In Canada's view, new consultations were warranted given that 
an explicit commitment by Ecuador to remove th e measures had been included in the conclusion 
meeting of June 2009.  As outlined earlier in Canada's  intervention, the most recent data suggest that 
Ecuador's economic situation had gr eatly improved since the imposition of restrictive measures.  In 
order for this Committee to be as transparent as possi ble, the latest economic data should be presented 
in a new round of consultations.  
92. The representative of Ecuador
 stated that Ecuador was not re questing new consultations.  He 
wished to address some of the issues raised in th e questions posed.  With respect to the questions 
raised by Chile regarding assurances for the disman tling of the measures on 23 July, he stated that that 
was a commitment published in Ecuador's Official Gazette;  it was a commitment made by the 
Ecuadorian authorities.  It had also been asked about  the composition of the ad hoc group:  the ad hoc WT/BOP/R/98 
Page 18  
 
group was composed by the ministries which had been  following up this issue.  First, COMEXI, the 
Ministry of Economy, the Central Bank of Ecuador , the Ministry of Industry and Competitiveness and 
the Ministry of External Relations and Trade.  Obviously, the meetings of the ad hoc group were 
confidential, but if it were the case, Ecuador woul d notify the Committee of any decision taken;  this 
was not the case at the moment.  Ecuador's co mmitment was to move forward towards the 
dismantlement of the measures on 23 July. 
93. It had also been asked how this mechanis m would operate.  Starting from tomorrow, 
23 March, 40% of the measures would have been dism antled:  this would not require issuing any new 
COMEXI Resolution.  Customs was fully aware of the Resolution, which had been published in the 
Official Gazette, and would act accordingly. 
94. He could make no comment with respect to decl arations made by authorities in Ecuador.  He 
hoped Members would understand the internal polici es of an independent country.  Comments were 
made by various authorities, but what should be high lighted is that decisions in this case would be 
adopted by COMEXI, which was headed by the Pres ident of the Republic.  So there was complete 
seriousness on the part of Ecuador. 
95. With respect to questions by other Members, he  would be glad to distribute his statement, 
where figures were provided and where it was explained how an assessment of the situation could only be made at the end of the period, since it had been difficult to make a forecast without having a 
full picture of the state of the economy.   
96. Regarding the questions submitted by Colombia, th ey had been answered in the framework of 
the Andean Community Commission, where Ecuador' s schedule to dismantle the measures had been 
approved.  Ecuador was making efforts to pr ovide answers to the Andean Community.  
97. Some of the answers to the EU's question with respect to the expected evolution of Ecuador's 
economy could also be found in Ecuador's statemen t.  To provide greater information regarding 
domestic policies and their effects and on sectors allegedly been protected was outside the scope of discussions in this Committee.  Ecuador was obviou sly not protecting any sector.  What Ecuador was 
trying to do was to maintain a healthy economic e nvironment to allow it to continue applying the 
development policy that it was entitled to implement. 
98. On the same question on the ad hoc group, it was obvious that all economic and commercial 
policies must be monitored at the internal level.  The ad hoc group was in charge of that monitoring.  
He wished to emphasize, however, that Ecuador's no tifications to the Committee had been very clear.  
On the other hand, it had been asked to Ecuador if  oil prices would recover or not, an answer no one 
could provide.  Ecuador hoped that oil prices w ould increase, but according to its estimates, which 
had been presented in his previous intervention,  the level of US$80 a ba rrel posted in 2008 would 
seem difficult to attain although one never knew.  He emphasized that Ecuador was in no position to 
determine what would happen but it was anticipat ing figures that could maintain the economy in a 
state of relatively good health.  
99. The issue of massive imports had been sufficien tly explained in the statement he had just 
read, as well as Ecuador's commitments.  He wished to repeat that Ecuador was not requesting new consultations on this occasion, nor was it contempl ating consultations in the future.  Ecuador 
understood the commercial preoccupations of certain Members, particularly Ecuador's neighbours.  
Ecuador did not understand nor share systemic preo ccupations.  Ecuador would like that the systemic 
preoccupations of these Members be aired in othe r committees in this organization, since it was 
particularly developed countries that applied the gr eater distortions to world trade.  Ecuador did not 
share the same systemic preoccupations expressed by some Members.   WT/BOP/R/98 
 Page 19 
 
 
100. In any case, Ecuador would always take into consideration the commercial interest of its 
neighbours, those with whom it had greater comme rcial relations.  Ecuador  hoped to address these 
commercial concerns as well as systemic preocc upations both in this Committee, and within the 
framework of the bilateral agreements it had with  some Members, as well as within the framework of 
the Andean Community. 
101. The representative of the United States  thanked Ecuador for some of the clarifications 
provided, particularly on the commitment to rem ove the current restrictions by 23 July.  This 
clarification was greatly appreciated because it had seemed in the notifications that further review by the ad hoc group could change that, but now it app eared by Ecuador's statement that indeed the 
measures would be removed by 23 July.  That was a commitment that the Unit ed States appreciated.  
That said, the past reassurance to remove the me asures by 22 January did not give to her delegation 
great confidence that the measures would indeed be removed by 23 July even with Ecuador's 
commitment today.  The United States believed th at new consultations could give Members the 
assurance they needed, as this would allow a mechan ism to discuss this issue further in the coming 
months as Ecuador was in the process of fulfilling its phase out plan to reduce the measures again on 
23 May and again on 23 July.  It would also allow additional information to be reviewed by the 
Committee on Ecuador's balance-of-payments situa tion.  She would also note that looking at 
paragraph 6 of the Understanding, as it had been  discussed by many Members, that these were new 
restrictions.  Paragraph 6 said that "a Member appl ying new restrictions raising the general level of 
existing restrictions by a substantial intensification of the measures shall enter into consultations with 
the Committee within 4 months of the adoption of  such measures".  Given this, again the United 
States called for consultations, but w ould be happy to discuss what the next step truly should be.  The 
United States thought that it could be helpful, give n the usefulness of some of the consultations held 
last year, to move to informal mode to actually discuss what Ecuador's next step would be in the 
coming months to ensure that the date of 23 July was met as Ecuador had indicated.   
102. The representative of Argentina
 stated that he would not repeat what most delegations had 
noted, even those who had requested this meeting, w ith respect to the transparency that Ecuador had 
shown in this situation, maybe not in terms of timi ng but certainly with respect to transparency and 
good faith to inform.  Some delegations had suggest ed the need for further consultations;  these 
delegations considered that this was a special situ ation.  First, Resolution 533 had ordered the 10% 
surcharge reduction on 15 January, i.e. before 22  January.  That is, there had not been a full 
compliance by Ecuador with the decisions at the last  meeting of this Committee which had concluded 
consultations, and in which Ecua dor had committed to remove the measures at the latest on 
22 January.  The Committee had instead a situation in  which the measures had been reduced by 10%.  
A full elimination had not been possible according to the explanations provided by Ecuador, which 
his delegation had accepted.  Ecuador had now  presented the Committee with a calendar of 
reductions.  Some delegations had expressed some  doubts with respect to compliance with this 
schedule of reductions.  He wished to remind them th at even a call for further consultations could not 
assure them that this would be the case.  It was not by going through the formality of a further 
consultation that they would obtain the assurance they sought.  This assurance would come from an 
improvement of Ecuador's economic and financial situation, not from  new consultations.  He wished 
to emphasize that this was a particular situation, bu t as he had said at the be ginning, consultations had 
been concluded.  Argentina considered that ther e had been a sort of partial fulfilment of the 
commitment made by Ecuador.  Taking into account  the actions undertaken by Ecuador, the proposed 
timetable for the dismantlement of the measures, and the statement made previously by Ecuador, it was clear that Ecuador was committed to dismantle all its measures on 23 July.  
103. Some delegations, in support of their requ est for further consultations, had mentioned 
paragraph 6 of the Understanding;  in that sense he wished to recall that Article XVIII:B contained 
similar provisions.  One Member had said that here  we were dealing with new measures and it was 
this same Member who had read the paragraph re ferring to new measures or an increased level of 
restrictions.  Obviously, the purpose of Ecuador's re duction scheme was precisely to reduce and not to WT/BOP/R/98 
Page 20  
 
increase the level of restrictions.  Ecuador was re ducing the restrictions in accordance with a proposed 
schedule.  These were not new restrictions, but th e continuation of something that had not been 
completely fulfilled.  Argentina considered it impor tant to promote a debate and have transparency 
respect all these issues, which may affect the comme rcial interests of Members.  Given Ecuador's 
commitment to meet its timetable to dismantle the measures, perhaps a practical step in this 
extraordinary case would be to have  some kind of continuation of in formal consultations so that 
Ecuador could keep the Committee abreast of devel opments related to the dismantlement schedule, 
and give Members the opportunity to ask questions.  That could be a practical means to satisfy the 
curiosity and interest of some Members and provide Ecuador the opportunity to inform with respect to 
the elimination of the measures, thus avoiding a debate with respect to holding consultations which 
would fail to reach consensus, since Argentina would not agree to this. 
104. The representative of Venezuela
 noted that some Members had come to the meeting with the 
intention of prolonging the consultati ons held with Ecuador, with were closed.  It had been shown to 
them, that, in accordance with rules, it was not possi ble to continue the consultations, since they had 
been concluded in December and the General C ouncil had been duly informed.  Those Members now 
wanted to turn around the situa tion and were referring to new measures.  He considered that the 
Understanding was clear in this respect, paragraph 6 called for consultations when a Member applied 
new measures or intensified substantially those in  existence.  The timetable presented by Ecuador 
contained a permanent reduction of the measures, until July 2010, so Venezuela would also oppose 
any call for new consultations, but would be supportiv e of informal talks that are always useful for 
transparency purposes. 
105. The Chairman  noted the proposal for new consultations from a few delegations.  He also 
noted that Ecuador had stated that it was not requ esting any new consultations.  He would hence wish 
to ask Ecuador if it had a reaction to the suggestio n by the United States or Argentina for informal 
consultations that might help to find a way fo rward as a means of building confidence in the 
elimination of the measures notified. 
106. The representative of Ecuador  said he was thankful to Argentina and Venezuela for clarifying 
what paragraph 6 said.  Ecuador had neither applie d new restrictions nor had it increased the general 
level of the ones in existence.  With respect to th e questions posed, especially by the United States, of 
which would be the next steps, he wished to answ er that the next step would take place tomorrow, 
when an additional 30% of the measures would be  dismantled horizontally.  The following step would 
take place on 23 May, when an additional 30% redu ction would take place, so as by 24 May, 70% of 
the measures would have been dismantled.  It was a right of the Members if they wished to call for a 
meeting of the Committee in May after the implemen tation date and Ecuador did not have a problem 
with this.  He thought that maybe informal talks were not the best way to proceed, but Ecuador was open to what the Members would recommend in this  subject.  All Members had the possibility of 
requesting a meeting of the Committee, but Ecuador w as also ready to continue to maintain contacts 
informally as it had always done.  So Ecuador could not be blamed of lack of transparency;  it was 
open to continue maintaining informal contacts and to treat the subject openly. 
107. The representative of the United States
 thanked Ecuador for its openness to take part in future 
consultations in the Committee.  Sh e also wished to note for the reco rd that the United Stated did not 
agree with Argentina's or Venezu ela's interpretation of Article 6 of the Understanding.  The United 
States would note that, actually, at the start of the meeting today, Venezuela had acknowledged that 
was the beginning of a new process and that was indeed true.  The old measures had expired on 
22 January and anyone could look back to Resolution 466 to see that that was the case and as such, 
these were new restrictions.  This was not an Ec uador specific issue.  The United States had the 
systemic concern of what would happen if anothe r country were to come to the Committee with 
measures, even if they had a phase out plan with  them, and the Committee had set the precedent that 
no consultations were required for those new measu res.  So for that reason, the United States 
continued to see the need for actual new consultati ons to take place based on these new measures that  WT/BOP/R/98 
 Page 21 
 
 
had been put in place.  The United States thanke d again Ecuador for their openness and willingness to 
take part in future consultations.  
108. The representative of the EU wished to clarify a point where he  saw that there was a bit of a 
misunderstanding.  The EU's position was not that the Committee should somehow re-open the 
consultations of last year.  The EU agreed that th e consultations of last year had been concluded and 
that there were clear conclusions, some of which we re been discussed today.  And indeed because the 
consultations of last year had been concluded,  the Committee now saw before it new measures which 
had been introduced and notified.  Ecuador's own legislation for last year had provided for balance-of-
payments measures only until 22 January 2010.  No w we had a new piece of legislation, a new 
notification which went beyond that date, and which represented a substantive change to the original 
measures which had been consulted upon last year.  So for these reasons, the EU also considered that 
new consultations for these newly notified measures were needed.  
109. The representative of Venezuela  wished to clarify that he had not said there had been a new 
process, but a new notification.  These were two tota lly different things.  During a process there can 
be many notifications, and a lack of notification did not imply that there was no process.  He was glad 
that the EU had finally recognized that last year's process was over;  for a ne w process to start, there 
should be an increase in the restrictions, but what  Ecuador was doing was gr adually reducing them.  
So, some Members, such as Venezuel a considered that the subject should be terminated today;  they 
were satisfied with Ecuador's actions and did not  wish to engage in informal consultations.  
110. The representative of Ecuador  stated that Ecuador was not trying to engage in new 
consultations in the terms of the Understanding.  That  had to be clear.  Ecuador was open to engage in 
bilateral contacts with Members.  Also, Members ha d the right whenever they  wished, because it was 
written in the Understanding, to convene a meeting of  this Committee, or any Committee in the WTO.  
That was the right of Members.  On the other hand, he did not think that it was the task of this Committee to interpret the Understanding.  
111. The representative of Canada
 wished to point out that Ecuador's transparency here was in no 
doubt, as they had shown up to now.  However,  a number of Ecuador's neighbours as well as the 
Members requesting for this meeting today, had e xpressed their support for Ecuador to dismantle its 
import restrictive measures as stated in COMEXI 54 9.  Canada believed that  new consultations would 
show the results achieved in e liminating such measures.   
112. The Chairman  stated that it seemed to him that  the Committee was close to a common 
agreement.  He would like to ask the U.S. dele gation if it would accept the proposal of Ecuador to 
meet again in the last week of May and to review  the situation and to consult the further steps.  
113. The representative of the United States  said that she hoped that question would be asked to 
other Members as well.  She wished to reiterate that the United States believed that these were new 
measures, which therefore required new consultations .  Again, the United States would support what 
Canada had just said that new cons ultations would prove or  give Members some comfort that Ecuador 
was indeed going to fulfil its commitment.  She was not sure on what justification would Ecuador 
implement these measures at this time in the abse nce of consultations.  The last report of this 
Committee had ended with a conclusion that Ecua dor would remove the last measures by the 
22 January;  if there were no new c onsultations and Ecuador's was not going to be on the record in 
terms of a basic document or through formal c onsultations that it believed these measures to be 
justified for balance-of-payments purposes, she coul d not see how Ecuador could justify the measures.  
The report had being concluded;  that process was fi nished.  There were new notifications that had 
been put in place.  If there was no formal review of  those notifications in a new consultation, then 
Ecuador was operating now without any cover in the opinion of the United States.  She was sorry, but at this time the United States could not agree to an  informal consultation.  They would need the 
consultation to be directly called under the Understanding.  WT/BOP/R/98 
Page 22  
 
114. The representative of the EU
, stated that the EU agreed with what the United States had 
stressed out, and shared its arguments;  they were also in favour of the formal process of 
consultations.   
115. The representative of the United States  said that it was certainly not the U.S. position to put a 
new chair in a difficult situation.  As she had noted earlier, it may be helpful to have a small informal 
chat among some of the interested Members so as to  be able to come to some type of amicable 
conclusion.   
116. The representative of Ecuador  thanked the United States for their proposal, but stated that 
Ecuador could not agree with it. 
117. The Chairman  thanked all the Members for their comments and questions.  He suggested that 
interested Members meet informally in Room PCR.   He also suggested meeting in formal mode 
afterwards.  If it was deemed necessary, he would be available to assist members in their informal 
consultations.  
118. The representative of Ecuador  requested clarifications with respect to the nature of these 
meetings. 
119. The Chairman  said that he was proposing a meeting am ong all interested delegations for those 
informal consultations.  It was not an informal meeting of the Committee.  
120. The representative of Venezuela  queried about the purpose of such meeting.  Here there was 
disagreement with respect to the interpretation of ru les.  He noted that the consultations had been 
concluded and that there were no elements for new consultations.  So, he wondered what the purpose 
of the informal meeting was, whether it was rule interpretation.  Venezuela considered the issue 
should be terminated here. 
121. The representative of Ecuador  stated Ecuador had come to this  meeting to inform with respect 
to its notifications.  Ecuador had not come here to request new consultations, and that position would 
not change.  He thanked the Chairman for his e ffort but stated that Ecuador's position would not 
change. 
122. The Chairman  said that it seemed it would not be possible to finish the meeting today, so he 
proposed to reconvene tomorrow afternoon at 3 p.m.  in the formal mode.  But before that, he 
suggested that delegations speak informally in  the morning.  Anyway, the Committee would 
reconvene in the afternoon.  
123. The representative of the United States  said that at least between Ecuador and a few of the 
countries that were here today there was some rec ognition that it could be useful to have discussions 
now and on 23 July.  What form those discussions would actually take was not yet in agreement and 
the United States thought that it would be useful to discuss that in a small group.  She we would be, on behalf of the United States, very grateful to Ec uador if they would consider discussing again this 
issue with the United States tomo rrow on an informal basis.  
124. The representative of Ecuador
 said that Ecuador wished to reiterate that it had been very open 
in its dialogue with Members, but that it did not see the need to hold informal consultations with 
Members who had shown preoccupation.  They had already had bilateral m eetings, and they had 
reaffirmed their position today.  Ecuador coul d, however, accept to reconvene the Committee 
tomorrow in the formal mode, at 3 p.m., and discuss  with Members all possibilities.  He wished to 
have interpretation.   WT/BOP/R/98 
 Page 23 
 
 
125. The Chairman suggested reconvening the meeting the following day, in the afternoon, at 
3 o'clock.  The meeting would star t in the informal mode and then proceed in the formal mode.   
126. The representative of Venezuela  said he understood this item had been closed, so what would 
the meeting tomorrow be about? 
127. The Chairman  repeated that he was not closing the meeting today.  The Committee would 
reconvene the meeting tomorrow afternoon.  The mee ting would start in an informal mode and then 
come to the formal mode.  He thanked all delegations. 
MEETING OF 23 MARCH 
128. The Chairman  recalled that the Committee was meeting to review the notifications submitted 
by Ecuador in February.  He also recalled that so me Members had been of the view that a further 
meeting to review the steps taken by Ecuador to gradually dismantle the implementation the measures 
would be appropriate.  He encouraged interested delegations to hold inform al consultations on this 
and on other matters of interest.  He would now lik e to switch the informal mode and to request the 
delegations to inform the Committee of any developm ent that may have taken place at the results of 
these bilateral discussions.   
129. Switching back to formal mode, the Chairman  opened the floor to Members wishing to make 
a statement or to ask questions 
130. The representative of Argentina  thanked the Chairman for convening the meeting and also for 
the information provided by some interested delegatio ns about the informal meetings.  He saw that the 
Committee was in a positive mood and that it looked as if the Chairman might recommend to this 
Committee some of the ideas he had just advanced in  the informal session.  Argentina was happy that 
in a way we could have this transparency and pos sibility of debate and of  facilitating delegations 
information on the developments in dismantling th e measures that were still in place in the case of 
Ecuador.   
131. The representative of the United States  stated her appreciation of the Chairman's leadership in 
this review of Ecuador's notifications to the Comm ittee, which were dated 23 February 2010.  The 
United States greatly appreciated the commitment made  by Ecuador in this Committee to remove the 
trade restrictions notified in WT/BOP/N/74-75 no later than 23 July 2010.  The United States also appreciated Ecuador's statement in the Committee that  it was willing to provide further information to 
the Committee on its trade restrictions and to furthe r meet with this Committee to review the steps 
Ecuador had taken to remove the restrictions.  The Un ited States requested that, in  line with this offer, 
Ecuador's recent notifications be further revi ewed in this Committee in May and July 2010 
immediately following the scheduled percentage redu ctions in Ecuador's trade restrictions on 23 May 
and 23 July that were indicated in Article I of COMEXI Resolution 549.  As Resolution 466 had only 
implemented trade measures for balance-of-payme nts purposes for one year until 22 January 2010, 
the United States believed that the measures impl emented under Ecuador's not ifications 74 and 75, 
COMEXI Resolutions 533 and 549 respectively, were new measures.  As the United States had stated, 
in line with paragraph 4 of the Understanding "a Member applying ne w restrictions shall enter into 
consultations with the Committee within four months  of the adoption of such measures".  The United 
States, along with other Members, had requested th at Ecuador enter into new consultations in line 
with this commitment.  The United States was grea tly disappointed that Ecuador had indicated in 
other meetings this week its unwillingness to enter into consultations.  The United States found this 
refusal to engage in consultations  to be of significant systemic concern.  The United States believed it 
was critical to the proper functioning of the WTO system and this Committee that Ecuador provide an 
explanation of its balance-of-payments situati on that would justify the imposition of new trade 
restrictions after Ecuador had committed to remove  all trade restrictions imposed for balance-of-
payments purposes in January.  WT/BOP/R/98 
Page 24  
 
132. Further, at this time, being that paragraph 34 of the Committee's last consensus report on the 
consultations with Ecuador had concluded with a commitment by Ecuador to remove all trade 
measures for balance-of-payments purposes no later th an 22 January 2010, and that this did not 
appear to have occurred, and additionally, that  new measures had been put into place for which 
Ecuador had refused to engage in consultations with the Committee, the United States noted that there 
was no agreement among Members of this Committee th at Ecuador currently fulfilled the criteria that 
were in the Understanding or Article XVIII:B of GATT 1994 to maintain balance-of-payments 
measures.   
133. As the United States had noted during the discu ssions this week, they saw no current balance-
of-payments justification for Ecuador maintain ing balance-of-payments restrictions.  The 
United States was also concerned that the new measures were to protect certain sectors of Ecuador's 
domestic industries.  The United States also not ed that Ecuador had given Members no basis upon 
which to believe that it would fulfil its new commitm ent to remove its current trade restrictions by 
23 July 2010.  Given this state of play, the Unite d States requested that Ecuador remove the measures 
immediately.  At this time, the United St ates was reserving its right under GATT 1994.   
134. The representative of the EU
 stated that, he would like first of all to welcome Ecuador's firm 
commitment to remove all the measures by 23 July .  The EU would like that commitment to be 
reflected in any conclusions that this Committ ee would draw.  The EU took note and welcomed 
Ecuador's willingness to respond in writing to qu estions from Members and also welcomed the 
disposition of Ecuador to make itself available for meetings in this Committee in May and July in 
order to review the progressive dismantlement of the measures and their final elimination by 23 July.  
The EU welcomed Ecuador's willingness to res pond in writing ahead of those meetings.    
135. Like the previous speaker, he could only e xpress his sincere regrets that Ecuador, for 
whatever reasons may be, had been unable to meet the commitment it had taken last year to remove 
the restrictions by 22 January.  As a matter of fa ct, it was a disappointment and a concern to the EU 
and its exporters.  
136. Again, like the United States, the EU believed that the measures notified were new measures 
and hence, they required new consultations in the Balance-of-Payments Committee.  The EU was 
surprised and disappointed that Ecuador had not been  willing to engage in t hose consultations.  The 
EU drew two conclusions from that unwillingness: 
• First of all, Ecuador did not wish to follow or comply with the rules of the Balance-of-
Payments Understanding, and,  
• Secondly, that in refusing to carry on with consultations there was no justification of the 
measures on Balance-of-Payments grounds.  And certainly, in the absen ce of any consensus, 
the measures in place could not be said to fulfil  the necessary criteria for balance-of-payments 
purposes.  So the measures did not have multilate ral legal coverage, wh ich they would have 
had Ecuador accepted to carry on ba lance-of-payments consultations.  
137. The EU also reserved its right under GATT 1994 .  The EU hoped that, even though Ecuador 
had not accepted this time to have normal balance- of-payments consultations on these new measures, 
at some point in time in the future if the situ ation was not remedied, it would accept to engage in 
consultations.  The EU would like to suggest that in drawing up the conclusions of this discussion, 
this Committee exercise, that the points on which Members had systemic concerns be recorded and reflected.  The EU would also like that the commitm ent taken by Ecuador in terms of the elimination 
of the measures, the progressive dismantling between  now and July and the readiness of Ecuador to 
meet in the Committee for a review  of that process be recorded.  WT/BOP/R/98 
 Page 25 
 
 
138. The representative of Venezuela  said that these were not new measures, just a new 
notification.  By some interventions, it would see m that was at play was not the reestablishment of 
Ecuador's situation but the desire to be proven ri ght.  Because if these had been new measures, which 
was not the case, Ecuador would have had one more year to have the measures examined.  And that 
was not what Ecuador was requesting.  In the hypot hetical case, which was not the current one, that 
these had been new measures, they would have b een notified as such and new consultations would 
have been held.  Ecuador would then have  had a year to reapply the measures.   
139. Nowhere in the GATT rules was there any mention to the possibility of applying 
preconditions.  The provisions with respect to bala nce of payments said that the developing country 
applying measures to this end w ould relax them progressively, as its balance-of-payments situation 
improved.  They also said that the contracting part y concerned shall pay due regard to the need to 
reestablish balance-of-payments equilibrium on a sound and lasting basis.  Considering this, he could 
not understand why some Members wished to hold consultations and push Ecuador back to the 
situation where it had found itself last year, and from which it was just exiting.   
140. In paragraph 7 of the report presented last year by the IMF, it was forecasted that Ecuador's 
current account deficit would reach 2.4% of GDP in  2010, after a 3% in 2009.  So, Ecuador's actions 
were perfectly consistent with its desire to redu ce the deficit, and this was being achieved through 
trade restrictive measures.  Article XII:3:b of the GATT 1994 noted that "the contracting parties 
recognize that, as a result of domestic policies direct ed towards the achieveme nt and maintenance of 
full and productive employment or towards the development of economic resources, a contracting party may experience a high level of demand for imports  involving a threat to its monetary reserves".  
Ecuador had experienced a period of growth durin g 2004-09, linked to its development process, as 
could be inferred by reading reports by the Centra l Bank of Ecuador and the IMF.  As detailed in 
Article XVIII of the GATT 1994, a situation like th is could lead to balance-of-payments problems. 
141. Paragraph 4 c) of Article XII of the GATT 1994 stat ed that if there was damage to the trade of 
any contracting party, this damage should be id entified.  Affected Members should hence indicate 
exactly the damage caused by the measures.  He wished to ask the three Members who had requested 
consultations, which were among the largest economies in  the world, if they had been affected by the 
measures taken by Ecuador.  He doubted that a small Andean economy such as Ecuador could be 
harming economies such as those of the EU, the United States or Canada.  On the contrary, the stimulus packages adopted by these countries had cons iderably affected developing countries, which 
had no means to surmount the crisis, because they la cked the infrastructure or the financial means for 
this;  developing countries would not be able to  overcome the crisis in one or two years.   
142. He wished to place on record that it was necessa ry for those who had asked for consultations 
to indicate exactly where the damage was, with concrete figures.  It had been said that it was 
Ecuador's neighbors who had been the most affect ed.  He understood that there was an agreement 
with Ecuador's neighbors that the measures would be dismantled in July 2010, since they were 
sympathetic of Ecuador's situation.  He was sure th at these countries had been directly affected by the 
measures, but understood that all developing countri es shared a similar plight and should try to push 
ahead together.     
143. The representative of Canada
 welcomed Ecuador's proposal to meet in May and July 
immediately following the planned reduction of tariff surcharges, outlined in COMEXI 
Resolution 549.  Canada agreed w ith this proposal.  Canada, like the United States and the EU, agreed 
that notifications WT/BOP/N/74-75 were notificati ons of new measures, and as such required seeking 
new consultations.  Canada was disappointed in Ecuador's position in not agreeing to new 
consultations.  Canada was prepared to join consen sus in the proposed future path.  Canada would like 
to ask Ecuador as well if they could publish at th e WTO all the tariff lines that were being modified 
pursuing to COMEXI Resolution 549;  this could pr ovide some sort of assurance that the restrictive 
measures were being dismantled.  So Canada would like to request from Ecuador to publish, as indeed WT/BOP/R/98 
Page 26  
 
was done initially when the measures were taken, th e tariff lines affected and the tariff surcharges 
applied for each tariff line.  Like other Members,  Canada reserved its rights under the GATT 1994.   
144. The representative of Argentina
 regretted that, in spite of the disposition of Ecuador to 
continue debating the main aspects of its notifica tions WT/BOP/N/74-75, certain preconditions were 
been being suggested.  The understanding reached ha d been that this Committee would meet again in 
May and July to debate the implementation of the measures by Ecuador.  Some delegations now were 
demanding that Ecuador respond before these meetings  in writing to questions, and that it published 
tariffs prior and after the reductions.   
145. Naturally, Ecuador would have to determine if it was in agreement with these requests and in 
what way it could thus satisfy the curiosity of cer tain Members.  He wished to request that the 
Chairman include in the report:  1) that ther e was no consensus among Members respect to the 
illegality of the measures taken by Ecuador this year;  and 2) that there was no consensus with respect 
to if those measures were new or were the continua tion of the application of the measures applied last 
year.  The report should clearly state that there ha d been no agreement on this issue, because some 
delegations were worried about setting precedents , and so was Argentina.  His delegation was 
interested in reflecting clearly this lack of consensus. 
146. The representative of the Dominican Republic  stated that he believed there were several 
elements that were being debated.  First, if Ecuador really had a bala nce of payments problem.  In this 
respect, he thought that the figures produced by the IM F showed this to be th e case.  The increase in 
Ecuador's international reserves last year had b een the product of capital inflows, not of an 
improvement of its trade or its current account bala nce.  Additionally, an increase in reserves should 
have resulted in an increase in liquidity, since Ecuador was a dollarized economy, and this had not 
happened.  What should be deba ted here was what instruments could multilateral bodies, including 
this organization, make available to countries with no monetary policy, in crises situations, so as to 
prevent them from having to adopt trade balance r estrictions.  He thought the world economy may not 
have seen the end of crises yet.  There was a problem in Europe with respect to Greece and other 
highly indebted countries that could have an impa ct on the international economy and cause a crisis 
again.  That is, that there were many factors in play that called for countries that did not have 
monetary policies to act cautiously tr ying to protect their reserves.   
147. Ecuador's reserves had increased not by an improveme nt of its international trade.  Reserves 
had increased due to loans from the Latin American R eserve Fund, advanced sales to Petro China, and 
by an allocation of special drawing rights.   
148. From a legal point of view, what Ecuador was presenting here were notifications of a 
reduction of restrictions.  According to WTO law, consultations were require d if "any party applied 
new restrictions or rose the level of its existing restri ctions".  So, it was referring to new restrictions.  
From what he saw, the first resolution had reduced  restrictions by 10%, while the second resolution 
had additionally reduced the restrictions.  So wh at was being examined here was a reduction of 
restrictions, not new restrictions.  He could not see that any new restriction was being applied.  
Restrictions had been introduced a year ago, a nd now new notifications had been added but to 
gradually reduce and eliminate the restrictions.   
149. The representative of the United States  stated that she wished to agree with the distinguished 
delegate from Argentina that she hoped the report refl ected the lack of consensus on the legality of the 
measures as well as the lack of consensus on whether the measures were new.  
150. The representative of Venezuela  said that the lack of consensu s was with respect to the lack 
of legality of the measures.  While most Members considered the measures to be legal, the three 
Members which had convened the meet ing thought that they were not legal.  The differences were not  WT/BOP/R/98 
 Page 27 
 
 
then as to whether the measures were legal or not, but were about how the measures were perceived:  
some Members perceived them as illegal, while the majority of Members saw them as being legal. 
151. The representative of Ecuador  stated that there was no consen sus with respect to the measures 
applied.  For a group of Members, the measures were  legal, for another group, they went against the 
provisions of the Understanding.  For Ecuador, the me asures were totally legal.  In this respect, 
Ecuador wished to place on record that as at t oday (23 March), 40% of the measures had been 
dismantled.  How could some Members then say th at these were new measures?  That was totally 
absurd.  Ecuador rejected that statement and also re jected the observation with respect to its lack of 
willingness to abide by the recommendations of the Committee.  Ecuador took note of the suggestions 
made and was ready to accept holding two further m eetings, but without any pre-condition.  If (some 
Members) tried to impose pre-conditions, then the m eeting should be adjourned and note taken of the 
statements made.  On the other hand, Ecuador was su rprised that (some Members) had stated that data 
had not been presented with respect to Ecuador's cu rrent balance-of-payments problems.  Ecuador had 
presented a detailed report the day before, which w as currently being circulat ed to Members.  So 
Ecuador also rejected that statement, because it had supplied data. 
152. He noted that some of the Members who were  requesting prompt compliance with the rules 
here had the worst record with respect to this.  Their lack of compliance was not limited to a few 
months, but to years and even decades;  he wished to recall the banana case, just to cite an example:  
decades of discrimination and lack of compliance with the DSB's recommendations and resolutions.  
He wished to reiterate, that Ecua dor had been forced to adopt bala nce-of-payment measures due to the 
financial crisis provoked by develope d countries, and hence completely alien to Ecuador's will.  This 
financial crisis had been caused by  a lack of controls, including by the IMF, over the great speculation 
that had taken place globally.  Ecuador, in contr ast to developed countries, did not apply huge 
domestic subsidies, nor did it subs idize its exports, as was probably been done by the United States 
and the EU.  Ecuador did not disregard the DSB' s recommendations, as had been done by the EU in 
the case of sugar and biotechnology products, or by  the United States in cases such as the Omnibus 
bill, antidumping measures on steel products, copyright, and zeroing.   
153. Ecuador did not have the financial capacity these Members had to apply millionaire rescue 
packages for its banks and industries, particularly  the automotive industry.  These packages, he 
wished to reiterate, had not yet been notified to th e WTO.  He also wished to remindl Members that 
Ecuador had bound tariffs at a low rate as a result of  its accession to the WTO.  Ecuador did not apply 
any trade-defence measure, nor did it extend measures for an indefinite period of time.  He wished to 
recall that the EU had been sued before the Eur opean Court of Justice for extending by 15 additional 
months its antidumping on shoes originating in China and Vietnam.   
154. Ecuador did not apply antidumping measures, nor did it incorporate in them methodologies 
condemned consecutively by the Appellate Body, such  as zeroing.  Nor did it have special clauses in 
agriculture, as some developed countries did.  Ecua dor had reacted in this manner, but it felt that it 
had been unfairly treated.  Ecuador  had nothing to hide and in the face of claims by Members who 
should first put their own house in order, Ecuador responded with more transparency and openness.  
Ecuador would not accept being used to set pre cedent and express systemic preoccupations, and 
receive lessons on protectionism from some of the Members that implemented the largest protectionist policies at a global level.  Ecuador could not accept lessons on good economic governance either from 
some of the Members who had shown the worst reco rd in this area, and which together with the 
ominous policies of the IMF had been the direct cau ses of the world-wide crisis that had forced 
Ecuador to return to this Committee.  He wished th is declaration to be incorporated in the minutes of 
the meeting.  Ecuador wished to reiterate its prop osal to hold Committee meetings at the end of May 
and at the end of July, in a formal mode, but without any pre-condition.  
155. The representative of Venezuela
 expressed his support to the statement made by the 
Dominican Republic with respect to the need to di scuss in this Committee what financial instruments WT/BOP/R/98 
Page 28  
 
could be put at the disposal of countries facing a crisis.  This should be in accordance with the 
programme of the Doha Development Round, which some Members, including those who had called 
for the meeting today, sometimes forgot had a de velopmental aspect.  He also wished to place on 
record that Article XII of the GATT 1994 requested th at Members that feel they are facing damage or 
threat thereof indicate the extent of this dama ge.  He hoped not to see before this Committee poor 
countries that had been asked to open their markets by countries which applied technical barriers to 
trade and other non-tariff trade barriers.   
156. The Chairman
 proposed, in conclusion, that the Committee agree to take note of the 
statements made, which would be full y and faithfully reflected in the report of this meeting.  He also 
suggested that the Committee agree to meet again in the last week  of May and July to examine 
Ecuador's progress in phasing out the measures in line with the time table presented.  If it was so 
agreed, he wished to thank the in terpreters for the hard work today and the meeting was adjourned.  
 
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