WORLD TRADE  
ORGANIZATION  G/SG/N/1/ECU/4 
10 October 2005 
 
 (05-4571) 
Committee on Safeguards Original:   Spanish 
  
 
NOTIFICATIONS OF LAWS, REGULATIONS AND ADMINISTRATIVE 
PROCEDURES RELATING TO SAFEGUARD MEASURES 
 
ECUADOR 
 
 
 The attached communication, dated 30 September 2005, is being circulat ed at the request of 
the delegation of Ecuador.  
_______________ 
 
  In accordance with Article 12.6 of the Agreement on Safeguards, Ecuador notifies the Committee under your chairmanship of Resoluti on No. 320 of the Foreign Trade and Investment 
Council (COMEXI), published in Official Register  No. 105 of 16 September 2005, which lays down 
an internal administrative proce dure for the establishment of a safeguard mechanism to prevent 
products originating in and arriving from the Peopl e's Republic of China from causing or threatening 
to cause market disruption for the domestic industr y producing like or directly competitive products.  
  The relevant part of the Resolution published in Official Register No. 105 is attached. G/SG/N/1/ECU/4 
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 No. 320 
 
THE FOREIGN TRADE AND INVESTMENT COUNCIL   
WHEREAS: 
  The Government of Ecuador ratified the Fi nal Act Embodying the Results of the Uruguay 
Round of Multilateral Trade Negotiations, the Minist erial Decisions, Declara tions and Understandings 
and the Marrakesh Agreement Establishi ng the World Trade Organization (WTO); 
 
 By decision dated 10 November 2001, the Ministerial Conference of the World Trade Organization (WTO) approved the accession of the People's Republic of China to the Marrakesh 
Agreement Establishing the World Trade Organizatio n (WTO), on the terms and conditions set out in 
China's Protocol of Accession to the WTO; 
 
 The Report of the Working Party on the Accession of China was attached to the 
aforementioned Protocol and forms an integral part thereof;   The Protocol of Accession establishes a trans itional safeguard mechanis m in the event that 
specific products of Chinese origin are imported into the territory of any Member of the World Trade 
Organization (WTO) in such increased quantities and under such conditions as to cause or threaten to 
cause market disruption in the importing country;   The Protocol of Accession further provides that if an action by the People's Republic of China 
or any other Member of the World Trade Orga nization (WTO) under paragraphs 2, 3 or 7 of 
Section 16 of the Protocol causes or threatens to cau se significant diversion of trade into its market, 
measures may be taken to address such trade diversion;   The Report of the Working Party on the Accessi on of China, which forms part of China's 
Protocol of Accession to the World Trade Organization (WTO) also provides that any WTO Member may, in certain circumstances, apply quantitativ e restrictions on imports of Chinese origin; 
 
 The Foreign Trade and Investment Council, meeting on 31 August 2005, decided to issue 
regulations and implementing rules to ensure th e effective application of the aforementioned 
mechanisms;  and,  
 By virtue of the powers conferred upon it by Article 11 of the Foreign Trade and Investment 
Law (LEXI),  DECIDES:   Article 1. – To establish a safeguard mechanis m in order to prevent products originating in 
and arriving from the People's Republic of Chin a from causing or threatening to cause market 
disruption for the domestic industry produc ing like or directly competitive products. 
  Article 2. – The Foreign Trade and Inv estment Council (COMEXI) may apply safeguard 
measures, subject to a report by the investigating authority of the MICIP, when it considers that 
products originating in and arriving from the People' s Republic of China are being imported in such 
increased quantities and under such conditions as to cau se or threaten to cause market disruption for 
the domestic industry producing like or directly competitive products. 
  G/SG/N/1/ECU/4 
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  Article 3. – There shall be deemed to be ma rket disruption when imports, originating in and 
arriving from the People's Republic of China, of a product similar to or directly competing with the product manufactured by the domestic industry are increasi ng, in absolute or relative terms, at a rate 
so rapid as to cause serious injury or a threat of serious injury to the domestic industry.  Market 
disruption shall be determined on the basis of object ive factors, such as the volume of imports, the 
impact of the imports on prices of like or directly competitive items and the im pact of such imports on 
the domestic industry producing like or directly competitive products. 
  Article 4. – For the purposes of the decision wh ether to implement safeguard measures within 
the meaning of this resolution, the procedure laid  down herein shall apply once the consultations 
provided for in paragraphs 1, 2 and 3 of Section 16 of China's Protocol of Accession to the World 
Trade Organization (WTO) have been completed.   Article 5. – For the purposes of this resolution:  
(a) "Investigating authority" shall be interp reted as referring to the Trade Directorate of 
the Ministry of Foreign Trade, Industrialization, Fisheries and Competitiveness; 
 
(b) "days" shall be interpreted as referri ng to calendar days, except where expressly 
indicated as working days; 
 
(c) "interested parties" shall be interpreted as referring to the exporters, foreign producers 
or importers of a product under investigation, or the trade or business associations a majority of members of which are producers, exporters or importers of the product;  the government of the exporting Member;  and the producers of the like product in the national territory or the trade or business asso ciations a majority of members of which 
are engaged in production of the like product in the national territory.  The above list 
shall not preclude the investigating aut hority from allowing domestic or foreign 
parties other than the aforementioned to be  joined as interested parties;  and, 
 
(d) "domestic industry" shall be interpreted as referring to producers as a whole of like or 
directly competitive products in the nati onal territory or those of them whose 
collective output of like or directly competitive products constitutes a major 
proportion of the total domestic  production of such products. 
  Article 6. – Applications for the implementa tion of measures provided for herein shall be 
submitted to the Under-Secretariat of Foreign Trad e and Integration of the MICIP by the domestic 
industry which considers itself to be affected by the in crease, in absolute or relative terms, in imports 
of products originating in the People's Republic of China.  Applications shall be accompanied by the 
evidence necessary to determine wh ether the imports are causing or threatening to cause market 
disruption for the domestic industry produc ing like or directly competitive products. 
  Article 7. – Applications shall satisfy all th e requirements set out for that purpose in the 
Annex to this resolution. 
  Article 8. – Within five working days of recei ving an application, the investigating authority 
shall inform the applicant in writing whether the application satisfies the requirements established in 
the Annex to this resolution.  Where the investiga ting authority finds that pertinent information is 
missing, it shall request the applicant to subm it further details within a period not exceeding 
45 working days, which may not be counted towards th at set for the investigating authority to decide 
the conformity of the application.  The request for additional information may be made once only.  
Failure to submit the missing information by the above time-limit shall be deemed to constitute 
abandonment of the application, which shall then be shelved. G/SG/N/1/ECU/4 
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 Within 15 working days of notifying conformity , the investigating authority shall assess, in 
the light of considerations of public interest and overall economic policy, the appropriateness of 
initiating an investigation.  Where there is to be an investigation, the Under-Secretary for Foreign 
Trade and Integration shall issue the resolution so stating within eight working days, for immediate 
publication in the Official Register.  The inv estigating authority shall notify the Committee on 
Safeguards of the World Trade Organization (WTO ) immediately after the resolution has been 
published in the Official Register.  Where the invest igating authority deems it inappropriate to initiate 
an investigation, the decision shall be notified in writing to the interested parties and the application 
shall be shelved. 
 
 Article 9. – The duration of the investigation for the application of a safeguard measure may 
not exceed ten (10) months following the initiation of the investigation.  In exceptional circumstances, 
COMEXI may, upon good cause shown, decide to ex tend the investigation by two (2) additional 
months. 
 
 Article 10. – In the course of the investiga tion, the investigating authority shall provide 
exporters, importers, chambe rs of production and other interested  parties with adequate opportunity, 
by way of notification, to submit their views and evidence concerning the requested measure and as to 
whether it will serve the public interest.  
 Article 11. – Any information which is by nature confidential or which is provided on a 
confidential basis shall be treated as such, subj ect to the investigating authority's approval. 
  Article 12. – If the investigating authority cons iders that a request for confidentiality is not 
warranted and if the supplier of the information is  either unwilling to make the information public or 
to authorize its disclosure in generalized or su mmary form, such information may be disregarded 
unless it can convincingly be demonstrated from appr opriate sources that the information is correct. 
  Article 13. – Interested parties providi ng confidential information shall furnish non-
confidential summaries thereof.  The summaries shal l be in sufficient deta il to permit a reasonable 
understanding of the substance of the informat ion submitted in confidence.  In exceptional 
circumstances, the parties may indicate that the in formation is not susceptible of summary, in which 
case a statement of the reasons why summarization is not possible shall be provided.   Article 14. – The investigating authority shall base the final technical report on the 
information provided by the interested parties.  The report shall be signed by the Under-Secretary for 
Foreign Trade and Integration a nd submitted to the Foreign Trade and Investment Council (COMEXI) 
for examination and decision.   The report shall consider:   (a) The volume of imports; 
 
 (b) the effect of the imports on prices of like or directly competitive products in the 
domestic market;  and, 
  (c) the effect of the imports on the dom estic industry producing like or directly 
competitive products. 
  The above list is not exhaustive and may incl ude other such indicators as the investigating 
authority may deem useful in preparing the report.   G/SG/N/1/ECU/4 
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  The final technical report forms an integral pa rt of the investigation and shall therefore be 
submitted in accordance with the terms of Article 9 herein.   Article 15. – On the basis of the aforementioned report and in the light of considerations of 
public interest and overall economic policy, COMEXI shall make a decision on the measure to apply.  
Definitive measures shall be notified to th e Committee on Safeguards of the World Trade 
Organization (WTO) within fifteen (15) days of publication of the resolution in the Official Register.   Article 16. – A safeguard measure may take the form of:  
 (a) A quantitative restriction; 
  (b) increased import duties;  or,   (c) any other such measure as the investig ating authority may suggest, with a view to 
withdrawing concessions or limiting imports. 
  Article 17. – The duration of a definitive safegua rd measure shall be restricted to the period 
necessary to prevent or remedy market disrup tion for domestic producers of like or directly 
competitive products suffering injury or threat of inju ry.  The measure shall apply for two (2) years at 
most. 
 
 Article 18. – Without prejudice to Articles 3 and 4 herein, the investigating authority may, in 
critical circumstances in which any delay would cause damage that it would be difficult to repair, propose that COMEXI adopt, within 10 working da ys of the initiation of the investigation, a 
provisional safeguard measure on the basis of a prelim inary determination that imports have caused or 
threaten to cause market disruption.  Once adopted, such a measure shall immediately be notified to 
the Committee on Safeguards of the World Trade Organization (WTO) and a request for bilateral consultations shall be made.  The duration of the provisional measure shall not exceed two hundred 
(200) days, during which the pertinent requirements of paragraphs 1, 2 and 5 of Section 16 of the 
Protocol of Accession of the People's Republic of  China to the World Trade Organization (WTO) 
shall be observed. 
 
 Article 19. – For the adoption of a provisiona l safeguard measure, the investigating authority 
shall draw up a preliminary technical report cont aining all relevant factors of an objective and 
quantifiable nature which may serve to evaluate the relevance of applying the measure and its possible 
impact on the domestic market. 
 
 The preliminary report shall be based on clear  evidence that increased imports have caused 
market disruption and shall be submitted with a recommendation to COMEXI for approval.  The 
provisional measure shall be adopted, through a CO MEXI resolution, within fifteen (15) working 
days of the date on which the investiga ting authority submitted its recommendation. 
 
 Article 20. – The resolution providing for th e adoption of a provisional safeguard measure 
shall contain the following:  
(a) A determination as to the increase in imports, in absolute and relative terms; 
 
(b) a description of the product to which the measure applies; 
 
(c) a list of the producers who constitute the domestic industry; 
 G/SG/N/1/ECU/4 
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 (d) a preliminary determination as to the existence of clear ev idence that increased 
imports are the cause of market disruption, including an account of the economic factors analysed for the purpose of the determination; 
 
(e) the level of the provisional safeguard measur e, i.e. the amount of the tariff increase;  
and, 
 
(f) the duration of the provisional measure. 
  Article 21. – The duration of a safeguard measure may be extended provided that its 
continued application is found to be necessary in or der to prevent or remedy market disruption. 
  Article 22. – Extensions shall be decided in conformity with the procedure governing 
investigations, as laid down herein.  
 The investigating authority shall request info rmation on a regular basis from the company or 
sector protected by the safeguard measure concer ning the evolution of pr oduction, sales and other 
factors that led to the adoption of the measure, in  order to determine whether the measure should be 
revoked or not.   Article 23. – There shall be significant divers ion of trade where the investigating authority 
considers that a measure adopted by the People's Republic of China or any other Member of the 
World Trade Organization (WTO) and applied to a specific product originating in the People's 
Republic of China in order to prevent or remedy  disruption in the market of the WTO Member 
concerned, causes or threatens to cause diversion of  trade in this product into the Ecuadorian market. 
 
 Article 24. – The application of objective crite ria in order to determine whether measures to 
prevent or remedy market disruption cause or thre aten to cause significant diversion of trade shall 
include consideration of, inter alia , the following factors: 
 
(a) The actual or imminent increase in the share of the domestic market taken by imports 
from the People's Republic of China; 
 
(b) the nature or extent of the measure adopt ed or proposed by the People's Republic of 
China or other Members of the World Trade Organization (WTO); 
 
(c) the actual or imminent increase in the volume of imports from the People's Republic 
of China that is due to the measures adopted or proposed; 
 
(d) conditions of supply and demand in the local market for the products at issue;  and, 
 
(e) the volume of exports from the People's Republic of China to the Member(s) of the 
World Trade Organization (WTO) applying a provisional or definitive safeguard 
measure. 
  Article 25.- If the measure adopted pursuant to paragraphs 2, 3 or 7 of Section 16 of the 
Protocol of Accession of the People's Republic of  China to the World Trade Organization (WTO) 
causes or threatens to cause significant diversion of  trade into the Ecuadorian market, the Government 
of Ecuador may request consultations with the Pe ople's Republic of China and/or the WTO Member 
concerned.  The consultations shall be held within th irty (30) days of the request being notified to the 
WTO Committee on Safeguards.   G/SG/N/1/ECU/4 
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  Article 26. – If the consultations fail to lead to any agreement with the People's Republic of 
China and/or the WTO Member(s) concerned within  sixty (60) days of the notification, the 
investigating authority may recommend that COMEXI  decide the withdrawal of concessions accorded 
for or otherwise limit imports from the People's Repub lic of China of the product at issue, to the 
extent necessary to prevent or remedy trade divers ion.  Any such measures as may be adopted by 
COMEXI shall be notified immediatel y to the WTO Committee on Safeguards. 
  Article 27. – Anti-trade diversion measures sha ll be reviewed when a Member of the World 
Trade Organization (WTO) having provided for th e imposition of measures against trade diversion 
under the terms of this resolution notifies th e Committee on Safeguards of the World Trade 
Organization (WTO) of any modification of the measure in question. 
  Article 28. – The Protocol of Accession of th e People's Republic of China to the World Trade 
Organization (WTO) provides for the expiry of th e transitional safeguard mechanism for specific 
products twelve (12) years after its entry into for ce.  Consequently, any measure adopted under this 
resolution shall lapse at the latest on 11 December 2013. 
  Article 29. – COMEXI may delegate to the Executive Commission the task of implementing 
the rules it deems necessary for the applica tion of the provisions laid down herein. 
  Article 30. – The present resolution shall enter into effect on the day following its publication 
in the Official Register. 
  The present resolution was adopted by the Dir ectorate of the Foreign Trade and Investment 
Council (COMEXI) in plenary sessi on on Wednesday, 31 August 2005. 
 
 (f) Manuel Chiriboga Vega, Under-Secretary for Foreign Trade and Integration and 
Secretary of COMEXI. 
  
ANNEX 
 
 Requirements for applications to initiate i nvestigations for the imposition of safeguard 
measures are as follows:  
1. A description of the like or dir ectly competitive product, including: 
 
(a) The tariff heading; 
 
(b) the similarity of the imported product to the product produced by the 
domestic industry;  and, 
 
(c) a brief description of the manufacturing process (by production chain). 
 
2. The names and addresses of the firms or entities represented in the application, along 
with documentary evidence of legal representation of the firms or the trade association appearing on behalf of the domestic industry. 
 
3. The percentage of domestic production of  the like or directly competitive product 
accounted for by those firms and proof of  the representativeness of the domestic 
industry. 
 G/SG/N/1/ECU/4 
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 4. Import data for the previous three cal endar years or another period adequately 
justified as representative for the industry, which show the increase in the imports 
under investigation in absolute terms or re lative to domestic production.  Statistical 
information shall be obtained from the Central Bank of Ecuador, the Ecuadorian 
Customs Corporation and, for comparative purposes, from other statistics sources at 
the international level. 
 
5. Data on the volume and value of domes tic production of the like or directly 
competitive product for the previous three calendar years or another period adequately justified as representative for the industry.  Such information shall as far 
as possible be submitted on a monthly basis. 
 
6. Quantitative data indicating the degree of market disruption for the period referred to 
in the previous paragraph, including the following (as applicable): 
 
(a) A significant idling of installed production capacity in the domestic industry, 
including data on the closure of plants or underutilization of production capacity; 
 
(b) the inability of a significant number of domestic firms to carry out production 
activities at a reasonable level of profit; 
 
(c) the level of unemployment actually or potentially generated; 
 
(d) changes in price, production, productivity and sales levels; 
 
(e) the extent to which firms in the do mestic industry are unable to generate 
adequate capital to finance the modern ization of their domestic plants and 
equipment, or are unable to maintain  existing levels of expenditure for 
research and development; 
 
(f) the extent to which imports are being diverted to the Ecuadorian market 
owing to restrictions in third-country markets or seasonal surpluses at source 
or points of origin;  and, 
 
(g) causal link:  an explanation and a d escription, based on the relevant data, of 
the presumed causes of the market disrup tion and the extent to which these 
are attributable to the imports under investigation, and an explanation 
demonstrating that the market disruption cannot be attributed to causes other than the imports. 
 
7. If critical circumstances resulting in the application of a provisional measure are 
alleged, data on the following factors: 
 
(a) The factual grounds which serve to dem onstrate that the increased imports of 
the product under investigation are causing the market disruption, and that any delay in taking measures would cause damage which it would be difficult 
to repair;  and, 
 
(b) a declaration specifying the level of the provisional measure requested and the 
underlying justification for that remedy. 
  G/SG/N/1/ECU/4 
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  In my capacity as owner/legal head of the firm  the data concerning which are set out herein, I 
declare on oath that all of the information detail ed above, consisting of ... pages, is truthful.  I 
undertake to report forthwith any changes to any or all of the data supplied herein. 
 
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