Ecuador WT/TPR/S/254 
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IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. During the period under review Ecuador's trade regime was characterized by a policy shift 
towards increased state control of the economy, particul arly the "strategic sectors" such as oil, electric 
power, telecommunications, transport, which account  for around 50% of GDP. As from 2010, plans to 
support priority sectors and selective import substitution activities included general and 
industry-specific assistance in various forms (Chapt ers II(2) and (5), and III(3)(iv) and (4)(i)).  It 
seems that this inward-looking policy framework, which may affect the efficient allocation of 
resources in the economy, has not led to major pr oductivity gains, and thus  improved international 
competitiveness, so far.  Action is being taken to im prove logistics (e.g. transport), a priority sector 
required for production diversification. 
2. Despite its relatively modest contribution to GDP (6.6% in 2010), agriculture (including 
fisheries) accounts for 29.3% of employment, so  that labour productivity in the sector is roughly 
one-sixth of the level in the rest of the economy.  At  the same time, agriculture  is a major recipient of 
budgetary assistance compared with other sectors.  A major land reform is under consideration, with 
possibly important implications for productivity an d foreign investment.  The average applied MFN 
tariff protection for agriculture h as increased, while protection in manufacturing has fallen.  Certain 
agricultural products (meat offal, rice, and milk a nd milk cream) are subject to peak tariff rates and 
tariff-rate quotas, whose utilization remains subjec t to domestic absorption requirements.  Border 
protection also continues to be provided th rough variable import levies under the Andean 
Community's price band system.  No special safe guard measures were used during the period under 
review.  Minimum reference or support prices to be paid to producers by buyers remain in place for 
bananas, cocoa, coffee, shrimp, and fish products.  Foreign investment in fisheries is subject to 
local-processing requirements. 
3. New mining and hydrocarbons laws have changed the nature of contracts with private-sector 
companies (from shareholders to services providers), requiring their renegotiation or termination.  The 
hydrocarbons sector remains a key activity, accounting for more than half of merchandise exports, 
despite the sharp decline of its contributio n to GDP (15% in 2010);  the state firms 
PETROECUADOR and PETROAMAZONAS (a new state-ow ned enterprise created to undertake oil 
exploration and production activities previously carri ed out by private firms), remain the dominant 
players in hydrocarbons operations.  Despite being an important oil exporte r, Ecuador's dependency 
on imported refined products has increased, but action is being taken to expand its refining capacity.  
Refined oil prices are subsidized at a considerable  budgetary cost.  State control and involvement in 
mining, a strategic sector, was increased by, inter alia , creating a national mining company;  as from 
2009, new contractual conditions we re implemented for mining exploration and the quota for the 
required number of Ecuadorian  workers was reduced.  Reforms were undertaken to improve the 
efficiency of the operations of state firms in the el ectricity market.  This market, which is dominated 
by a government-controlled enterprise, remains import-dependent during periods of drought.  
Electricity tariffs are cross-subsidized. 
4. The manufacturing sector plays a relatively mod est role in the economy (9.3% of GDP) and 
in merchandise exports (8.5%).  While average MFN tariff protection to the sector has declined, the 
redistribution of rates has resulted in more pr onounced tariff escalation.  Budgetary assistance for 
manufacturing remains low (0.2% total budget expend iture in 2008).  A programme remains in place 
under the Automotive Policy of the Andean Community (Chapter III(2)(x));  and a support programme for replacing aging public transport ve hicles was implemented during the review period, 
and tariff protection for passenger motor vehicles was reinforced.  Under the 2010 Agenda Productive WT/TPR/S/254 Trade Policy Review 
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Transformation (ATP) and subsequently legislation, new investment in priority sectors, including 
selective import-substitution activities, is singled out for tax and non-tax incentives, aimed at helping 
improve their productivity and expand their value-a dding output and exports (Chapters II(2) and (5), 
and III(3)(iv) and (4)(i)). 
5. The services sector is by far the largest contributor to GDP (around 56%).  Ecuador's limited 
GATS commitments remain unchanged.  Some acce ss limitations on foreign investment and other 
restrictions apply in basic telecommunications, radi o services, maritime transport, and airports.  The 
State maintained a dominant position in fixed-line telecommunications, another strategic sector.  Price 
caps are in place for telecommunication services.  Cabotage and transportation of hydrocarbons 
remain reserved to vessels flying the Ecuadorian flag, and transportation of hydrocarbons to a 
state-owned firm;  preferential kerosene prices are reserved for aircraft registered in Ecuador. 
(2) AGRICULTURE , LIVESTOCK , AND FISHERIES  
(i) Overview 
6. During the period under review, the share of agri culture in GDP remained stable at around 
5.9%;  its contribution to total formal employ ment was 28.2% in 2010 (Table I.2).  Ecuador's 
agriculture remains characterized by small and fragmented holdings that precludes a high degree of 
mechanization and economies of scale.1  The cultivated land area increased by 4% during the review 
period to 2,236,111 hectares (2,148,976 hectares in 2005).  According to the Agenda for Transformation of Production , overall labour productivity per wo rker increased by 30% between  2006 
and 2009 to reach US$3,763.
2  Crops accounted for 60% of total output value in 2009, followed by 
fisheries and livestock production.  The main crops  (in acreage terms) were cocoa beans (18.6%), 
corn (18.5%), rice (16.2%),  bananas (14.8%), oil palm (9.8%), and coffee (7.6%).  The sector's main 
export products were bananas, frozen crust aceans, prepared fish, and cut flowers. 
7. Ecuador maintains strategic stockpiles equivale nt to two months of consumption of rice 
(100,000 tonnes), corn (170,000 tonnes), and sugar (85,000 tonnes) to ensure food security for the 
population.  The Economic Policy Agenda for Good Li ving 2011-13, targets a reduction of imports of 
corn, soybean, wheat, and barley to 40% of domestic consumption by 2013 (Chapter II(5)).3 
(ii) Policy framework developments 
8. Ecuador considers domestic agricultural production as the cornerstone of its rural 
development, food security, and environmental preservation.4  Plans to ensure the sustainability of the 
sector include reforestation, promotion of indige nous/local crops, and improving food safety.  In line 
with the National Plan for Good Living (Chapter II(2) and (5)) the main policy objectives of the 
Ministry of Agriculture, Livestock,  Aquaculture, and Fisheries (MAGAP)5 are to:  develop a 
competitive sector with the participation of state-owned enterprises;  improve farmers' welfare;  
                                                      
1 Some 84.5% of producers work an acreage of 1 to 20 hectares, and only 2.3% have more than 
100 hectares. 
2 Sectoral Council fo r Production (2010). 
3 Ministry of Economic Policy Coordination (2011a). 
4 Articles 281, 409, and 410 of the 2008 Constitution. 
5 The MAGAP is the main authority responsible for Ec uador's agricultural policies;  it is composed of 
three Under-Secretariats on:  rural development, agri culture and livestock, and aquaculture and fisheries. Ecuador WT/TPR/S/254 
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pursue farmland reform and embellish the rural land scape;  improve the agricultural legal framework;  
modernize the agriculture sector;  and promote exports and production of  high-value products.6 
9. In addition to the 2008 Constitution, the main legal instruments governing the sector are the 
Agrarian Development Law, the December 2010 Orga nic Code of Production, Trade and Investment 
(Chapters II(2) and (5), and III(4)) and several other laws regulating specific activities.7  In order to 
ensure food security and sovereignty, the authorities are expected to promote agricultural production activities of micro and SMEs (MIPYMES), use fiscal (budgetary) and tariff policies to protect the sector, and provide access to preferential loans.
8  According to the ATP , increasing the productivity of 
family farming and small units producing priority cr ops for food sovereignty is a priority;  it will be 
met by enhancing the provision of seeds, soil and fertilizers, as well as by upgrading access to 
irrigation and transfer of technology.  Othe r measures to increase productivity include research 
programmes, training, strengthening of producer associ ations, marketing support and trade promotion.  
MAGAP selected coffee, fine cocoa, agri-forestry, artisanal fishery, and mariculture as the basis for 
output diversification.9 
10. Under the 2008 Constitution, and the 2009 La w on the Food Security and Sovereignty 
Regime10 the Government regulates the use of and access  to land, which should comply with social 
and environmental policy objectives.  Furthermor e, large estates and land concentration are 
prohibited, which impedes the functioning of the market and economies of scale.11  S i n c e  
August 2010, different Land Reform  Bills have been under consider ation by the National Assembly.12  
In 2010, the National Agrarian Development Institute  (INDA) was dissolved, and all its functions, 
including those relating to the expropriati on of land, were taken over by the MAGAP.13 
(iii) Border measures 
11. Agriculture continues to receive high levels of border protection.  In 2010, the average 
applied MFN tariff for agriculture products (W TO definition), was 17.3%, up from 15.7% in 2005 
(Table III.1).  The highest MFN tariffs apply to meat offal, rice, milk, and milk products (Chapter III(2)(iv)(b)). 
                                                      
6 MAGAP online information, " Objetivos Específicos ".  Viewed at:  http ://www.magap.gob.ec/mag01/ 
index.php?option=com_content&view=article&id=106&Itemid=156. 
7 For further details, see WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
8 Article 281 of the 2008 Constitution. 
9 Sectoral Council fo r Production (2010). 
10 Law on the Food Security and Sovereignty Regime, Official Register  No. 583, 5 May 2009.  Viewed 
at:  http://www.economiasolidaria.org/files/ Ley_Soberania_Alimentaria_Ecuador.pdf. 
11 Article 282 of the 2008 Constitution. 
12 A Draft Land Reform Bill regulates land expropriation, when land properties do not comply with 
social and environmental objectives.  It authorizes expropriation:  (i) when the surface of the property or mix of 
properties owned by an Ecuadorian national exceeds 500 hectares (land in excess of this surface to be 
expropriated);  (ii) when the surface of the property owned by an Ecua dorian national and/or foreigners exceeds 
300 hectares (land in excess of this surface to be exprop riated);  (iii) when the property with a surface larger 
than 25 hectares does not comply with  social and environmental objectives;  and (iv) when land is situated in 
high density zones.  It also proh ibits selling agricultural land with a su rface superior to 300 hectares to 
foreigners.  Unproductive land for a period of two years would be subject to an additional tax.  The Bill creates 
the National Land Institute (INAT), as the main author ity responsible for Ecuador' s agrarian policies (ANDES 
online information, " Propuesta Final de Anteproyecto de Ley de Tierras ".  Viewed at:  
http://andes.info.ec/media/2010/08/SIPAE-ANTE- PROYECTO-DE-LEY-DE-T IERRAS-ECUADOR.pdf). 
13 Executive Decree No. 373, 28 May 2010.  Viewed at:  http://www.magap.gob.ec/mag01/pdfs/ 
decretos/2010/decreto-373-05-may-2010.pdf). WT/TPR/S/254 Trade Policy Review 
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12. Ecuador is entitled to operate tariff-rate quotas (TRQs) for the 17 products noted in 
section I-B of Schedule CXXXIII, in the framewo rk on minimum access opportunities contained in 
the WTO Agreement on Agriculture;  during the peri od under review, these TRQs were not used, as 
most applied MFN tariffs were lower than their in -quota rates due to increases in world prices, which 
reduced the import competitiveness of the products c oncerned (Chapter III(2)(iv)(c), Table AIII.1).  
TRQs may be applied in line with a national output absorption requirement (section (2)(iv)(a)).14  
Responsibility for operating these quotas rests with  a Tariff Quota Committee comprising officials 
from MAGAP, the Ministry of Finance, and the Ministry of Industry and Productivity (MIPRO). 
13. Several agricultural products are subject to variable import levies under the Andean price 
band system (Chapter III(2)(iv)(a)), aimed at "s tabilizing the import cost of a special group of 
agricultural products whose international prices are subject to marked instability or major 
distortions".15  Upon its accession to the WTO, Ecuador undertook the commitment to gradually 
eliminate the price band system (Chapter III(2)(iv)).16  According to Decision No. 430 of the Andean 
Community, tariff duties resulting from application of  the Andean price band system may not exceed 
the WTO bound rates.17 
14. Ecuador adopted no special safeguard  measures (SSGs) during 2006-10 
(Chapter III(2)(vii)(b)).18 
15. Agricultural exports of bananas and plantains, cocoa, coffee, shrimp, and fish products are 
subject to minimum support prices, agreed to ensure a fair sale price (Chapter III(3)(ii)). 
(iv) Domestic support 
16. According to Ecuador's latest WTO notifi cation (2010), no domes tic support or export 
subsidies were granted to agricultural products during 2006-10.19  The only domestic support 
measure, applied for 2008-09 and notified to the WTO, was the " Socio Siembra " Programme granting 
support for the purchase of agrichemical inputs to low-income or resource-poor producers;  its annual budget amounted to US$51 million for 2008, and US$52 million for 2009.
20 
17. Ecuador's rising direct budget expenditure for agricultural development seems higher than the 
amount notified to the WTO.  Budget expenditure for domestic support to agriculture (including 
                                                      
14 WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
15 Andean Community Decision No. 371, 26 November 1994;  and WTO document 
WT/TPR/S/148/Rev.1, 25 July 2005.  Variable tariff duties are based on the position of the observed price of 
each product in an inte rnational reference market, with  respect to a band defined by  "floor" and "ceiling" prices 
set on the basis of historical values.  If the interna tional reference market price is below the floor price, a 
surcharge is applied on top of the common external tariff .  If the reference price on the international market is 
above the ceiling price, the common external tariff is applied, but this time with a discount.  The products 
concerned are rice, barley, yellow maize, soybeans, wheat, crude soybean oil, crude palm oil, unrefined sugar, 
white sugar, milk, pig meat, and chicken cuts. 
16 WTO document WT/L/77, 14 July 1995. 
17 WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
18 WTO documents G/AG/N/ECU/22, 8 February 2010 and G/AG/N/ECU/27, 27 May 2011. 
19 WTO documents G/AG/N/ECU/21 and G/AG/N/ECU/23, 9 February 2010;  and G/AG/N/ECU/28 
and G/AG/N/ECU/29, 27 May 2011. 
20 Aid notified under Article 6.2 of the Agriculture Agreement – "Measures Exempt from the 
Reduction Commitment – Special and Differential Treatment – Development Programmes" (WTO documents G/AG/N/ECU/21/Rev.1 and G/AG/N/ECU/25, 6 September 2010). Ecuador WT/TPR/S/254 
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fisheries) peaked at US$499.4 million in 200921, and dropped to US$303.8 million in 2010.22  
According to the authorities, this support consisted of preferential lo ans for SMEs mainly for training, 
technology transfer, crop diversification, and in frastructure projects (particularly for irrigation 
systems). 
18. Tariff-rate quotas (section (iii)) may be used only by importers who have purchased a part of 
the national output of the product under the tariff-rate quota.23  The mechanism and conditions used 
for national output absorption are established by inte r-ministerial agreements and controlled by the 
MAGAP.  Absorption contracts, for maize, soybean, and soybean oilcak e, are agreed with the private 
sector.  During the period under review, MAGA P retained the National Agricultural Product 
Exchange Corporation as the institution responsible for recording imports and exports of rice and its 
by-products, and purchase by local industries "o f products and by-products benefiting from 
international support, and operations in volving absorption of local purchase".24 
(v) Bananas 
19. Ecuador is the world's largest banana exporter and a leading producer.  In 2009, exports of 
bananas (in volume terms), the leading export crop, p eaked at almost 5.5 milli on tonnes (Table IV.1).  
During the period under review , banana production a nd productivity increased by around 8% 
(Table IV.1).  The authorities indicated that the increased productivity was mainly due to:  improved 
plant varieties, accompanied by appropriate technolog ical packages, such as irrigation, drainage, and 
fertilization systems, systematic control of disease ( sigatoka ), and integrated management of the crop. 
20. The Banana Law regulates the production, purc hase, warehousing, and export of the crop, 
with the aim of ensuring income se curity for farmers (based on the av erage cost of production, which 
is revised every three months).  Registration w ith the MAGAP is mandatory in order to purchase, 
warehouse, and export bananas;  at present 7,334 ba nana producers are registered (75% of the total 
acreage), 3% of which have an acreage exceeding 100 hectares (31% of total registered acreage).  The 
MAGAP grants a registration certificates for banana producers and traders25, valid for two years, and 
for exporters valid for one year.  The Geneva Ag reement on Trade in Bananas, signed in May 2010, 
terminated the 15 year dispute on the EC/EU bana nas regime, improving Ec uador's export prospects 
in that large market (Chapter II(7)(i)). 
21. The Banana Law established an annual mi nimum price free alongside ship "f.a.s."26, to be 
paid to the producer by the exporter, and a mini mum annual benchmark price (f.o.b.).  Prices are 
negotiated between the MAGAP, MIPRO, a nd producer and exporter representatives.27  The 
authorities indicated that the minimum annual benchmark price is set only for declaration purposes by 
the exporters to the Central Bank (Chapter III).  In  the absence of agreement, the MAGAP unilaterally 
                                                      
21 This amount includes US$2.7 million funding fo r the creation of the Ecuadorian Agency for 
Agricultural Health and Food Safety. 
22 Government support amounted to:  US$164.7 million in 2005, US$119.5 million in 2006, 
US$123.6 million in 2007, and US$265.5 million in 2008 (Central Bank of Ecuador online information, " Índice 
del Boletín Anuario N° 31:   Egresos del Presupuesto del Gobierno Central (Base caja) ".  Viewed at:  http:// 
www.bce.fin.ec/docs.php?path=./do cumentos/PublicacionesNotas/Catal ogo/Anuario/Anuari o31/IndiceAnuario3
1.htm). 
23 WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
24 WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
25 Traders must be affiliated to union s, associations or cooperatives. 
26 Defined as the average national production cost plus a reasonable profit. 
27 A Cost Committee formed by producer and exporter representatives is in charge of formulating and 
updating the national average cost, from which the annual minimum price and minimum annual benchmark price would be fixed.  The established prices are stipulated in contracts registered in the MAGAP. WT/TPR/S/254 Trade Policy Review 
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fixes the prices based on the average annual nationa l production cost.  Betw een 2010 and 2011, the 
price increase for all categories (type of box), ranged from 1.4% to 34% (Table IV.1). 
Table IV.1 
Banana production, exports, and prices 
(Tonnes and ha) 
 2005 2006 2007 2008 2009 2010a 
Production       
Cultivated sown (ha) 232,780 221, 107 211,843 221,427 229,602 232,939 
Cultivated areas (ha) 221,085 209, 350 197,410 215,521 216,115 218,793 
Production (tonnes) 6,117,422 6,127,625 6,003,238 6,700,548 6,699,565 6,563,790 
Productivity (tonnes/ha) 27.67 29.27 30.41 31.09 31.00 30.00 
Exports (tonnes) 4,653,878 4,797,795 5,057,072 5,132,784 5,473,784 4,944,968 
Prices (US$) Type of box Weight (pound) Minimum price increase (f.a.s.) Minimum annual benchmark 
price (f.o.b.) 
2010 2011 2010 2011 
 22XU 43 5.05 5.5 6.95 7.05 
 208 31 3.627 3.979 5.039 5.139 
 208 CH 31 2.976 3.828 4.388 4.488 
 2527 28 3.276 3.604 4.664 4.764 
 22 XU CS 41.5-50 4.1 5.5 5.907 6.9 
 22XUCCS 46 n.a. 3.048 n.a. 4.448 
 BB BM 15 3.3 3.55 4.622 4.75 
 STARBUCK 22 10 1.251 1.432 1.722 1.822 
n.a. Not applicable. 
a Provisional. 
Note: f.a.s. = free alongside ship.   
Source:  MAGAP, Ministerial Agreements Nos. 111, 2 July 2010;  and 21, 13 January 2011. 
22. A draft Banana Law, which was under consider ation by the National Assembly during the 
period under review, was filed on 17 June 2011.28  It stipulated the creation of a state-owned banana 
enterprise to promote market diversification for the output of SMEs. 
(vi) Fisheries 
23. Ecuador is a net exporter of fisheries products .  In 2010, exports of fish and crustaceans 
accounted for 8.3% of total merchandise exports.  The contribution of fisheries in GDP dropped slightly from 0.9% in 2005 to 0.7% in 2010 (Tab le I.2).  The catch increased from 56,328 tonnes to 
113,000 tonnes (2005-09).
29  The main catch comprises dorado, bonito (tuna), skipjack (tuna), 
albacora (tuna), and sardines. 
24. The MAGAP does not set a total allowable catch (TAC) for the Ecuadorean waters.  To 
address profitability and sustainability, Ecuador has imposed a fishing and export ban on certain species, and a limitation on the construction and impor ts of new fishing boats, except for replacement 
boats (whose capacity should not be larger than th e unit replaced).  According to the authorities, no 
access restrictions are in place in this sector. 
                                                      
28 Banana Law.  Viewed at:  http://www.magap.gob.ec/mag01/index.php?option=com_content&view= 
article&id=145. 
29 National Institute of Fisheries online information, " Estadísticas ".  Viewed at:  
http://www.inp.gob.ec/index.php?op tion=com_content&view=category&layout=blog&id=47&Itemid=65. Ecuador WT/TPR/S/254 
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25. The Under-Secretariat of Fisheries, under the MA GAP is the main authority responsible for 
Ecuador's agricultural policies.  The main legal instrument governing the sector is the 1974 Law on 
Fishing and Fisheries Development, last amended in 2010.30  The 1974 law allows foreign investment 
in the aquaculture and fisheries sectors only if the catch is processed in industrial plants located in 
Ecuador.  Foreign investment in domestic fishing operations is subject to approval by the National 
Fisheries Development Council.  According to th e authorities, in 2010, 11 fishing licences were 
granted to foreign vessels in partnership contract s with local processing industrial plants (38 in 
2009).31  The law also stipulates some restrictions for small-scale fishing32, which remains reserved 
for local fishermen, and foreign-flag shrimp and l obster trawlers are prohibited (Chapter II(8)).  In 
July 2011, several regulatory changes were under c onsideration, including the drafting of a Fishery 
Management Plan setting the guidelines for a new law on fishing, based on the Responsible Fishing 
Code, International Maritime Organization, and the port authorities. 
(3) MINING  
26. The contribution of mining and quarrying, including oil extraction to GDP increased slightly 
from 14.6% in 2005 to 15% in 2010 (Table I.2).  Its contribution to total employment increased  from 
0.5% in 2007 to 0.6% in 2010.  In 2010, exports  of mining and quarrying products (excluding oil) 
accounted for 0.6% of total merchandise exports, and involved mainly aluminium and aluminium 
alloys.  Ecuador has important gol d, copper, and silver reserves33;  the authorities expect that revenue 
from these mining activities will replace oil-relate d income in the future.  Mining received the 
equivalent of only 1.5% of total budgetary assistance  available to all sectors in 2008;  nevertheless, 
this assistance rose by 49% from 2005 to 2008, to US$245.3 million.34  According to the ATP , 
between 2006 and 2009 overall la bour productivity per worker increased by 51% to US$135,019.35 
27. The new Mining Law approved in January 200936, aims to ensure the viability and 
improvement of the sector, based on advanced technol ogies.  Mining, which is classified as a strategic 
sector under the 2008 Constitution37, is open to foreign investment for medium and large-scale mining 
concessions.  Investment in small-scale mini ng operations is reserved for Ecuadorians.38  To obtain 
mining rights in zones near international boundaries,  a prior authorization is required from the 
President and the Ministry of Defence;  however, in practice the concession is granted without this 
                                                      
30 Executive Decree No. 397, 6 July 2010. 
31 There were 10 licences granted in 2006, 30 in 2007, and 37 in 2008. 
32 For more details on fisheries, see WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
33 The expected output for gold mining is 3,000 tonnes/day, with a lifespan of 8 to 20 years, depending 
on the exploration.  Production in copper mining is estimated at between 60,000-90,000 tonnes/day, with a 
lifespan of over 20 years (Ministry of Non-Renewable Natural Resources online information, " Proyectos 
mineros estratégicos ".  Viewed at:  http://www.mrnnr.gob.ec /index.php?option=com_content&view=article& 
id=997%3Aproyectos-mineros-estrategicos&catid=32%3Aultimas-noticias&lang=en). 
34 Central Bank of Ecuador online information, " Índice del Boletín Anuario N° 31:   Egresos del 
Presupuesto del Gobierno Central (Base caja) ".  Viewed at:  http://www.bce.fin.ec/docs.php?path=./ 
documentos/PublicacionesNota s/Catalogo/Anuario /Anuario31/Indice Anuario31.htm. 
35 Sectoral Council fo r Production (2010). 
36 Mining Law, Official Register  No. 517, 29 January 2009.  Viewed  at:  http://www.cme.14dec.com/ 
files/Registro%20Oficial %20Ley%20Miner%C3%ADa%2029%20Ene%202009.pdf. 
37 Articles 1 and 408 of the 2008 Constitution stipulate that non-renewable mineral resources are the 
inalienable and imprescriptible  property of the State. 
38 Small-scale mining includes artisanal mining, meta llic-mining with a capacity of 300 tonnes/day, and 
for non-metallic mining and construction materials with a capacity of 800 m3/day. WT/TPR/S/254 Trade Policy Review 
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authorization.  The Under-Secretariat of Mining under the Ministry of Non-Renewable Natural 
Resources (MRNNR) is the main authority responsible for mining policies.39 
28. The main objectives of the May 2011 Nati onal Mining Development Plan consist of 
encouraging the development of the sector in obser vance of the national interest, and promoting an 
economically viable, socially just, environmentally  responsible, and techni cally developed mining 
industry for the rational utilization of mineral r esources and the creation of new development areas. 
29. In April 2008, the National Assembly revoked mining concessions that did not comply with 
their contractual requirements relating to:  investme nt commitments;  environmental conditions, social 
compensations and prior consultations vis-à-vis  the local communities;  debt;  concessions granted in 
protected natural areas;  and operators with more than three mining concessions.  The granting of new 
mining concessions was suspended until the approval of the 2009 Mining Law, inter alia , suspending 
large-scale mining activities for one year.  The 2009 Mining Law and its implementing regulation 
provided a new legal framework for international companies to resume exploration, pending the 
update of their mining and environmental permits.40 
30. The 2009 Mining Law sets two forms of contracts:   service providers, and mining contracts.  
Mining contracts require the payment of a minimum 5% royalty by the concessionaires on the sale of 
all primary and secondary minerals.  In addition, the concessionaries are subject to the 25% income 
tax, 12% tax on profits, 70% windfall ta x on extraordinary profits, and 12% IVA 
(Chapter III(4)(i)(b));  exports of minerals are not subject to IVA.41  The authorities indicated that the 
sector was open to foreign investment, and total investment planned by international firms like 
KINROSS, IMC, IAMGOLD, and ECSA was US$3.5 bi llion.  In July 2011, three large-scale gold 
mining contracts (Kinross Aurelian Ecuador, San Luis Minerales, Iamgold), and two for cooper 
(Ecuacorrientes, Explocobres) were under negotiati on, expecting investments of US$5.1 billion for 
the year 2016.42 
31. In January 2010, a new National Mining Company (ENAMI), was created to engage in joint 
ventures with state and private companies, a nd increase government investment in the sector.43  
ENAMI also has pre-emptive rights to establish mini ng operations in areas considered "of interest" by 
the Government and where no previous concessions existed.  The authorities indicated that ENAMI 
has no exclusive rights in areas where no concession exists. 
32. The quota of manual workers of Ecuadorian na tionality in mining operations was reduced 
from 95% to at least 80%, the duration of the initial exploration period was set for up to four years, 
the advance exploration for four additional years,  and the economic evaluation of the field for two 
more years.44 
                                                      
39 The Under-Secretariat comprise s the Agency for Mining Regulation and Control, the National 
Institute of Geological and Metal-Minerals Investigation, and the National Mining Company ENAMI. 
40 Since November 2009, ten large-scale-mining permits were renewed:  Aurelian Ecuador;  
Ecuacorriente SA;  San Luis Minerales;  Iamgold SA;  Explocobres SA;  Curimining SA;  Condor Gold SA;  
Merendon del Ecuador;  Cornerstone SA;  Santa Bárbara Cooper & Gold (Ministry of Non-Renewable Natural 
Resources, 2011). 
41 Mining Law (2009), Article 93. 
42 Ministry of Non-Renewable Natural Resources (2011). 
43 Mining Law (2009), Articles 1 and 17. 
44 Mining Law (2009), Article 75. Ecuador WT/TPR/S/254 
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(4) ENERGY  
33. Despite its important energy resources, Ecua dor still depends on imports to satisfy its 
domestic energy needs.  In 2010, it imported 64% of its diesel oil, 54% of its high octane petrol, and 
83% of its liquid petrol gas (LPG)  energy requirements.45  As a result of positive economic growth 
and improving living standards, overall energy demand has increased steadily over  the past few years, 
but Ecuador remains a small consumer of energy by  international standards.  The transport sector 
remains the major energy consumer, accounting fo r 55% of total domestic consumption in 2010, 
followed by the industrial sector (20%), and the residential sector (19%).46 
34. Ecuador plans to increase th e share of new and renewable energy, mainly hydroelectric 
power, from 44% to 95% of its needs by 2020.  The authorities indicated that public investment for 
this sector is estimated at US$8.3 billion, mainly in hydroelectric projects such as Hidroeléctrica 
Coca-Codo-Sinclair (1,500 Mw capacity).47  Regulation CONELEC 004/0448, which entered into 
force 1 January 2005, encourages investment in th e production of renewable energies (biomass, solar, 
geothermal, and wind energy).  It allows the conn ection of renewable energy generation facilities to 
the electricity grid and permits the National Ce ntre for Energy Control (CENACE) to buy the 
electricity generated at tariffs determined  by the National Electricity Council (CONELEC) 
(section (ii)).  According to the authorities, Ecuador has been developing wind and hydroelectric renewable energy projects, and studies for geothermal energy are being conducting. 
(i) Hydrocarbons 
35. During the review period, the hydrocarbons sector, which remains of key importance to the 
economy in terms of government reve nue and foreign trade (Chapters I(5) and (6), and III(4)(i);  and 
Table I.1), underwent considerable changes that, inter alia , increased the State's role in oil production, 
refining, and trade (Table IV.2).  Although the sector 's contribution to GDP declined to 14% in 2009 
(20.5% in 2008)
49, due mainly to endogenous and exogenous factors (see below), crude oil still 
accounts for 51.2% of total merchandise exports (Chart  I.1);  its contribution to total employment 
remains at 0.14%.  Between 2005 and 2010 oil production declined gradually, by 8.6% overall 
(Table IV.2) as a result of the contraction in private-sector oil activity (see below), modest 
improvement in existing state-owned fields, and low levels of investment in equipment and 
infrastructure.50  New investment by the st ate-companies PETROECUADOR and 
PETROAMAZONAS is expected to raise productivity, modernize the infrastructure, and explore new oil fields.  In 2011, US$7.9 million investment was to help increase oil output of state firms to 
384,533 barrels/day by 2013 (from 302,192 barrels /day in 2010), refining capacity of 
82,500 barrels/day, and generate a dditional income of US$34.5 million.
51  According to OPEC 
estimates, Ecuador's outstanding hydrocarbon and natu ral gas proven reserves, among the four largest 
                                                      
45 Data include imports for strategic stockpile reserves. 
46 Ministry Coordinator of Strategic Sectors (MICSE). 
47 Other hydroelectric projects include:  Toachi-Pilatón (investment US$517 million) and Sopladora 
(investment US$672 million).  For further details on Coca-Codo-Sinclair, see Coca-Codo-Sinclair online 
information.  Viewed at:  http://www.co casinclair.com/html/themes/coca/index.htm. 
48 Amended by Regulation Conelec 004/11 of 14 April 2011. 
49 Contribution to GDP was 16% in the first three quarters of 2010 (Central Bank of Ecuador online 
information, " Boletín de Cuentas Nacionales Trimestrales del Ecuador (CVE) No. 73:  valores corrientes y 
constantes USD 2000, period 2000.I-2010.III:  VAB petrolero y no petrolero, miles de USD dólares, deflactores 
implícitos, 2000=100, tasas de variación ".  Viewed at:  http://www.bce. fin.ec/frame.php?CNT=ARB0000170). 
50 Ministry of Economic Policy  Coordination (2011c). 
51 MICSE online information, " Transformación Hidrocarburos y Minas ".  Viewed at:  
http://www.sectoresestrategicos.gob.ec/portal/web/m icse/hidrocarburos;jsessionid=AAD1C16BBA3266F44444
381E439FD412. WT/TPR/S/254 Trade Policy Review 
Page 92 
  
in Latin America, amount to 6.51 billion barre ls and 8 billion cubic metres, respectively.52  Ecuador, a 
net importer of fuels, maintains stra tegic stockpiles of petroleum products. 
36. During the period under review the oil and gas sector remained under government control.  
The government-owned EP PETROECUADOR53 remains the dominant player in all oil industry 
operations (e.g. exploration, produc tion, importation, transportation, refining, and marketing) and, as 
from 2010 a new government-owned company, EP  PETROAMAZONAS, has been in place to 
explore and produce oil in specific geographical lo cations, replacing private operators who voluntarily 
decided to end their contract ual relationship (see below).54  As a result of policy and regulatory 
changes, the eight private companies (Andes, Agip, Consorcio Pegaso, ENAP SIPEC, Petrosud, 
Petrobell, Petroriental, Repsol YPF) accounted for a reduced part of Ecuador's oil output in 2011, 
i.e. 38% (2010) of total production down from 58% in 2005 (Table IV.2);  as from 2010, the State will gradually become the sole oil exporter. 
Table IV.2 
Oil production, refini ng, and trade, 2005-10 
(Millions of barrels) 
 2005 2006 2007 2008 2009 2010 
Production 194.2 195.9 186.7 184.8 177.6 177.4 
State-owned fields 82.4 90.9 94.3 97.6 102.8 110.3 
PETROECUADOR 82.4 90.9 94.3 73.9 63.6 50.4 
Petroamazonas .. .. .. 23.7 36.2 41.5 
Private companies 111.8 105.0 92.3 87.2 74.9 67.1 
Refinery 54.7 55.4 55.1 57.2 56.2 50.0 
Consumption 61.9 65.9 66.9 69.5 75.9 79.9 
Exports 131.6 136.6 124.1 127.5 119.6 124.6 
State-owned fields 53.7 72.0 66.6 77.5 79.1 90.9 
Private 77.9 64.7 57.5 50.1 40.5 33.8 
.. Not available. 
Source: Central Bank of Ecua dor and PETROECUADOR. 
37. Mineral and oil resources are owned by the State.  A priority of Ecuador's energy policy is the 
development and industrialization of its energy resources by local enterprises.  Amendments to the 
Hydrocarbons Law entered in force on 27 July 20 10, aimed at increasing State control in the oil 
sector.55  The Ministry of Non-Renewable Natural Resources is in charge of formulating energy 
policy and implementing the Hydrocarbons Law.  Since 2010, the Agency for Hydrocarbons 
Regulation and Control has been responsible fo r regulating and controlling the exploration, 
production, transport, refining, marketing, and storage of petroleum products;  the Hydrocarbons 
Secretariat has been responsible for administration of  oil reserves and oil contracts.  Ecuador has been 
a member of the Organization of Petroleum Exporting Countries (OPEC) since 1973;  between December 1992 and October 2007, Ecuador  suspended its OPEC membership.
56 
38. Industry-specific restrictions on foreign investment are in place for the oil sector 
(Chapter II(8)).  Firms signing contracts with th e State must employ Ecuadorian workers (95% for 
manual workers, 90% administrative staff, and 75% t echnical staff).  Activities related to the transport 
                                                      
52 OPEC online information, "Ecuador facts and figu res".  Viewed at:  http://www.opec.org/opec_web/ 
en/about_us/148.htm. 
53 Decree No. 315, 6 April 2010. 
54 Executive Decree No. 314, 6 April 2010. 
55 Decree-Law, Official Register  No. 244, 27 July 2010. 
56 OPEC online information, "Member Countries".  Viewed at:  http://www.opec.org/opec_web/en/ 
about_us/25.htm. Ecuador WT/TPR/S/254 
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of hydrocarbons are reserved for a state-owned ship ping company (Flopec);  however, the authorities 
indicated that, in practice, foreign shippi ng companies also transport oil shipments. 
39. During the period under review, numerous efforts to modify the terms of contracts between 
the Government and the private comp anies brought changes in the sector.57  Arbitration of disputes 
has been limited to national or regional institutions , thus leading to several unresolved disputes with 
foreign investors (Chapter II(7)(ii)).  In March 2010, the authorities announced the renegotiation of oil 
contracts with private companies, based on two elements:  (i) a model change from 
"production-sharing" to "fee-for-service", in which private companies receive a negotiated fixed fee 
for each barrel of oil produced and;  (ii) the share /tax of windfall oil revenue to be paid.  The average 
new fee per barrel of oil produced is US$32.12, down from US$34.14.  For the calculation of the 
share/tax of windfall oil revenue, the renegotiated re ference price of crude was fixed for all private 
companies at US$78 per barrel;  in other words, an in crease in the price of oil represents a net gain for 
Ecuador.  The new oil contracts contain a clause est ablishing a "margin of sovereignty" for the State 
equivalent to 25% of the crude o il gross sale revenues to finance an Oil Sovereignty Fund.  According 
to the authorities, these funds are to be used excl usively for public investment in education, health, 
and infrastructure.  While, nine ol d-type contracts were terminated58, 14 new service provider 
contracts were renegotiated.  The new contracts repr esent total private sector investment in oil fields 
of about US$1.4 million, of which US$269 million is destined for exploration.  As a result, oil 
production is to increase by 43% to attain 294.1 million barrels.59  Furthermore, the authorities 
indicated that they are open to foreign direct i nvestment under the current legal conditions of service 
contracts;  in 2011 they planned to call for tenders for the available oil fields. 
40. Government-controlled refining capacity is below domestic demand, although its three 
refineries operate at full capacity.60  As a result, Ecuador remains a net importer of refined petroleum 
products (18.5% of total imports and 5.3% of GDP  in 2010), a major source of the trade deficit.61  
Despite a progressive rise in demand in petroleu m products, output was reduced mainly due to the 
obsolete infrastructure, and the temporary closure fo r maintenance during 60 days of the Esmeraldas 
refinery.62  Work is to start in 2012 on building a new refinery (Refinery of the Pacific–Eloy Alfaro), 
a joint venture between PETROECUADOR (51% of shares) and Petróleos de Venezuela SA PDVSA 
(49%) with a planned capacity of 300,000 b/d.63  The main objective of the refinery is to satisfy 
domestic demand for fuels and petrochemicals, a nd export surplus to the sub-region and other 
strategic markets.  Once the refinery is operational, imports of oil and oil prod ucts are expected to be 
reduced by up to US$3 million per year. 
                                                      
57 In 2005, all petroleum exploration and production c ontracts had to be renegotiated.  Amendments to 
the hydrocarbon law in 2006 modified, unilaterally, the terms of oil production sharing contracts;  it imposed a 
50% "windfall oil share tax" on privat e companies' extraordinary revenues.  The State's share of the "windfall 
tax" on extraordinary revenues was increased to 99 % in 2007, and then reduced to 70% in 2008.  On 
28 December 2007, a new tax law was passed, stipulatin g that the State's share of  extraordinary petroleum 
revenues was decreased to 70%, but only for contracts signed after th e tax law was approved.  As from 
1 January 2010, further amendments to the tax Code imposed stricter conditions.  Private companies are 
required to pay the windfall tax monthly, as opposed to year-end (in force since 2007). 
58 The companies that have not yet renegotiated thei r contracts are:  Petrobras (Ecuador TLC), EDC, 
CNPC, Canada Grande, Suelopetrol, Consorci o Petrolero Gran Colombia, and Bellweather. 
59 Ministry of Non-Renewable Natural Resources (2011). 
60 PETROECUADOR operates the three oil refineri es:  Esmeraldas, la Libertad, and Amazonas. 
61 Ministry of Economic Policy Coordination (2011c). 
62 Ministry of Economic Policy Coordination (2011c). 
63 Refinery of the Pacific-Eloy Alfaro online information.  Viewed at:  http://rdp.ec/index.php? 
option=com_content&view=frontpage&Itemid=1. WT/TPR/S/254 Trade Policy Review 
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41. Retail prices of fuels are subsidized (Chapter  III(4)(ii)(c) and (iii)(b)), and the Government 
retains the right to control petroleum prices in a state of emergency.  In 2010, the price of a barrel of petrol sold in Ecuador was US$43.1 less than its import price, resulting in total annual support of 
US$1.8 million (Table IV.3).
64 
Table IV.3 
Fuel prices, 2005-10 
(US$ per barrel) 
 2005 2006 2007 2008 2009 2010 
P e t r o l        
Import price  74.7 84.8 92.2 108.8.5 80.4 98.3 
Domestic sale price 55.1 55.1 55.1 55.2 55.1 55.2 
Forgone revenue (US$) 117,930 183,397 288,432 397,400 236,749 524,270 
Diesel       
Import price  79.8 89.3 91.4 126.0 78.6 96.4 
Domestic sale price 40.6 39.8 40.1 41.9 39.1 40.2 
Forgone revenue (US$) 318,289 499,917 607,317 937,535 539,131 1,093,801 
L P G        
Import price  46.8 56.7 65.4 71.7 45.1 54.9 
Domestic sale price 10.2 10.3 10.7 12.0 11.2 12.5 
Lost revenue (US$) .. .. 476,353 534,473 277,317 360,571 
Total forgone revenue (US$) .. .. 1,269,033.6 1,830,822.4 905,524.1 1,835,674.5 
.. Not available. 
Source: Central Bank of Ecuador online information, " Información Estadística Mensual N° 1907 (Enero 2011):  Ingresos y 
egresos por comercialización in terna de derivados importados ".  Viewed at:  http://www.bce.fin.ec/ 
docs.php?path=/home1/estadisti cas/bolmensual/IEMensual.jsp. 
(ii) Electricity 
42. Despite rising power output, Ecuador continues to run a trade deficit in electricity 
(Table IV.4).  In 2010, most of Ecuador's electri city demand was met by thermal plants (55%), while 
the rest was provided by its hydro-electric plants (45%), and imports from Colombia (4%).  The 
number of reported failures, provoking power  cuts, was 549 (44 less than in 2009). 
Table IV.4 
Electricity, 2005-10  
(GWh) 
 2005 2006 2007 2008 2009 2010 
Consumption 13,315.27 12,765.10 14,183.72 14,853.68 15,493.66 16,782.13 
Losses  3,402.66 3,495.62 3,575.29 3,607.80 3,339.59 3,289.87 
Exports 16.03 1.07 38,39 37.53 20.76 10.06 
Imports 1,723.45 1,570.47 860.87 500.16 1,120.75 872.90 
Production (net) 13,010.52 14,691.32 16,936.53 17,9998.86 17,733.07 19,209.17 
Hydraulic 6,804.03 7,032.94 8,945.67 11,148.76 9,116.31 8,618.83 
Thermal 6,206.47 7,658.37 7,989.88 6,847.39 8,613.54 10,586.90 
Solar 0.01 0.01 0.02 0.03 0.01 .. 
Wind n.a. n.a. 0.96 2.68 3.20 3.43 
.. Not available. 
n.a. Not applicable. 
Source:  CENACE (2009), Informe Anual 2008 .  Viewed at:  http://www.cena ce.org.ec/index.php?option=com_ 
 phocadownload&view=category&id =6:phocatinfanuales&Itemid=50#. 
                                                      
64 Central Bank of Ecuador online information, " Información Estadística Mensual Nº 1907 
(Enero 2011):  Ingresos y egresos por comercialización interna de derivados importados ".  Viewed at:  
http://www.bce.fin.ec/docs.php?path=/home1/estad isticas/bolmensual/IEMensual.jsp;  WTO document 
WT/TPR/S/148/Rev.1, 25  July 2005;  and Peláez-Samaniego et al.  (2007). Ecuador WT/TPR/S/254 
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43. Since July 2008, the sector has b een restructured:  two state companies have been established:  
the National Electricity Corporation (CNEL) in December 2008, and the Electric Corporation of 
Ecuador (CELEC) in January 2009.  Government-o wned CELEC dominates the electric power sector 
and is entrusted by law with the development, generation, transmission, export, import, and 
distribution of electricity in the entire territory.  The company oversees the market, which comprises, 
five electricity-generating companies, of which four are private65, and one transmission company, the 
TRANSELECTRIC.  In January 2010, CELEC was transformed into a state-owned strategic 
enterprise, comprising six electricity-generating companies (three hydro and three thermal) and TRANSELECTRIC.
66  CNEL, which was created through the merger of ten electricity distribution 
companies67, became operational in March 2009 and is entr usted with transmission and distribution of 
electricity in certain regions.  The authorities indicated that another six electricity distribution companies retained their status, until new legislation for the sector enters in force.
68  They noted that 
private investors may participate in power gene ration (including renewable energy), under the 
conditions established by Law on the Electricity S ector, its rules and regulations, as well as the 2010 
Organic Code of Production, Trade and Investment.69 
44. Since July 2006 the Committee for Execution of Policy in the Electricity Sector (CEPSE) has 
been in charge of:  formulating and implementing policies;  preventing misuse of electricity;  and 
addressing tariff losses problems.  The National Electricity Council (CONELEC) oversees the electricity market and is in charge of developing an Electrification Plan;  and the National Centre for 
Energy Control (CENACE) coordinates the National Interconnected System and the administration of 
the wholesale electrical market.  A new electricity mandate issued in July 2008, established a single 
electricity tariff for distributors.  A cross-subsid y from high-consumption residential users to other 
consumers remains in place in the form of higher tariffs (Table IV.5, Chapter III(4)(iii)(b)).  According to the authorities, due to the lack of inter est by the private sector in electricity distribution, 
this activity was taken over entirely by the State,  therefore electricity rates are not fixed in a 
competitive environment;  budgetary support ex ceeding US$250 million is required each year 
(Chapter III(4)(ii)(c)).  New electric ity tariffs are under consideration. 
Table IV.5 
Electricity tariffs, 2011 
Category  Range (KWh, 
unless otherwise specified) Price (US$/kWh) 
Empresa Eléctrica 
Quito Corporación 
Guayaquil Rest of the 
countrya 
Residential (low and medium) 0-50 0.068 0.068 0.081 
 51-100 0.071 0.071 0.083 
 101-150 0.073 0.073 0.085 
 151-200 0.080 0.080 0.087 
 201-250 0.087 0.086 0.089 
 251-300 0.089 0.093 0.091 
Table IV.5 (cont'd)
                                                      
65 The power generating companies are:  Paute SA, Hidroagoyán SA;  Guayas SA;  Esmeraldas SA;  
and Pichincha SA. 
66 Executive Decree No. 220.  Viewed at:  http ://www.celec.com.ec/index.php?option=com_docman& 
amp;task=cat_view&amp;gid=56&amp;Itemid=&amp;lang=es. 
67 These companies were:  Eléctricas;  Esmeraldas SA;  Regional Manabí SA;  Santo Domingo SA;  
Regional Guayas-Los Ríos SA;  Los Ríos CA;  Península de Santa Helena SA;  El Oro SA;  Bolívar SA;  and 
Regional Sucumbíos SA.  They continue to function as regional offices. 
68 These were:  Quito SA;  Regional del Sur SA;  Regional Norte SA;  Regional Centro Sur CA;  
Provincial Cotopaxi SA;  and Riobamba SA. 
69 Regulation No. 002-11 of CONELEC authorized private investment in new generating power 
projects not covered by the Electrification Plan. WT/TPR/S/254 Trade Policy Review 
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Category  Range (KWh, 
unless otherwise 
specified) Price (US$/kWh) 
Empresa Eléctrica 
Quito Corporación 
Guayaquil Rest of the 
countrya 
 301-350 0.089 0.093 0.093 
 351-400 0.089 0.093 0.095 
 > 400 0.089 0.093 0.095 
General (low)     
Commercial, official entitie s 0-300 0.061 0.062 0.072 
 > 300 0.084 0.090 0.083 
Industrial-artisanal 0-300 0.052 0.054 0.063 
 > 300 0.084 0.090 0.079 
Social assistance 0-100 0.035 0.049 0.024 
 101-200 0.038 0.054 0.026 
 201-300 0.041 0.058 0.028 
 > 300 0.079 0.095 0.053 
General (high)  7 a.m.-10 p.m. 0.051  0.046 0.061 
 10 p.m.-7 a.m. 0.045 0.041 0.049 
a Includes all electricity companies, except Empresa Eléctrica Qu ito and Corporación para la Administración Temporal Eléctrica 
 de Guayaquil. 
Source:  Information provided by the Ecuadorian authorities. 
(5) MANUFACTURING  
45. The contribution of manufacturing in GDP (excluding petroleum refinery) increased from 
8.9% in 2005 to 9.3% in 2010 (Table I.2).  Its share in total employment remained relatively stable at 
11% during 2007-10.  According to  the ATP (Chapter II(2) and (5)) , overall productivity per worker 
increased 22% between 2006 and 2009 to US$5,417.70  In 2009, exports of manufactures accounted 
for 8.5% of total merchandise exports, up from 7.3% in 2005.  The main export products were machinery, automotive products, and textiles.  Chem icals, machinery and transport equipment, and 
automotive products were among the major manufactures imports. 
46. Under Ecuador's Industrial Po licy 2008-12, the authorities aim to promote Ecuador's 
integration into the global economy.   Accordingly, and in line with the 2008 Constitution and the 
December 2010 Organic Code of Production, Trade and Investment (Chapters II(8), and III(4)(i)(c) 
and (ii)(c)), local manufacturing activities will receiv e support by means of various policy instruments 
favouring domestic investors and priority sectors, including selective import substitution activities.
71  
Furthermore, policies are aimed at boosting dome stic production, developing economies of scale, 
preventing monopoly and oligopoly practices, and ensuring food and energy self-sufficiency.72  
According to the ATP, the aim is to improve  the productivity of MIPYMES through policies and 
programmes based on good manufacturing practices, energy efficiency, and access to technology and 
quality.73  The National Plan on Good Living envisages 5% growth of non-oil GDP and a 25% 
increase in average labour productivity for the period 2009-13. 
                                                      
70 Sectoral Council fo r Production (2010). 
71 The priority sectors consist of new investment in jurisdictions outside Quito and Guayaquil, in:  
agriculture and forestry products;  biotechnology and applied software;  fresh, processed or frozen food;  
logistics services;  metal mechanics;  petrochemicals;   pharmaceuticals;  renewabl e energies.  The selective 
import substitution products, as defined by the presiden cy, are fertilizers, agrichemicals, pesticides and 
fungicides, soaps, detergents and cosmetics, other ch emicals, ceramics, tiles and floors, textiles, clothing, 
footwear, leather, manufacture of radios, televisions, ph ones, electronics in general, and electrical appliances. 
72 MIPRO (2009b). 
73 Sectoral Council fo r Production (2010). Ecuador WT/TPR/S/254 
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47. Responsibility for industrial policy formul ation and implementation rests with the 
Under-Secretary of Productivity, within the Mi nistry of Industry and Productivity (MIPRO). 
48. During the period under review, average tariff pr otection was reduced and remained at less 
than half of the levels applicable  to the agriculture sector (Table III.1).  In 2011, the average applied 
MFN tariff on industrial products (HS25-97), was 7.6% (8.2% under the WTO definition for 
non-agricultural products).  In 2008, budget out lays to support manufacturing amounted to 
US$37.4 million, or one sixth of the amount available to agricultural activities (section (2)(iv)).74 
(i) Car assembly industry 
49. Ecuador's car assembly industry consists of th ree companies, Autos y Máquinas del Ecuador 
AYMESA (Kia), Corporación MARESA (Mazda), and Omnibus BB (34.1% state-ownership) 
(Chevrolet), producing mostly for the domestic ma rket and the Andean Community countries.  In 
2010, domestic assembly (installed) capacity was 48,600 vehicles per year up from 43,393 in 2005.75  
Exports accounted for around one third of total sales in 2005, and 55,310 vehicles were imported 
(60,841 in 2010). 
50. During the period under review, domestic s upport was available through the Automotive 
Promotion Law, based on the Andean Automotiv e Complementarity Agreement.  This Law was 
superseded by the 2010 Organic Code of Production,  Trade and Investment, which contains incentives 
for this and other sectors. 
51. Under the Automotive Complementary Agreem ent between Ecuador, Colombia, and the 
Bolivarian Republic of Venezuela, in force since 1 January 2000 for a renewable ten year period, a 
common external tariff has been in place, at 35% for imports of light vehi cles (category 1), and for 
category 2 vehicles, a 10% tariff for Ecuador and 15% for Colombia and the Bolivarian Republic of 
Venezuela.  Vehicles produced in any of the signatory  countries that satisfy the specific rules of origin 
established by the Andean Community are accorded dut y-free access to the other signatories' markets.  
The agreement prohibits the import of used motor vehicles and parts, in order to guarantee maximum 
safety, environmental conservation, consumer prot ection, and industrial property conditions, but also 
to protect the domestic car industry.76  In March 2010, Ecuador notifie d its intention to rescind the 
agreement effective 1 September 2011 (Chapter III(2)(x )).  According to the authorities, Ecuador and 
Colombia are renegotiating a new bilateral agreement.77 
52. In 2009, more than two thirds (71.3%) of Ecuador's vehicles expor ts (HS 8703) were to 
Colombia, and around one third (28.7%) to the Bo livarian Republic of Venezuela.  Imports of 
vehicles from the Andean community dropped sharply between 2005 and 2009 from 26.4% to 2.9%.78   
53. Between September 2007 and end-September 2010, a US$80.8 million public transport 
vehicles scrapping scheme RENOVA79 has been implemented by the National Commission on Road 
                                                      
74 Government support amounted to  US$13.3 million in 2005 and 20 06 and US$27.2 million in 2007 
(Central Bank of Ecuador online information, " Índice del Boletín Anuario N° 31:   Egresos del Presupuesto del 
Gobierno Central (Base caja) ".  Viewed at:  http://www.bce.fin.ec/docs.php?path=./documentos/ 
PublicacionesNotas/Catal ogo/Anuario/Anuario31/ IndiceAnuario31.htm). 
75 Andean Community online information, " Política Automotriz:  Producción Subregional de 
vehículos ".  Viewed at:  http://www.comunidadandina.org/automotor/automotor_3.htm. 
76 Andean Community online information, "Productive and Commercial Development:  Automotive 
Policy".  Viewed at:  http://www.comunidadandina.org/ingles/automotive_policy.htm. 
77 The Bolivarian Republic of Venezuela re scinded the agreement in November 2009. 
78 UN Comtrade Database, SITC Rev.3. WT/TPR/S/254 Trade Policy Review 
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Transport and Safety (CNTTTSV) under the Mini stry of Transport and Public Works (MTOP)80, and 
the National Financial Corporation (CFN).81  RENOVA measures comprised duty-free treatment for 
CKD kits, and a commitment by domestic car assembly operators to sell vehicles destined for the public transport of persons and goods  at pre-set prices.  The CFN granted preferential credit loans (not 
exceeding 9.8%) to consumers, in order to trade older vehicles for newer, more environmentally 
friendly, ones.  The plan aimed to modernize the publ ic transport fleet (taxis, vans, buses, trucks, and 
passenger vehicles) (Chapter III(4)(ii)(c)).
82  According to the authorities, up to December 2010, 
6,430 vehicles were scrapped, 57% of which we re replaced with imported vehicles representing 
forgone customs revenue of US$6.3 million. 
54. Overall MFN tariff protection for this industry h as been reduced:  the simple average tariff on 
motor vehicles is 9.6%, down from 12.2% in 2005,  although passenger vehicles are subject to a 
relatively high tariff protection of 40% (up fro m 35% in 2005 and 2011) (Chapter III(2)(iv)(a)). 
(ii) Agri-industry 
55. Ecuador's agri-industry comprises 129 industries, and employed almost one third of the active 
population in 2006.  In 2006, the MAGAP elaborated an Integrated Diagnosis of the Agri-Industry, 
funded by the Inter-American Institute for C ooperation on Agriculture (IICA).  The diagnosis 
revealed serious problems of viability, and l ack of competitiveness, presumably because of low 
productivity, at national a nd international level. 
56. The main objectives of the National Development Plan for Agri-Industry 2008-12, which was 
validated in April 2008, were to:  (i) promote th e development of the sector (including leather, 
cigarettes, and textiles);  (ii) reduce import de pendency on primary products (raw materials for 
agri-industry);  (iii) foster employment;  and (iv) use the sector as a poverty-reduction instrument for rural areas and micro and SMEs.
83  The Plan was allocated US$9.1 million from MIPRO for the 
period January 2009-December 2011, to finance activiti es related to the drafting of a specific law for 
the subsector, the modernization of its legal frame work, the development of agri-industry enterprises, 
research and development, marke ting, and quality improvement.84 
57. A National Project for the Integral Developmen t of Agri-industrial Chains was launched on 
31 July 2010 at a budgeted cost of US$20.3 million for the period 2011-15.  Its main objectives were 
to, inter alia :  define the roles, responsibilities, rights, a nd obligations of each of the stakeholders in 
agribusiness sector;  compile agri-industrial data, for efficient decision making;  identify the capacity 
of agri-industrial sectors;  and strengthen the de velopment of chains.  The project identified, inter 
alia, 27 agricultural products with value-adding potential, and 12 products identified on import 
substitution studies issued by the MCPEC-MIPRO. 
(6) SERVICES  
(i) Features and multilateral commitments 
58. In 2010, the contribution of the services sector  to GDP was 56.5% (57.8% in 2005) and its 
share in total employment exceeded 50% (Table I.2) .  The most important activities were retail trade 
                                                                                                                                                                     
79 Executive Decrees Nos. 636, 17 September 2007;  and 445, 30 July 2010. 
80 National Commission on Road Transport and Sa fety.  Viewed at:  http://www.cntttsv.gov.ec/. 
81 MIPRO was in charge of implementing the plan until 30 July 2010. 
82 Resolution No. 090-DIR-2009-CNTTTSV, 12 November 2009. 
83 MIPRO (2009a). 
84 MIPRO (2009a). Ecuador WT/TPR/S/254 
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(11.8%), transport (6.2%), and finance and insura nce (2.8%).  Ecuador has traditionally been a net 
importer of services, and since 2005, has recorded deficits in service trade (around 3% of GDP) (Chapter I).  Between 2005 and 201 0, exports, consisting mainly of travel and transport, rose by 
35.1% to US$1.4 billion.  Imports, largely travel, tr ansportation, and professional services, were about 
US$2.96 billion in 2010.
85 
59. During the period under review, state contro l (banking sector) and pa rticipation in the 
services sector (transport, telecommunications, and postal) seems to have increased progressively, as a result of implementing the 2008 Constitution.  Acco rding to the authorities, Ecuador's endogenous 
development advocates the participation of the State as a regulator.  According to ECLAC, the 
process of privatization in Ecuador was limited comp ared with other countries in the region, therefore 
its effect on levels of investments has been minima l;  one of the few companies that was privatized 
was Ecuatoriana de Aviación,  which no longer exists. 
60. Overall Ecuador's GATS commitments cover a bout 40% of all services subsectors in the 
Services Sectoral Classification List.  Ecuador unde rtook specific commitments in several activities, 
e.g. business services (including certain professional and computer-related services), communications 
(limited to value-added telecom services), cons truction, distribution (limited to wholesale), 
environmental, financial, health and social, tour ism, recreational, and transport services (limited to 
certain road, air, and auxiliary transport).  Un committed sectors include basic telecommunications, 
audiovisual, postal-courier, maritime tr ansport, retailing, and education services.
86 
(ii) Policy objectives 
61. The authorities consider that Ecuador undertook important services commitments at the time 
of accession to the WTO;  therefore, there are no plans for additional commitments under the DDA.  
Ecuador's main strategy is to preserve suffici ent regulatory flexibility to promote the sector's 
development.  Any bilateral agreement on trade in  services must comply with the 2008 Constitution, 
and the National Plan for Good Living (Chapter II(5)). 
(iii) Financial services 
62. Financial (and insurance) services accounted for 2.8% of GDP and 0.8% of total employment 
in 2010 (Table I.2).  Assets held by all fi nancial institutions totalled US$28,758 million.87  Ecuador's 
financial industry is not very larg e, and is not offering increasingly sophisticated products;  it remains 
quite fragmented and the Government retains contro l over several major financial institutions.  The 
effect of the recent financial crisis on Ecuador's fi nancial sector has been severe, resulting in the 2008 
debt default on Global Bonds 2012, 2015, and 2030.88 
63. The main laws governing the financial sector ar e:  several articles of the 2008 Constitution, 
the Monetary Law, the General Law on Financia l Institutions, the Regulatory Law on the Maximum 
Effective Cost of Credit, the Law on Financ ial Safety Net, and the Cooperatives Act. 
                                                      
85 For more detailed statistic on Ecuador's trade in services, see Central Bank of Ecuador online 
information, " Índice del Boletín Anuario N° 32" .  Viewed at:  http://www.b ce.fin.ec/docs.php?path=./ 
documentos/PublicacionesNota s/Catalogo/Anuario /Anuario31/Indice Anuario31.htm. 
86 For more details on GATS commitments, see WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
87 Central Bank of Ecuador online information, " Información Estadística Mensual N° 1907 
(Enero 2011) ".  Viewed at:  http://www.bce.fin.ec/docs. php?path=/home1/estadisticas/bolmensual/IE 
Mensual.jsp. 
88 Economist Intelligence Unit (2010). WT/TPR/S/254 Trade Policy Review 
Page 100 
  
64. Under the 2008 Constitution the Government promotes access to financial services and the 
democratization of credit.  The Constitution also  notes that credit targets the enhancement of 
productivity and thus competitiveness of specific sect ors in order to meet the needs and priorities 
defined in the National Development Plan.  Usury89 remains prohibited under the 2008 Constitution.90 
65. During the period under review, the authorities amended part of the Central Bank Charter 
eliminating its autonomy and redefining the compos ition of its Board.  The new Charter, which 
entered in force on 22 September 2009, gives th e Executive full control over the Central Bank's 
policies and operations (Chapter I).91  Other changes regulated capital outflows, reducing banks' 
external assets and repatriating a mi nimum of 45% of their deposits, and raised the rate of the tax on 
foreign exchange exit from 1% to 2% (Chapter III(2)(v)(d) and (4)(i)(c)). 
66. Following the implementation of the Law on the Creation of the Financial Safety Net92, a new 
financial preventive control system was introduced .  As a result, the Deposit Guarantee Agency 
(AGD) was dissolved in 2010, with the Ministry of Finance taking over its func tions of supervision of 
banking, insurance, and securities instituti ons, as well as financial holding companies.93 
(a) Banking 
67. Since the last TPR of Ecuador, concentration in the banking sector has increased.  Ecuador's 
market remains dominated by three major priv ately owned nationwide full service banks and one 
state-owned bank (Banco del Pacífico), which t ogether account for about 62% of total banking 
assets.94  In December 2010, there were a total of 85 financial institutions (89 in 2005)95, of which 
23 were domestic private banks, 5 state-owned banks, 1 local branch of a foreign bank (Citibank), 
41 saving and credit cooperatives, 4 mutual associations , and 10 financial associations.  At the end of 
2010, total bank deposits were US$17.6 billion, of  which domestic banks held 82%, state-owned 
banks 2%, and other fina ncial institutions 15%.96  Total loans were US$1.9 billion at end 2010, with 
domestic banks holding 78.9%, state-owned banks 9. 7%, local branch of foreign bank 1%, and other 
financial institutions 10.9%. 
68. The Government retains ownership of several fi nancial institutions repr esenting 22% of total 
banking assets in 2010.  The most important are five government-owned banks, accounting for 8%  of 
total bank assets, and the private banks, owned by  the State (Pacífico and Cofiec), accounting for 
12.3% of total private bank assets.  The government -owned banks comprise:  the Banco Nacional de 
Fomento (BNF) mainly finances agricultural activiti es;  the Corporación Financiera Nacional (CFN) 
is for industry;  the Banco Ecuatoriano de la Vivienda for housing;  and the Banco del Estado  targets 
infrastructure projects.  The Banco del Instituto Ec uatoriano de Seguridad Social (BIESS) was created 
                                                      
89 Usury is defined as the charging of financial services directly or indirectly, more than allowed by 
law, or other usury benefits. 
90 Articles 292, 299, 303, and 308 to 312 of the 2008 Constitution. 
91 Ley Reformatoria a la Ley de Régimen Monetario y Banco del Estado .  Viewed at:  
http://www.bce.fin.ec/documentos/ElBancoCent ral/leyReformatoriaaLeyRegimenMonetario.pdf. 
92 Law on the Creation of the Financial Safety Net (Ley s/n), 31 December 2008, Official Register  
Suplement No. 498.  Viewed at:  http://www.superban.gov.ec/medios/PORTALDOCS/downloads/normativa/ 
Ley_creación_red_segurid ad_financiera.pdf. 
93 Executive Decree No. 202, 15 January 2010. 
94 Banco Pichincha, Banco de Guayaquil, Banco del Pacífico, and Produbanco. 
95 Microfinance Information Exchange online information, "Microfinance in Ecuador" .  Viewed at:  
http://www.mixmarket.org/mfi/country/Ecuador/report#node-28418. 
96 Central Bank of Ecuador online information " Información Estadística Mensual No. 1907 
(Enero 2011) ".  Viewed at:  http://www.bce.fin.ec/docs. php?path=/home1/estadisticas/bolmensual/IE 
Mensual.jsp. Ecuador WT/TPR/S/254 
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in 2009 and became operational in October 2010.97  The BIESS manages the investment portfolio of 
the social security institute.  The Government al so holds stakes in other important commercial banks. 
69. The Ecuadorian microfinance market comprises a large number of stakeholders.98  The Banco 
Solidario reported more than 100,000 borrowers.  As of December 2009, the top five micro finance 
institutions accounted for more than half (54.7%) of  total borrowers, and, in  volume terms, accounted 
for 59.7% of the total accrued gross por tfolio at the close of the year.99 
70. Commercial banks are allowed to conduct all the usual banking activities, for example, 
lending, accepting deposits, managing trust funds a nd public property, a nd handling domestic and 
foreign remittances.  They may invest in gove rnment bonds, short-term notes, and corporate and 
financial bonds.  Commercial banks are not a llowed to conduct insurance activities directly. 
71. Foreign investment in the financial sector companies is not subject to shareholding 
limitations. 
72. The Superintendency of Banks and Insuran ce is responsible for the supervision and 
formulation of general policy for the financial sy stem.  The Superintendency is responsible for 
safeguarding the stability, soundness and correct  functioning of the institutions under its 
jurisdiction.100  According to the authorities, its main f unctions are to:  (i) strengthen the legal and 
regulatory framework, based on principles, internati onal standards, and best practices in force;  
(ii) ensure proper risk management by strengthe ning supervision;  (iii) protect the rights of 
consumers;  (iv) strengthen the organizational a nd human resources manageme nt;  (v) ensure quality 
and security of information and computer services w ith advanced technology;  and (vi) optimize the 
management of financial resources. 
73. In June 2010, the overall capital adequacy ratio of the banking institutions was 10%.   
According to the authorities, the Basel II framewo rk was implemented in 2004, and the gradual 
implementation of the Basel III framework is ongoing. 
74. Ecuador's major banks' interest rate spread increased between 2005 and 2007, then decreased 
slightly as from 2007 in virtually all fi nancial institutions (Chart IV.1). 
 
                                                      
97 Law (without number), Official Register  No. 587, 11 May 2009. 
98 Other stakeholders are:  private banks (FINCA, ProCredit);  RENAFIPSE, Red Nacional de Finanzas 
Populares y Solidarias del Ecuador;  CEPESIU, Centro de Promoción y Empleo para el Sector Informal Urbano;  
ACSB, Asociación Nacional de Cooperativas de Ahorro  y Crédito;  FECOAC, Federación de Cooperativas de 
Ahorro y Crédito del Ecuador;  UCACSUR, Unión de Cooperativas de Ahorro y Crédito del Sur;  and UCANOR, Unión de Cooperativas de Ahorro y Crédito del Norte. 
99 Microfinance Information Ex change online information, " Microfinance in Ecuador ".  Viewed at:  
http://www.mixmarket.org/mfi/country/Ecuador/report#node-28486. 
100 WTO document WT/TPR/S/148/Rev.1, 25 July 2005. WT/TPR/S/254 Trade Policy Review 
Page 102 
  
0.02.04.06.08.010.012.014.016.0
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Source:   Data provided by the Ecuadorian authorities.Per centChart IV.1
Interest rate spread, 2005 - 10
Lending rate
Savings rate
Interest spread
 
(b) Insurance 
75. As of 31 December 2010, there were 44 insuran ce companies, of which 3 were local branches 
of foreign insurance companies.   The life insurance sector included 27 domestic companies and 
1 local branch of foreign companies.  There were also two reinsurance companies.  Participation of 
foreign companies in the local market remains lim ited.  Both the life and general insurance sector 
remain relatively concentrated.  In December 2010, the top five general insurers accounted for 37% of 
premium business holding and 35%  of the industry assets. 
76. In accordance with the General Law on Insura nce, life insurance companies may not offer 
non-life insurance services, and vice versa.  Alt hough insurance firms may not engage in activities 
that are unrelated to their business purpose, they may form part of a financial group consisting of a bank, a financial company or an investment and deve lopment corporation, together with financial or 
auxiliary service companies.  The General Law on Insurance prohibits the signing of insurance 
contracts in Ecuador with firms established abro ad to cover risks that may occur in Ecuador.
101 
77. Commercial presence is necessary to access the Ecuadorian insurance market.  Subject to 
approval by the Superintendent of Banks and Insu rance, foreign firms may establish subsidiaries and 
branches to operate in Ecuador, fore ign firms need to be represented by a general agent, whose power 
will be pre-qualified by the Superint endency of Banks and Insurance, and must be registered in the 
commercial register.  A US$3.9 million minimum paid-in capital requirement applies for the establishment of new insurance and reinsuranc e companies.  The paid-in minimum capital 
requirement for intermediary re insurance companies should not be less than 20% of the minimum 
capital requirement for insurance companies, and th e requirement for insurance agencies should not 
be less than 3% of the minimum capital required fo r insurance companies.  Branches or agencies of 
                                                      
101 WTO document WT/TPR/S/148/Rev.1, 25 July 2005. Ecuador WT/TPR/S/254 
 Page 103 
 
 
foreign insurance or reinsurance companies may me et these requirements with the capital assigned by 
their headquarters. 
(c) Securities 
78. The main legal instrument governing the sect or is the Securities Law, which set out 
regulations on the public offering, issuing, and tr ading of securities.  Two stock exchanges (Bolsa de 
Valores de Guayaquil, and Bolsa de Valore s de Quito) operate in the country, listing 
104 non-financial companies (August 2010).  A draft Bill, creating a single stock exchange has been under consideration in the National Assembly since 2009. 
(iv) Telecommunications and postal services 
(a) Telecommunications 
79. Ecuador's penetration rates for telecom services,  which are low by international and regional 
standards, continued to increase during the period und er review (Table IV.6).  Number portability has 
been required for mobile services since 2009.
102  At the end of 2010, there were seven fixed-line 
providers (five private companies) and three mobile service providers103;  three 3G mobile service 
providers had been licensed and had 15.1 million subscribers. 
Table IV.6 
Telecommunications market, 2006-10 
Market 2006 2007 2008 2009 2010 
Mobile phone Penetration ratea (%) 63.3 72.9 84.7 96.1 106.3 
 Subscribers (million) 8.5 9.9 11.7 13.5 15.1 
Fixed telephone Penetration ra te (%) 13.2 13.4 13.8 14.4 14.4 
 Subscribers (million) 1.8 1.8 1. 9 2.0 2.0 
Internetb Penetration rate (%) 6.1 8.5 9.5 14.6 21.4 
 Users (million) 0. 8 1.2 1.3 2.0 3.0 
Broadbandc Penetration rate (%) 1.9 2.2 7.0 11.4 18.9 
 Subscribers (million) 0.2 0.3 1. 0 1.6 2.7 
a Market penetration refers to serv ice subscribers per 100 inhabitants. 
b Internet users refers to individuals who accessed the internet during the year. 
c Broadband subscribers are the subs cribers of ADSL, cable modem. 
Source:  Information provided by the Ecuadorian authorities. 
80. Telecommunications forms part of Ecuador's strategic sectors.104  The Ministry of 
Telecommunications (MINTEL) is responsible for formulating the overall policy and the 
telecommunications industry.105  The Superintendency of telecommunications sector is SUPERTEL.  
The authorities indicated that fo r certain types of telecommunication services there are no limitations 
on foreign investment. 
81. The state-owned telecom company Corporación Nacional de Telecomunicaciones EP (CNT) 
retains a dominant position in the fixed telephone market.  In 2008, the two state-owned regional 
                                                      
102 Number portability allows consumers to change service provider without changing their telephone 
number, thus allowing for the developmen t of more competitive service offerings. 
103 Fixed-line operators:  CNT, Ecuadortelecom SA, Setel SA, Linkotel SA, Etapatelecom SA, Starsat 
SA, Global Crossing Comunicaciones Ec uador SA, Grupo Coripar SA, and Etapa.   Mobile operators:  Telesca 
SA, Conecel SA, Otecel SA, and Telesca Alegro PCS. 
104 Article 313 of the 2008 Constitution. 
105 Decree No. 8, 13 August 2009. WT/TPR/S/254 Trade Policy Review 
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operators, ANDINATEL and PACIFICTEL106, were merged under the CNT.   CNT faces considerable 
competition in the mobile phone services market, wher e it holds a modest 2% market share, compared 
with 69.8% for CONECEL and 28.2% for OTECEL .  A Telecommunications Development Fund 
(FODETEL) finances projects for basic telecom servi ces in rural and marginal urban areas, i.e. 
universal service.  All telecommunication service providers holding a licence are required to 
contribute the equivalent of 1% of their service revenues from the previous year. 
82. Since 2000, the CNT has maintained price caps (Table IV.7) on the services provided by the 
telecom operators (fixed-line local, dom estic and international, broadband).107  Price caps in mobile 
phone services were lowered in 2008, other than t hose of CNT, which benefits from the higher 
ceilings. 
Table IV.7 
Price caps 
(US$) 
Fixed-line servicesa Category Ab Category Bc Category Cd 
Inscription  44.0-633.0 60.0-633.0 60.0-633.0 
Basic fee  2.0-23.53 6.9-23.53 9.9-23.53 
Local calls (per minute) 0.012-0.12 0.012-0.12 0.012-0.12 
Domestic long-distance calls (per minute) 0.056-0.49 0.056-0.49 0.102-0.49 
Mobile services 2005 2006 2007 2008 2009 2010 
CONECEL 0.50 0.50 0.50 0.22 0.22 0.22 
OTECEL 0.50 0.50 0.50 0.22 0.22 0.22 
CNT 0.49 0.49 0.49 0.49 0.49 0.49 
a Price caps vary acco rding to the company. 
b Popular. 
c Residential. 
d Commercial. 
Source: Information provided by the Ecuadorian authorities. 
(b) Postal services 
83. Since 2010, postal services have been a monopol y of the state-owned Ecuador Postal 
Services, which has post offices throughout the te rritory and offers all usual mailing services, 
including universal service.  Fore ign ownership is allowed in courie r services, but their activities are 
limited to delivery of business documents, goods, and parcels.  The National Postal Agency, managed 
by Ministry of Telecommunications, is the regulatory body.108 
(v) Transport 
84. Transport services, another strategic sector, acc ounted for 6.2% of GDP in 2010.  Under the 
2008 Constitution the Government regulates the sector, promotes the development of public transport, 
and establishes a policy of differential tariffs.109  Development of transport infrastructure is a key 
priority;  a new international air port is under construction in Quito. 
                                                      
106 For more details about these companies, see WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
107 CONATEL Resolution No. 456/2000 .  Viewed at:   http://www.cnt.com.ec/pdfs/NORMAS%20 
REGULATORIAS/TARIFAS_MAXIMAS_PAR A_EL_SERVICIO_DE_TELEFONIA.pdf. 
108 Decree No. 8, 13 August 2009 derogating Executive Decree No. 1207, 17 July 2008.  Viewed at:  
http://www.agenciapostal.gov.ec/index.php?option= com_content&view=article&id=6&Itemid=21. 
109 Articles 313 and 394 of the 2008 Constitution. Ecuador WT/TPR/S/254 
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(a) Maritime transport 
85. Some 81.5% of Ecuador's international trade in volume terms is carried by ship.  According to 
the authorities, 3,800 vessels were handled in  Ecuadorian ports in 2010 (42 million tonnes).110 
86. The National Merchant Marine and Ports Counc il (NMMPC) is responsible for regulating the 
maritime transport sector, including ports.  Domestic waterborne (cabotage services)111 freight and 
passenger transport are reserved by law for vessels flying the Ecuadorian flag.112  Transport of 
hydrocarbons from and to Ecuador is also reserve d for national shipping company (Flopec), in which 
the State holds at least 51% equity stake.  Tran sport of non-oil cargo is handled by international 
shipping companies. 
87. The main provisions governing the sector are c ontained in the 2008 Constitution, Regulation 
of Maritime Activities, and amendments to the Na tional Merchant Marine Development Law.  The 
National Transport Council, created in 2007 and opera tional from 2010, is to coordinate the Strategic 
National Transport Plan. 
88. There are four main international ports , and three oil terminals in Ecuador.113  Guayaquil is by 
far the most important, handling over 90% of Ecuador container traffic, 72% of its total imports, and 
63% of its total exports, by volume (2008).114  During the period under review, the Government 
implemented important investment projects in port infrastructure.  Domestic and foreign vessels are subject to the same port dues for the same shipping routes.  The ports are the property of the State, 
although port services have been granted to pr ivate operators in the port of Guayaquil. 
(b) Air transport 
89. About 7.5%  of Ecuador's international trade in vol ume terms was carried by air in 2010.  
They are 4 international airports and 23 domestic airp orts.  All airports are owned and operated by the 
State, except for Aeropuerto International Mariscal  Sucre (Quito), where the concession was granted 
to Corporación Quiport SA, CORPAQ.
115  In order to boost the air transport industry, a new airport is 
being constructed by CORPAQ, near Quito (Tabab ela), with a 4,100 m runway, to enable a wider 
range of non-stop operations for wide-body aircraft.  The airport is expected to be operational at the 
end of 2012.  CORPAQ has also been granted th e concession of the new airport for a period of 
35 years following its opening. 
90. The supply of air transport services requires a state permit.  Domestic air services can be 
operated only by persons of Ecua dorian nationality or legal entities established in Ecuador, whether 
local or foreign-owned.  Rights to provide air transport services are granted through concessions or 
operation permits.  Concessions on domestic or international air services are awarded to firms 
established in Ecuador under domestic or foreign ownership.  Foreign firms not established in 
                                                      
110 The average time for loading and unloading is:  Esmeralda 23 hours/boat;  Manta 24 hours/boat;  
Guayaquil 20 hours/boat;  and Puerto Bolívar 41 hours/boat. 
111 Cabotage is the transport of goods or passengers between two points in the same country by a vessel 
registered in another country. 
112 For more details on maritime transport, see WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
113 The ports are Guayaquil, Esmerald as, Puerto Bolívar, and Manta;  a nd the oil terminals are Balao, la 
Libertad, and El Salitral. 
114 Under-Secretariat for Ports and Maritime and Inland Waterways Transport (2009). 
115 Corpaq consists of Aecon Construction Group (Canada), Airport Development Corporation 
(Canada), Andrade Gutierrez C oncessões (Brazil), and HAS Development Corporation (United States) (Quiport  
online information, "Quiport".  Viewed at:  h ttp://www.quiport.com/www/fro ntEnd/main.php?idSeccion= 
3039&idPortal=1). WT/TPR/S/254 Trade Policy Review 
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Ecuador may apply for a permit to pr ovide international services.  Concessions last for five years, and 
permits for three;  both are renewable and non-transferable.116 
91. At the end of 2010, 18 airlines provided flight  services in Ecuador:  15 were foreign airlines 
operating to and from the country, and 3 were dom estic air carriers providing both domestic and 
international air services.  In 2010, domestic ai rlines accounted for 31.6% of total international 
passengers and 21.2% of international cargo volum e.  The leading carrier was Lineas Aéreas 
Nacionales de Ecuador, AEROLANE (LAN Ecuador), with a 20.6% market share in international 
passenger volume and 17.9% in international car go volume.  In domestic passenger volume by 
domestic airlines, TAME accounted for 43.8% in 201 0, followed by Aerogal (27.2%), Icario (7.5%), 
and Air Cuenca (1%). 
92. Airlines may set their international tariffs freely.  Since October 2007, jet aviation fuel has 
been available at local prices (around 40% less than international prices) to certain local airlines 
(TAME, Icario, Air Cuenca, Aerogal, and AERO LANE) under certain conditions, i.e. aircraft 
registered in Ecuador, aircraft built as from 1990, a nd aircraft with an Ecuadorian crew and with its 
operational base in Ecuador. 
93. Ecuador maintains 26 bilateral servi ces agreements on air transport.117  Under Decision 
No. 582 of the Andean Community, Ecuador grants  fifth freedom traffic rights for regular and 
non-regular passenger and cargo air services.118 
94. Under the GATS, Ecuador undertook not to su bject consumption abroad and commercial 
presence in the case of aircraft repair and maintenance services to a limitation on market access or 
national treatment.  Ecuador did not include any other sector relating to air transport in its Schedule of 
Specific Commitments. 
(vi) Tourism 
95. In 2010, 1.1 million internati onal travellers visited Ecua dor, an increase of about 22% 
compared with 2005 (859,888).  Total tourism rece ipts amounted to US$786.5 million in 2010 (1.36% 
of GDP).119  The Ministry of Tourism is responsible fo r policy formulation and implementation in the 
sector.  There are no market access restrictions or national treatment limitations on non-Ecuadorian 
providers to engage in tourism businesses.  Tax incentives for tourism activities were suspended in 
2010 (Chapter III(4)(i)(c)).  Budgetary outlays allocated to the tourism  sector in 2010 totalled 
US$17.7 million, up from US$4.2 million in 2005 (Chapter III).120  According to the authorities, the 
support consists of training, infrastructur e development, and promotion activities. 
                                                      
116 WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
117 Argentina (2005), Belgium (2007), the Plurinational State of Bolivia (2004), Brazil, Colombia 
(2004), Costa Rica, Chile (2007), C uba, France, Germany, Guatemala, H onduras, Luxemburg (2006), Mexico, 
the Netherlands, Panama, Paraguay, Peru, Qatar (2011), the Russian Federation, Singapore (2009), Spain, Switzerland, the United Arab Emir ates (2011), the United Kingdom (2006), and the United States. 
118 WTO document WT/TPR/S/148/Rev.1, 25 July 2005. 
119 In 2009, 968,499 international travellers vis ited Ecuador, and total tourism receipts amounted to 
US$674.2 million (Ministry of Tourism online information, " Indicadores Económicos ".  Viewed at:  
http://www.turismo.gob.ec/images/stories /pdf/INDICADORES_ECONOMICOS(f).xls). 
120 During the period under review, government support amounted to US$4.2 million (2005), 
US$6.7 million (2006), US$7.9 million (2007), US$1 6.7 million (2008), and US$15.7 million (2009). Ecuador WT/TPR/S/254 
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