WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/TPR/G/254 
10 October 2011  
 
(11-4811) 
Trade Policy Review Body Original:  Spanish 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by 
 
ECUADOR 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Ecuador is attached. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Ecuador. Ecuador WT/TPR/G/254 
 Page 3 
 
 
  CONTENTS 
 
  Page 
1. INTRODUCTION 5 
2. GENERAL SOCIO-ECONOMIC ENVIRONMENT 5 
2.1 E CONOMIC GROWTH  5 
2.2 I NFLATION AND PRICES  8 
2.3 F ISCAL SECTOR  9 
2.3.1 Central government budget 9 
2.3.2 Income received 9 
2.3.3 Accrued expenditure 11 2.3.4 Central government balance 13 
2.4 P
UBLIC DEBT 13 
2.4.1 Domestic public debt 13 2.4.2 External public debt 14 
2.5 P
OVERTY AND INEQUALITY  14 
3. ECONOMIC POLICY 18 
3.1 T HE 2008  CONSTITUTION AND THE NATIONAL PLAN FOR GOOD LIVING  18 
3.2 D OLLARIZATION  27 
3.3 F ISCAL POLICY  28 
3.4 F INANCIAL POLICY  30 
3.5 L ABOUR MARKET POLICY  32 
4. EXTERNAL SECTOR 33 
4.1 T RADE POLICY  33 
4.1.1 New trade policy approach 33 4.1.2 Foreign trade agenda 34 
4.1.3 Export and investment promotion 41 
4.2 T
RADE TRENDS  43 
4.3 F OREIGN DIRECT INVESTMENT  56 
5. TRADE REGULATIONS AND POLICIES 57 
5.1 I NSTITUTIONAL FRAMEWORK :  COMMITTEE ON FOREIGN TRADE (COMEX) 57 
5.2 T ARIFF POLICY  59 
5.3 N ATIONAL LOGISTICS STRATEGY  62 
5.4 C USTOMS FACILITATION FOR TRADE  64 
5.5 T ECHNICAL STANDARDS  65 
5.6 S ANITARY AND PHYTOSANITARY STANDARDS  66 
5.7 I NTELLECTUAL PROPERTY  68 
5.8 Q UALITY POLICY  69 WT/TPR/G/254 Trade Policy Review 
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    Page  
5.9 C OMPETITION AND CONSUMER PROTECTION POLICIES  69 
5.10 G OVERNMENT PROCUREMENT  71 
5.11 E NVIRONMENTAL AND TRADE POLICY  73 
5.12 N ATIONAL TRANSPARENCY AND ANTI-CORRUPTION PLAN 74 
6. SECTOR  POLICIES 76 
6.1 A GRICULTURE , LIVESTOCK , AQUACULTURE AND FISHERIES  76 
6.2 A GRO-INDUSTRY  78 
6.3 M ANUFACTURING  78 
6.4 T OURISM  80 
6.5 S TRATEGIC SECTORS  81 
 
 Ecuador WT/TPR/G/254 
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  1. INTRODUCTION 
1. Six years after Ecuador's first WTO trade polic y review (2005-2011), major political, social, 
institutional and economic changes have occurre d in the country, based on a new constitution 
approved by the Ecuadorian people in 2008, wh ich inaugurated a new development model. 
2. The new economic and trade development mode l, described in this report, has been 
formulated through legislation supplementing the Constitution, and a new vision prioritizing trade, 
first and foremost, as a tool for development,  combating poverty, and reducing inequalities. 
3. This report firstly considers Ecuador's genera l socio-economic environment, summarizing its 
economic evolution and addressing issues such as inflation, the fiscal sector, the government budget, 
public debt, and policies and strategies to eradicate poverty. 
4. It then discusses economic policy, which, by  definition, encompasses  the guidelines and 
directives through which the government steers or defines general measures to support the adopted development model, based on the new 2008 Constit ution, the National Plan for Good Living ( Plan 
Nacional del Buen Vivir  (PNBV)), dollarization, fiscal and fina ncial policies, and the important labour 
market policy. 
5. It also analyses the external sector, with the new trade-policy approach, as well as the 
multilateral and bilateral foreign trade agenda, the policy to promote exports and investments, and 
foreign direct investment (FDI). 
6. In relation to trade regulations and policies, th e report explains the current regulations and 
their institutional framework, as well as tariff policy, customs and trade facilitation, technical, sanitary 
and phytosanitary standards, the national logisti cs strategy, intellectual property, quality policy, 
transparency and the fight against co rruption, and environmental policies. 
7. Lastly, it has been considered important to develop sectoral policies, many of which are 
horizontal, and relate basically to crop farming, livestock, aquaculture and fisheries, agribusiness, 
manufacturing industry, tourism and strategic sect ors - the latter being of vital importance to 
complement and underpin the new development model and its future sustainability, through 
infrastructure building. 
2. GENERAL SOCIO-ECONOMIC ENVIRONMENT 
2.1 E
CONOMIC GROWTH  
8. Although the Ecuadorian economy c onsolidated its recovery in 2010, progress was held back 
somewhat by the poor performance of the external sector.  The growth of loans and deposits in the 
financial system, tax revenue (as a proxy for ec onomic activity), the reduction of unemployment and 
improvements in job quality in the main branches of economic activity, all combined to generate 
economic growth of 3.58 per cent in 2010. 
9. Value-added is growing in the non-oil sector, but not in the oil sector.  The halting of private 
sector investment needed to increase oil production, the 60-day shutdown of the Esmeraldas refinery, 
and an increase in fuel imports to compensate for the reduction in hydroelectric-power generation, 
contributed most to the decline in oil value-added in 2010.  The renegotiation of oil contracts by the WT/TPR/G/254 Trade Policy Review 
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  national government, and the coming online of the M azar hydroelectric plant helped to reverse the 
downward trend in oil value-added in 2011.1 
10. Oil value-added dropped by 2.65 per cent to make  a negative contribution of 0.37 per cent in 
2010.  This adverse result is partly the consequence of a year of oil production shortfalls for private 
companies, owing to the uncertainty surrounding the conditions of the new oil contracts, for which 
negotiations lasted until November.  While output from State-owned crude oil companies grew by 
7 per cent2 in that period, production by private companies shrank by 9.6 per cent.3  Accordingly, 
domestic crude oil production expanded by just  0.56 per cent overall in 2010.  The recurrent 
maintenance tasks on the Esmeraldas refinery , needed to improve production processes, caused 
stoppages resulting in a 10.25 per cent fall in the do mestic production of re fined petroleum products 
in 2010.  Moreover, demand for thermoelectric generation grew in response to a drop in hydroelectric power generation caused by the drought in the first few months of the year.  This energy deficit caused a substantial increase in fuel imports, of 33.4 per cent in volume and 72.9 per cent in value 
terms (owing to a 25.7 per cent rise in the prices of petroleum products)
4, to increase thermoelectric 
power generation and satisfy the nation's energy demand. 
11. Non-oil value-added grew by 4.47 per cent, c ontributing 3.45 per cent to the 3.58 per cent 
GDP growth recorded in 2010.  Recovery has been widespread among nearly all branches of 
economic activity since the 2009 crisis, except ag riculture, which posted a year-on-year drop of 
0.68 per cent in 2010. 
12. Several sectors of activity made significant c ontributions to the gross value-added generated 
in the Ecuadorian economy in 2010.  Manufact uring and trade contributed 0.92 per cent each, 
followed by other services, which accounted for 0.87 per cent.  Construction contributed 0.62 per 
cent, thanks to its vigorous growth, particularly in the fourth quarter of 2010.  These activities have 
jointly generated 62 per cent of gross value-adde d in the economy over the last ten years, and 
accounted for 84 per cent of urban and rural employment nationwide in December 2010. 
13. Financial intermediation expande d strongly by 17.33 per cent, its highest growth rate since 
2006 when it grew by 20.58 per cent;  and, in 2010, the volume of credit was up by 30.7 per cent on 
the previous year. 
14. The wholesale and retail trade sectors returned to growth in 2010 (6.32 per cent), as the 
balance-of-payments safeguard measur es gradually expired.  The latte r had imposed tariffs on several 
products, particularly consumer goods , imports of which increased by 14.1 per cent in volume terms, 
fuelled mainly by 42.3 per cent growth in imports of  consumer durables.  Other factors that may have 
contributed to the strong perform ance of this sector include the gr owth of household consumption 
                                                      
1 The 2011 Annual Investment Plan envisages the start of implementation of eight hydroelectric power 
projects, to reduce dependency on thermoelectric generation. 
2 If the crude oil produced by Perenco and Petrobra s since August and Novemb er 2010, respectively, 
when their production was assigned to Petroamazonas, is  excluded from the calcula tion, then State production 
grew by 1.95 per cent in 2010. 
3 The 9.6 per cent fall in this period mainly reflected the fact that production from the Perenco and 
Petrobras fields was not counted, since these oil fields have been operated by Petroamazonas since August and 
November 2010, respectively.  If the 2009 output of Perenco and Petrobras is excluded from the calculation, private production would have shrunk by 0.61 per cent. 
4 Information obtained from the Central Bank of Ecua dor.  Only includes high -octane gasoline, diesel, 
and liquefied petroleum gas. Ecuador WT/TPR/G/254 
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  (real annual growth of 7.7 per cent), and an expa nsion of over 50 per cent in consumer credit (in 
current value terms). 
 
-4.09%
-6.35%4.17%35.07%
0.73%3.07%
-7.96%0.83%
-2.58% -2.65%
-15%-10%-5%0%5%10%15%20%25%30%35%40%
2001
20022003
2004
200520062007200820092010Chart 2.1
Annual value-added by the oil sector
Source :  Central Bank of Ecuador.Growth rates at 2000 prices
 
 
 
5.90%
3.90%
3.46%3.84%7.04%
5.05%
3.95%8.03%
0.91%4.47%
0%1%2%3%4%5%6%7%8%9%
2001
2002
2003
200420052006200720082009
2010Chart 2.2
Annual value-added by the non-oil sector
Source :  Central Bank of Ecuador.Growth rates at 2000 prices
 
 
 WT/TPR/G/254 Trade Policy Review 
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  0.92%
0.62%0.92%
0.19%0.39%0.87%
-0.6%-0.4%-0.2%0.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%
Manufacturing
Construction
Commerce
Transport and storage
Financial intermediation
Other servicesChart 2.3
Real annual contribution to gros s value-added:  selected sectors
Source :  Central Bank of Ecuador.2007
201020092008US$ million (2000)
 
 
15. Manufacturing industry has grown at an average rate of 5 per cent per year over the last 
ten years.  Although it recorded 6.7 per cent growth  in 2010 (above the decade average), it failed to 
match the 2008 figure of 8.1 per cent.  This recovery  in manufacturing industry helped fuel a vigorous 
expansion of imports of capital goods for industry (12.7 per cent in volume terms) and industrial raw 
materials (23.5 per cent in volume terms).  Th e additional purchase of capital goods will probably 
mainly be reflected in the production figures for 2011. 
16. The 3.58 per cent GDP growth in 2010 was mainly driven by buoyant demand.  Household 
consumption, which expanded by 7.67 per cent in that year, contributed 5.12 per cent to overall 
GDP growth.  Gross fixed capital formation (GFCF) also played a major role in the economy's performance in 2010, contributing 10.24 per cent;  but  exports performed modestly in real terms 
during this period, making only a minor contribution to GDP growth (2.28 per cent). 
2.2 I
NFLATION AND PRICES  
17. Inflation in December was 0.51 per cent, which meant that the rate for 2010 as a whole came 
in at 3.3 per cent - just below the government's fo recast and the lowest for three years.  Monthly 
inflation was strongly affected by the food and n on-alcoholic beverages sector, which accounted for 
54.45 per cent of the rise in prices in December.  The divisions displaying the greatest year-on-year 
variation in December that year were alcoholic beve rages, tobacco and narcotic  drugs (6.31 per cent);  
food and non-alcoholic beverages (5.40 per cent);  clothing and footwear (4.60 per cent);  and 
restaurants and hotels (4.56 per cent). 
18. The producer price index (PPI) rose by 6.67 per cent between December 2009 and 2010.  
Variations in this indicator normally trend above th e consumer price index.  In annual terms, the Ecuador WT/TPR/G/254 
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  goods segments with the greatest annual variation were  minerals, electricity, gas and water (23.22 per 
cent) and food products, beverages and tobacco, te xtiles, clothing, and leather products (9.92 per 
cent). 
2.3 F ISCAL SECTOR  
2.3.1 Central government budget 19. According to Article 292 of the Political Constitu tion of the Republic of Ecuador, the General 
State Budget includes all public-sector incomes and outgoings, except for those pertaining to social 
security, public banks, public enterprises, and d ecentralized autonomous governments.  The income 
and expenditure of the account created to fina nce the purchase of deficit petroleum products ( cuenta 
de financiamiento de derivados deficitarios  (CFDD)) is also not included. 
2.3.2 Income received 
20. Income received through the General Stat e Budget between January and December 2010 
amounted to US$14,938.25 million - US$3,355.32 milli on more than during the same period in 2009 
(US$11,582.93 million). 
Table 2.1 
Income received by central government 
(US$ million) 
Description 2009 
Total 2010 
Total January-December 
Difference 
(US$) Difference 
(%) 
Income 11,582.9 14,938.2 3,355.3 28.97 
Oil income 2,298.2 4,410.2 2,112.0 91.90 
Non-oil income 9,284.7 10,528.0 1,243.3 13.39 
Tax revenue 7,256.7 8,653.7 1,397.0 19.25 
Income tax 2,517.5 2,353.1 (164.4) -6.53 
VAT 3,018.5 3,746.1 727.6 24.10 
ICE (special consumption tax) 448.1 530.2 82.1 18.32 
Tariffs 923.4 1,152.4 229.0 24.80 
Other taxes (ISD/used vehicle ownership transfer) 230.4 427.7 197.3 85.62 
Non-tax income 752.4 1,511.6 759.2 100.90 
Transfers 1,275.6 362.7 (921.9) -71.57 
Source : Ministry of Finance (prepared by the Ministry of Finance). 
21. Income received in 2010 was up by 28.97 per cen t on the 2009 figure, thanks mainly to an 
increase in tax revenue on the order of US$1, 397 million, and oil income amounting to 
US$2,112 million, compared to the previous year's levels. 
22. The growth of tax revenues mainly reflects VAT which grew by 24.1 per cent, and tariffs 
which increased by 24.8 per cen t, with respect to January-December in the previous year. 
23. In contrast, revenue from income tax and tr ansfers decreased by 6.53 per cent and 71.6 per 
cent, respectively. WT/TPR/G/254 Trade Policy Review 
Page 10 
  
  Composition of income 
24. There were significant changes in the compositi on of income received by the General State 
Budget in the period analysed: 
Charts 2.4 and 2.5
Income January-December 2010
Transfers
2%
Oil income
30%
Tax revenue
58%Non-tax  income
10%Income January-December 2009
Transfers
11%
Oil income
20%
Tax revenue
63%Non-tax income
6%
Source :  Ministry of Finance (prepare d by the Ministry of Finance). 
 
25. Although tax revenue maintained the largest shar e of the total (58 per cent) between January 
and December 2010, its relative share was smaller than  in the same period in the previous year, when 
it accounted for 63 per cent, while oil income repre sented 30 per cent of the total, compared to the 
previous year's 20 per cent. 
26. The share of non-tax income grew from 6 per cent of total fiscal income in 
January-December 2009 to 10 per cent in the same period in 2010. 
27. Transfer income slumped from 11 per cent in 2009 to 2 per cent in 2010. 
Tax revenue 
28. Net revenue collected by the Internal Revenue Service (SRI) in 2010 amounted to 
US$7,864 million, representing nominal growth of 17.4 per cent compared to the same period in 2009 (US$6,693 million).  The amount collected  represented 103.9 per cent of the proportional 
target set for the period, representing an additional contribution of US$294 million. 
29. Considering all taxes (i.e. SRI revenue plus tari ffs), direct taxes accounted for 43 per cent of 
total revenue received in the period January-Decemb er 2010, one percentage point more than in the 
previous year.  Indirect taxes accounted for 56 per cent of total income received, 1 percentage point 
down on the previous year's figure. Ecuador WT/TPR/G/254 
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  Table 2.2 
Tax revenue, January-December 2009-2010  
(US$ million) 
 US$ million (%) 
2009 2010 Growth rate 
Reprogrammed 
target Revenue 2010 vs 2009 2010 vs target 
a b c c vs a c vs b 
VAT 3,431 4,157 4,175 21.7 0.4 
Income tax 2,552 2,478 2,428 -4.9 -2.0 
ICE 448 508 530 18.2 4.2 
Exceptional income tax   231 561  142.7 
Motor vehicles 118 188 156 31.8 -17.1 
Outflow of  foreign 
exchange 188 338 371 97.2 9.8 
Assets abroad 30 35 35 16.4 1.6 
Simplified tax system 
(RISE) 4 6 6 56.6 4.1 
Source : Internal Revenue Service. 
30. Value added tax (VAT) was the non-financial public sector's largest permanent income 
source.  The US$4,175 million in revenue collected  between January and December, reflects the 
following factors, among others:  (i) the country's economic activity;  (ii) variation in consumer 
prices;  (iii) administrative management of the SRI;   and (iv) reform of the Organic Law of Public 
Enterprises, regarding reimbursement of the 12 per cent tariff on purchases of goods and services by 
public institutions, including public  enterprises, which has affected  VAT collection and repayment 
since this reform entered into force in December 2009.   In addition, it also reflects the expiry in 2010 
of the temporary safeguard measure applied in 20 09 to protect the country's balance of payments 
position. 
31. Although income tax was the country's second-la rgest revenue earner (US$2,428 million), in 
the period under analysis it contracted by 4.9 pe r cent compared to January-December 2009.  This 
trend reflects the reforms made to this tax as part  of a broader tax reform, which affected revenue 
from:  (i) tax returns, basically legal entities (0.4 per cent of GDP), and to a lesser extent tax returns 
by private individuals;  and (ii) advances, whic h shrank by about 0.1 percentage points of GDP. 
2.3.3 Accrued expenditure 
32. Accrued expenditure in the General State Budget, up to December 2010, amounted to 
US$16,200.10 million, which was US$1,982.10 milli on more than in the same period in 2009 
(US$14,218 million). 
33. The larger outgoing represented capital expenditu re of US$6,431.67 million - up by 21.7 per 
cent on the 2009 figure (US$5,283.89 million). 
34. Current expenditure in the form of wages a nd salaries (US$6,017.17 million) grew by 28 per 
cent in relation to the same peri od in 2009 (US$4,707.83 million). WT/TPR/G/254 Trade Policy Review 
Page 12 
  
  Table 2.3 
Accrued central government expenditure  
(US$ million) 
Description 2009 
Total 2010 
Total January-December 
Difference 
US$ Difference 
(%) 
Total expenditure 14,218.00 16,200.00 1,982.10 13.94 
Current expenditure 8,934.07 9,768.43 834.36 9.34 
Wages and salaries 4,707.83 6,017.17 1,309.34 27.81 
Goods and services 824.00 1,094.57 270.57 32.84 
Interest* 474.11 529.79 55.68 11.74 
Current transfers 1,962.11 1,284.30 (677.81) -34.54 
Other current expenses 966.01 842.60 (123.41) -12.78 
Capital expenditure 5,283.89 6,431.67 1,147.78 21.72 
Source : Ministry of Finance (prepared by MF/SCM). 
35. Current transfers retreated sharply, falling 34.5  per cent, from US$1,962.1 million in 2009 to 
US$1,284.3 million in 2010. 
Composition of expenditure 
36. The structure of expenditure is similar in the two years analysed, although certain differences 
can be discerned. 
Charts 2.6 and 2.7
Expenditure January-December 2010
Goods and services
6%Wages and salaries
33%
Interest*
3%Capital expenditure
37%Expenditure January-December 2009
Current transfers 
8%Wages and salaries
37%
Other current expenses
5%Capital expenditure
40%
Current transfers
14%Goods and services
7%Interest*
3%Other current expenses
7%
Source :  Ministry of Finance (prepared by the MF/SCM). 
 
37. Investment expenditure grew in the period January-December 2010, increasing its share by 
three percentage points from 37 per cent in 2009 to 40  per cent in 2010.  On the other hand, the share 
of current transfers declined sharply by six percen tage points from 14 per cent in 2009 to 8 per cent in 
2010.  In the period analysed, the share of goods an d services grew slightly, to account for 7 per cent 
of total expenditure in January-D ecember 2010.  The share of payroll expenses grew from 33 per cent 
in 2009 to 37 per cent in 2010. Ecuador WT/TPR/G/254 
 Page 13 
 
 
  2.3.4 Central government balance 
38. At the end of 2010, the overall financial positi on displayed a deficit of US$1,261.86 million, 
considerably smaller than the US$2,63 5 million shortfall recorded in 2009. 
39. In relation to GDP, the overall deficit sh rank from 5.1 per cent in 2009 to 2.2 per cent 
in 2010. 
Table 2.4 
Central government balance  
(US$ million) 
Description 2009 
Total 2010 
Total January-December 
Difference 
US$ Difference 
(%) 
Total income 11,582.90 14,938.25 3,355.35 28.97 
Total expenditure 14,218.00 16,200.10 13,933.44 13.94 
Overall balance (2,635.00) (1,261.86) 1,373.14 -52.11 
 % of GDP -5.10% -2.21%   
Primary balance (2,160.90) (732.07)  1,428.83 -66.12 
 % of GDP -4.20% -1.28%   
Source : Ministry of Finance (prepared by MF/SCM). 
40. The primary balance displayed a deficit of US$732.1 million, down by 66.1 per cent on the 
US$2,160.9 million deficit recorded in 2009.  The primary balance represented 1.3 per cent of GDP 
in 2010. 
41. The improved fiscal outturn reflects a signi ficant increase in income (28.97 per cent) 
combined with a moderate increase in expenditure (13.94 per cent). 
2.4 P UBLIC DEBT 
2.4.1 Domestic public debt 
42. With respect to domestic public debt, Table 4 shows a 2.35 per cent reduction in the balance 
of US$4,665.1 million outstanding on 31 December 2010 (8.2 per cent of GDP in 2010) and the 
US$4,555.2 million outstanding on 28 February 2011 (7.3 per cent of GDP of 2011).  This mainly 
reflected the payment of US$96.3 million to c onsolidate the government's debt with the 
Ecuadorian Social Security Institute, together with  payments and disburseme nts by Banco del Estado 
amounting to US$4.49 million and US$0.18 million respectively in the stock of debt placed with 
government entities at 28 February 2011. 
43. Amortization payments on the domestic pub lic debt increased by 515.15 per cent from 
US$17.89 million in February 2010 to US$110.03 m illion in February 2011, owing mainly to the 
payment of the consolidated debt with the Social Security Institute in January 2011. 
44. In contrast, total domestic debt disbursement s fell from US$1.17 million in February 2010 to 
US$0.19 million in February 2011, the difference being due to an increase in disbursements by 
Banco del Estado. WT/TPR/G/254 Trade Policy Review 
Page 14 
  
  2.4.2 External public debt 
45. The outstanding balance of external public debt grew by 17.79 per cent, from 
US$8,671.72 million on 31 December  2010 (15.2 per cent of 2010 GDP), to US$8,760.47 million in 
February 2011 (14.1 per cent of 2011 GDP) (see Table 2.5). 
46. This increase reflected the 4.47 per cent upturn in external debt owed to governments (in 
February 2011) and a 0.11 per cent increase in bank debts and bonds5, although there were reductions 
of 0.21 per cent in debt contracted with internati onal organizations, and 5.36 per cent with "suppliers" 
in February 2011 compared to December 2010. 
Table 2.5 
Outstanding external public debt 
(Balances at December 2010 and February 2011;  US$ million) 
Category 31/12/2010 28/02/2011 
Total external debt 8,671.72 8,760.47 
International organizations 5,257.99 5,247.15 
Governments 2,258.47 2,359.46 
of which Paris Club 632.20 637.47 
Banks and bonds 1,107.42 1,108.59 
of which Global Bonds 918.03 925.51 
Suppliers 47.84 45.27 
External debt/GDP 15.21% 14.12% 
Source : Debt bulletins published by the Under-Secretariat for Public Credit (prepared by the Ministry of Finance). 
47. Between February 2010 and Fe bruary 2011, amortizations increased by 87.8 per cent, from 
US$48 million to US$90.1 million, mainly owing to  increases of 230.19 per cent in payments to 
international organizations and 17.94 per cent in payments to banks between these two dates. 
48. Actual disbursements of external debt in  February 2010 amounted to US$7.8 million, 
compared to US$110.65 million in February 2011, as a result of a significant increase in government 
disbursements from US$1.82 million in February  2010 to US$110 million in February 2011. 
2.5 P OVERTY AND INEQUALITY  
49. The trend of income poverty over the last five y ears has been positive;  the figures show that 
this did not increase in the period 2006-2010 desp ite the international crisis.  Income poverty 
nationwide declined from 37.6 per cent in 2006 to 32.8 per cent in 2010.  Over the same period, 
income poverty in urban areas fell from 25.9 per cent to 22.5 per cent;  while rural poverty declined 
from 60.6 per cent to 53 per cent (Chart 2.8).  Possib le explanations of these results include wage 
increases, such as the "decent wage" ( salario digno );  the reduction of extreme poverty resulting from 
government support such as the "Joaquín Gallegos Lara" programme6;  and the human development 
credit programme, which benefited 700,000 Ecuadorians who were previously excluded and are now 
owners of their own businesses. 
                                                      
5 In the case of global bonds, alt hough there was no disbursement, th e balance increased as a result of 
arrears in debt payments due in January and February 2011. 
6 A programme sponsored by the Office of the Vice-President of the Republic, benefiting persons with 
physical or intellectual disabilities.  Persons in this categ ory receive an official gran t, entitled "Joaquín Gallegos 
Lara", of US$240, which is paid to parents or relatives  of persons with severe disabilities living in extreme 
poverty.  Source:  www.ecuadorinmediato.com. Ecuador WT/TPR/G/254 
 Page 15 
 
 
  Dec. 06 Dec. 07 Jun. 08 Dec. 08 Dec. 08 Jun. 10 Dec.10
National 37.6% 36.7% 35.0% 35.1% 36.0% 33.0% 32.8%
Urban 25.9% 24.3% 23.3% 22.6% 25.0% 22.9% 22.5%
Rural 60.6% 61.3% 58.0% 59.7% 57.5% 52.9% 53.0%0%10%20%30%40%50%60%70%
Source :  ENEMDU (prepared by SENPLADES).Chart 2.8
Trend of poverty in Ecuador
Per cent
 
 
50. Urban poverty decreased substantially in the period June 2007 to June 2011, from 22.91 per 
cent to 19.24 per cent (Chart 2.9). 
51. Moreover, the poverty severity gap, or intensity of poverty, is also decreasing, which means 
that the poor are becoming increasingly less poor, as shown in Chart 2.10.  The gap between the wealthiest and the poorest segments of the population has also narrowed, with the Gini coefficient 
falling from 0.52 in June 2007 to 0.47  in June 2011 (Chart 2.11).  These figures reflect the recovery of 
public services, through the provisi on of goods and services to the mo st vulnerable population groups, 
e.g. quality education and health services.  The fi gures are also the result of the implementation of 
best practices on income redistribution in the Ecuadorian population. 
 WT/TPR/G/254 Trade Policy Review 
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  22.43%23.29%
21.82%22.91%
19.24%
June 07 June 08 June 09 June 10 June 11Chart 2.9
Incidence of urban poverty
Source : INEC - ENEMDU at June 2011 (prepared by SENPLADES).
 
 
0.079 0.078
0.0730.081
0.061
0.0410.0380.0350.041
0.029
June 07 June 08 June 09 June 10 June 11Chart 2.10
Poverty gap and severity of poverty
Gap Severity
Source : INEC - ENEMDU at June 2011 (prepared by SENPLADES). 
 Ecuador WT/TPR/G/254 
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  0.52
0.49
0.480.49
0.47
June 07 June 08 June 09 June 10 June 11Chart 2.11
Gini coefficient as a measure of poverty
Source : INEC - ENEMDU at June 2011 (prepared by SENPLADES).  
 
52. Lastly, unemployment among the most vulne rable population groups has decreased, with 
joblessness among the urban poor falling faster than am ong the wealthier groups:  1.9 per cent in the 
quintile representing the poorest 20 per cent of the population compared to 0.27 per cent in the 
quintile representing the richest 20 per cent nationwide (Chart 2.12).  One of the key explanations for 
this result is the increase in public investment, and the momentum of the construction sector, which 
has created jobs for the most vulnerable population groups. 
16.9315.9720.1321.78
19.88
2.85 2.924.26
2.6 2.33
June-07 June-08 June-09 June-10 June-11Poorest 20 per cent Richest 20 per cent
Source : INEC - ENEMDU at June 2011 (prepared by SENPLADES).Chart 2.12
Trend of umemployment by total population quintile
Per cent
 WT/TPR/G/254 Trade Policy Review 
Page 18 
  
  3. ECONOMIC POLICY 
3.1 T HE 2008  CONSTITUTION AND THE NATIONAL PLAN FOR GOOD LIVING  
The 2008 Constitution 
53. Since Ecuador's first WTO trade policy review  in 2005, far-reaching changes have occurred 
in the country, including the new Constitution approve d in 2008, which lays the foundations for a new 
endogenous development model and also prior itizes integration among the different peoples, 
particularly the Latin American peoples. 
54. In relation to development, the new model mak es it a State duty to plan national development, 
eradicate poverty, promote sustainable economic grow th and the fair redistribution of resources and 
wealth, in order to allow access to "Good Living" ( Buen Vivir ). 
55. Good Living is a State-guaranteed objective that  recognizes and guarantees the right to food 
sovereignty and the right of the population to live in  a healthy and ecologically balanced environment 
that ensures sustainability and good living ( sumak kawsay ).  It also proclaims the public interest in 
protecting the environment, conserving ecosystems,  biodiversity and the integrity of the country's 
genetic heritage, prevention of e nvironmental damage, and the recovery of degraded natural spaces. 
56. The State also promotes the use of environmentally clean technologies and non-polluting 
low-impact alternative energies, in both the public and the private sector.  Energy sovereignty cannot 
be achieved at the expense of food sovereignty, or  by impairing the right of the entire population to 
water. 
57. In relation to the rights of nature, environmental services are not subject to appropriation;  and 
their production, provision, use, and exploitation are regulated by the State. 
58. Among its competencies, the central government is responsible for directing international 
relations, for formulating economic, tax, customs a nd tariff as well as fiscal and monetary policies, 
and for external trade and debt management. 
59. The Constitution defines the development regime  as the organized, sustainable and dynamic 
group of economic, political, sociocultural and envir onmental systems that guarantee the achievement 
of Good Living. 
60. The economic system specified by the Cons titution is social and solidarity-based;  it 
recognizes the human being as subject and end;  it  promotes a dynamic and balanced relationship 
between society, State and market, in harmony w ith nature;  and it aims to guarantee the production 
and reproduction of the material and non-material  conditions that make Good Living possible. 
61. The State is responsible for providing incentives for national production, systemic 
productivity and competitiveness, the accumulation of scientific and technological knowledge;  
strategic engagement in the world economy, an d complementary productive activities in regional 
integration.  It is also required to ensure food an d energy sovereignty;  promote the incorporation of 
value-added with maximum efficiency, within the bio- physical limits of nature and respect for life and 
cultures;  and to promote the fair and complement ary exchange of goods and services in transparent 
and efficient markets, giving priority to satisfyi ng the needs of persons and society, among others. Ecuador WT/TPR/G/254 
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  62. Ecuador's economic policy aims to effectively fulfil the rights established in the Constitution, 
and to attain the objectives of the developmen t regime and the National Development Plan. 
63. Trade policy aims to develop, strengthen and invigorate domestic markets, in accordance with 
the strategic objective laid down in the National De velopment Plan;  and to regulate, promote and 
implement the actions needed to further the country 's strategic integration into the global economy. 
64. The State prioritizes integration with Latin Amer ican and Caribbean countries.  It also seeks 
to strengthen the national productive apparatus and boost domestic production, and must help ensure 
food and energy sovereignty and reduce internal disparities. 
65. The State is also required to foster the development of economies of scale and fair trade.  It 
must encourage environmentally responsible ex ports, preferably those that generate higher 
employment and value-added, and exports from small and medium producers and the crafts sector in particular. 
66. In relation to imports, the State will promote t hose needed for full exercise and enjoyment of 
the rights established in the Constitution;  and it will discourage those that have an adverse effect on 
national production, the population, and nature. 
67. In principle, the Ecuadorian State cannot be made subject to foreign jurisdiction in disputes 
with private individuals, except for the arbitrat ion procedures pertaining to Latin American 
integration, which are provided for in the Constitution.   Nonetheless, arbitration can be agreed upon in 
the framework of the "investment contracts" gove rned by the Organic Code of Production (COP). 
68. As regards strategic sectors, services and public enterprises, the State can reserve the right to 
manage, regulate, control and administer strategi c sectors, in accordance with the principles of 
environmental sustainability, precaution, prevention and efficiency. 
69. Strategic sectors, subject to exclusive govern ment decision-making and control, are those 
whose transcendence and scale give them a decisi ve economic, social, political or environmental 
influence;  they must be oriented towards full de velopment of rights and social interest.  Strategic 
sectors are defined as energy (all forms), telecommunications, non-renewable natural resources, 
transport and refining of hydrocarbons, biodive rsity and genetic heritage, the electromagnetic 
spectrum, water, and all other sectors determined as such by law ( the PNBV lists others that could be 
added ). 
70. Non-renewable natural resources are an inalie nable and non-transferable part of State 
patrimony.  Water is a strategic national asset of public  use;  it is the inalienable and non-transferable 
property of the State, and constitutes a vital element of nature and the existenc e of human beings.  The 
Constitution prohibits the privatization of water in any form. 
71. The State is required to foster modes of production that ensure Good Living for the 
population, and to discourage those that undermine th e rights of people or nature.  It will encourage 
production that satisfies domestic demand and en sures Ecuador's active participation in the 
international arena. 
72. Intellectual property is recognized in accordance with, and subject to, the law.  The 
Constitution prohibits all forms of appropriation of collective knowledge - science, technology and 
ancestral knowledge.  It also prohibits the approp riation of genetic resources forming part of 
biological diversity and agro-biodiversity. WT/TPR/G/254 Trade Policy Review 
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  73. The Ecuadorian State develops policies to foster national production in all sectors, 
particularly to guarantee food and energy sovereignt y, and to create jobs and value-added.  It also 
oversees and promotes fair trade as a means to obtain quality goods and services, so as to minimize the distortions of intermediation and promote sustainability. 
74. The State will promote both national and fore ign investments, and will establish specific 
regulations for different types of investment, prio ritizing national investment.  Investments will be 
guided by criteria of productive diversification,  technological innovation and the generation of 
regional and sectoral equilibria. 
75. Foreign direct investment (FDI) will be complementary to domestic investment and subject to 
strict respect for the legal framework and nationa l regulations, and the application of human rights 
and the rights of nature;  and it will be guided by  the needs and priorities defined in the National 
Development Plan and in the various devel opment plans of the decentralized autonomous 
governments. 
76. The Organic Code of Production, Trade and Investment (COPCI) defines principles, rights 
and guarantees for foreign investment, such as non- discrimination and the understanding that foreign 
investors have the same rights and obligations as do mestic ones.  It also establishes the right to 
transfer abroad part or all of the profits or retu rns obtained from the investment, subject to compliance 
with the corresponding obligations.  Tax stability is guaranteed by maintaining the income-tax rate in 
force at the time of making a new investment, for a predetermined period (which depends on the case 
in question).  Legal stability is also provided, as we ll as the possibility of signing investment contracts 
giving access to arbitration mechanisms, including inte rnational ones.  It is also possible to sign 
investment contracts that specify the treatment to be given to the investment under the COP. 
77. Property rights are guaranteed by providing that  the investment will not be expropriated or 
nationalized, either directly or indirectly - except wh en this is in the public interest, in which case it 
will be done equitably, and by payment of prompt , adequate, and effective compensation, according 
to legal procedures, observing the principle of fair and non-discriminatory treatment.  Lastly, freedom 
of access to the national financial system and secur ities market is established for the purposes of 
obtaining short, medium and long-term credit to implement investment projects. 
78. Food sovereignty is a strategic objective of Ecuadorian society, which obliges the State to 
promote and facilitate agri-food an d fishery production and processing by small and medium-sized 
enterprises and community and solidarity-based gr assroots production units, destined basically for 
local and domestic consumption by setting up distribu tion and marketing systems.  For that purpose, 
the State must adopt fiscal, tax, and tariff polici es to protect the national agricultural and fisheries 
sector, with a view to reducing reliance on food imports. 
79. The State must also recover and preserve ancest ral knowledge and genetic resources as part of 
the Ecuadorian people's heritage, guarantee rights co ncerning the use and conservation of seeds, and 
promote their free exchange. 
80. In relation to biodiversity, the Constitution d eclares Ecuador free from transgenic crops and 
seeds.  On an exceptional basis, a nd only in the case of national interest duly justified by the Office of 
the President of the Republic and subject to approv al by the National Assembly, genetically modified 
seeds and crops may be introduced. 
81. The Constitution prohibits the granting of right s, including intellectual property rights, on 
derived or synthesized products obtained from colle ctive knowledge relating to national biodiversity. Ecuador WT/TPR/G/254 
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  82. The State also will not make commitments in conventions or coopera tion agreements that 
contain clauses which impinge on the conservation and sustainable management of biodiversity, 
human health, collective rights and the rights of nature. 
83. On the principles of international relations, it prioritizes the political, cultural and economic 
integration of the Andean region, South America a nd Latin America.  It also promotes a new system 
of trade and investment between States, based on ju stice, solidarity, complementarity, the creation of 
mechanisms for the international control of multin ational corporations, and the establishment of an 
international, fair, transparent and equitable financial system.  It rejects the notion that disputes with 
foreign private enterprises should become conflicts between States. 
84. The international treaties ratified by Ecuador w ill be subject to the provisions established in 
the Constitution. 
85. Integration, particularly with Latin American and Caribbean countries, is a strategic objective 
of the Ecuadorian State.  To that end, it must  promote economic, equitable, solidarity-based and 
complementary integration;  productive, financial and monetary unity;  the adoption of a common 
international economic policy;  the promotion of  policies to overcome regional asymmetries;  and 
regional trade, with emphasis on goods of high value-added. 
86. The State must also promote joint strategies fo r the sustainable management of the country's 
natural heritage, particularly the regulation of extractive activities;  sustainable cooperation and 
complementation in the energy field;  conservation of biodiversity, ecosystems and water;  research, scientific development and the exchange of knowle dge and technology;  and the implementation of 
coordinated strategies on food sovereignty. 
87. It also favours the consolidation of supranati onal organizations made up of Latin American 
and Caribbean States, and the signing of intern ational treaties and other instruments on regional 
integration. 
National Plan for Good Living (PNBV) 2009-2013 
Background  
88. In January 2007, Ecuador started to develop the 2007-2010 National Development Plan;  the 
challenge now is to consolidate it.  To that end, the PNBV 2009-2013 poses new challenges aimed at 
materializing and radicalizing the project for change  to construct a plurinational and inter-cultural 
state, and ultimately achieve Good Living ( Buen Vivir )
7 for all Ecuadorian people. 
89. As was the case with the Plan in force dur ing the previous gove rnment period, the 
2009-2013 Plan takes up and aims to bring about changes not only in the public domain but also in the 
productive sphere, which are defined in the Citiz en Revolution project.  These commitments to 
change were also guidelines for the constituent proc ess of 2008, which ultimately formed part of the 
new social covenant reflected in the ne w Constitution of the Republic of Ecuador. 
                                                      
7 The term Buen Vivir  (Good Living) implies the satisfaction of needs, attainment of a quality of life 
and reconstruction of the public domain.  It also entails expanding individual freedoms, capacities, opportunities, and potentials to make it possible to simultaneously achieve what society, local territories, 
collective identities, and each individual - seen as both a un iversal and an individual being - value as a desirable 
life goal (SENPLADES:  10). WT/TPR/G/254 Trade Policy Review 
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  90. The proposals contained in the PNBV 2009- 2013 raise major technical and political 
challenges and involve substantial methodological and instrumental innovations.  Nonetheless, the 
Plan's deeper significance stem s from the conceptual break it ma kes with classical liberalization 
models and more orthodox approaches to the concept of development. 
91. The PNBV accordingly starts from a wide-ranging  search for alternative ways of life that 
have been promoted particularly by social stakehol ders in Latin America over the last few decades, by 
lobbying against the neoliberal economic model.   In the Ecuadorian case, these claims were 
recognized and incorporated into the Constitution, thus becoming the principles and orientations of 
the new social covenant. 
92. The PNBV is therefore a commitment to change that is being construc ted continuously out of 
those claims to strengthen a broader vision, r eaching beyond the narrow quantitative boundaries of 
economic thinking.  It allows for the applicati on of a new economic paradigm whose purpose is not 
concentrated in processes of material, mechanisti c and endless accumulation of goods, but promotes 
an inclusive, sustainable and democratic economic strategy.  In other words, its vision incorporates into the processes of accumulation and redistri bution those sectors of the population that have 
historically been excluded from the market logic,  and forms of production and reproduction that are 
based on principles that depart from that logic.
8 
93. Lastly, the PNBV is also based on calls for e quality and social justice, and the recognition, 
valuation, and dialogue of peoples and th eir cultures, know-how and ways of life. 
94. On the international front specifically, the Plan mentions the need for intelligent and 
sovereign participation in trade.  To establis h a different equilibrium, emphasis is placed on 
South-South integration, without neglecting already consolidated market niches. 
95. For the first phase of its application in 2009-2013,  this new mode defines 12 strategies for 
change, of which those relating to the economic  and commercial domain are described below: 
Strategies 
96. The National Planning and Development S ecretariat (SENPLADES), as the governing 
institution of State planning, is responsible for i ssuing public-policy guidelines in all of the national 
government's spheres of action.  In that regard, the National Deve lopment Plan, now entitled National 
Plan for Good Living 2009-2013 (PNBV), defines th e national objectives aimed at achieving the goal 
of Good Living.  The latter is a proposal for cha nge away from the traditional economic model, which 
seeks to place the human being ahead of economic activity. 
97. In the domains relevant to this report, two of the 12 national objectives established in the 
PNBV should be highlighted: 
- Objective 5:  Guarantee sovereignty and peace, and promote strategic insertion in 
the world as well as Latin American integration.  
- Objective 11:  Establish a solidarity-based and sustainable socio-economic system.  
                                                      
8 Buen Vivir  is also based on calls for a review and reinterpretation of the relation between nature and 
human beings;  in other words a shift from the current anthropocentrism to biopluralism, while human activity 
uses natural resources adapted to their natural gene ration (regeneration) (Guimaraes in Acosta, 2009). Ecuador WT/TPR/G/254 
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  98. To achieve these objectives, SENPLADES promotes productive diversification by identifying 
industries as priorities for changing the production pa ttern (matrix).  Public-policy guidelines are put 
forward to intensify the developm ent and inclusion of these industries.  This change is based on a 
selective import-substitution model, rather than productive development and export orientation. 
99. With regard to strategic participation in  the global arena, SENPLADES promotes a trade 
strategy for the selected industries, for example by  prioritizing trade offices for market and product 
diversification, and promoting a logistics plan for trade facilitation in the selected industries.  These trade offices have a strategic role to play, not only limited to the introduction of products on markets, 
but also by facilitating access to external resour ces for the country's endogenous development.  
Small-scale producers and local community and so lidarity-based economies have been taken into 
account both in the inclusive strengthening of the dom estic market through productive diversification, 
and in strategic integration into the world market .  The strategies put forward by SENPLADES stress 
their inclusion domestically but even more at the international level. 
100. Another of the trade policies pursued by SENPLADES involves signing trade for 
development agreements (TDAs).  Unlike the traditi onal types of agreement, TDAs include long-term 
planning objectives with a new vision on trade and its  links with development.  Without departing 
from the multilateral trading system framework, TD As include cooperation and political dialogue, in 
addition to trade issues, and should form the basis for the trade negotiations undertaken by Ecuador. 
101. Lastly, the aforementioned policies go hand-in-ha nd with a prioritization of public investment 
projects aimed at fulfilling national planning objectiv es, generating domestic conditions that allow for 
strategic engagement in the world economy and Latin  American integration, and provide incentive for 
a sustainable and solidarity-based economic and social system, by promoting sectors that generate value-added, increasing their profitability and st rengthening the country's systemic productivity. 
102. The following strategies have been proposed: 
- Democratization of the means of produc tion, redistribution of wealth, and 
diversification of forms of ownership and organization. 
- Transformation of the economy's pattern of  specialization through selective import 
substitution to foster Good Living. 
- An increase in real productivity and divers ification of exports, exporters, and export 
markets worldwide. 
- Strategic and sovereign integration in th e world and Latin American integration. 
- Connectivity and telecommunications to build the information society. 
- Sustainability, conservation, awareness of  the natural heritage and promotion of 
community tourism. 
103. With these foundations, the Plan sets forth a planning logic based on the major national 
objectives for Good Living that were already propos ed in the 2007-2010 National Development Plan, 
and were updated according to para meters relating to performance on na tional targets, with different 
proposals for public, sectoral and territorial action, a nd in particular the need to meet the challenges 
posed by the new constitutional framework. WT/TPR/G/254 Trade Policy Review 
Page 24 
  
  104. For that purpose, the National Plan for the Development of Good Living ( Plan Nacional de 
Desarrollo del Buen Vivir ) proposes the following economic and trade policies: 
- Promote the production of healthy and cultu rally appropriate food products from the 
basic shopping basket for domestic consumption, avoiding reliance on imports and 
unhealthy nutritional habits. 
- Promote the domestic food industry, by taking steps to revive and innovate in 
producing high-quality, healthy products of high nutritional value, coordinating 
agricultural production with local consumption. 
- Promote, manage and plan the integrated  and sustainable management of water 
resources to guarantee the availability of wa ter in sufficient quantity and quality to 
ensure food and energy sovereignty. 
- Expand national capacity for power-gen eration based on renewable sources. 
- Promote the creation of a new international financial architecture that contributes to 
the objectives of collective production and welfare, with transparent and solidarity-based mechanisms, under principl es of social, gender and environmental 
justice. 
- Attract external saving, in the form of public and private FDI, for long-term 
sustainable projects that respect the rights  of individuals, communities, peoples and 
nationalities, and which transfer technology and create decent jobs. 
- Apply mechanisms for making use of the progress achieved by transferring science 
and technology to the benefit of the country. 
- Align international cooperation with the national objectives for Good Living, 
institutionalizing accountability mechanisms and permanent impact evaluation systems. 
- Promote commercial relations and intern ational cooperation with decentralized 
autonomous governments throughout the world. 
- Define priority spheres of action for international cooperation in Ecuador. 
- Promote TDAs as tools to encourage comple mentarity, solidarity and the reduction of 
asymmetries between countries. 
- Promote the inclusion of social factors in  economic and trade integration agreements. 
- Actively promote triangular and South-South cooperation, encouraging micro, small 
and medium-sized enterprises (MSMEs), and solidarity-based firms. 
- Support regional and subregional integrati on agencies to strengthen the process of 
Andean, South American and Latin American  integration, as well as integration with 
the Caribbean, through convergence mech anisms and processes that deepen 
integration between the different peoples. Ecuador WT/TPR/G/254 
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  - Improve connectivity with Latin  America and the Caribbean. 
- Coordinate, on a convergent basis, the economic, social, cultural, migratory and 
environmental policies of countries that are members of the regional integration schemes in which Ecuador participates. 
- Prioritize joint negotiation as a bloc with  South American countries to achieve 
beneficial agreements by incr easing the region's bargaining power. 
- Promote regional integration through productiv e integration, as a means of achieving 
trade complementarity with the rest of the world. 
- Promote mechanisms that facilitate the fr ee movement of people within the region 
and encourage tourism exchange. 
- Consolidate the region's financial institu tions as an alternative to traditional 
multilateral lending agencies, and promote the use of single regional clearing house 
systems. 
- Specify strategic State guidelines on the marketing of Ecuadorian products abroad. 
- Define and implement mechanisms for the tr ansfer of resources and technology with 
a direct social impact. 
- Make the most of the country's capacities to influence the international agenda and 
bilateral and multilateral policies which, am ong other things, facilitate the exercise of 
rights and guarantee the protection of Ecuadorian citizens living abroad. 
- Diversify Ecuadorian exports to the rest of  the world, prioritizing complementarities 
with the economies of the South, with fair  trade that protects domestic production and 
consumption. 
- Include new participants in foreign trade, pa rticularly micro, small, and medium-sized 
production units and the non-industrial sector , promoting environmentally responsible 
and job-creating initiatives. 
- Set up international export guarantee m echanisms, particularly for MSMEs, 
solidarity-based enterprises and grass-roots organizations, prioritizing those that 
involve women from various population sectors, including priority groups, peoples and nationalities. 
- Defend the nation's commercial interests at  the bilateral and multilateral levels, 
adopting measures to protect domestic production and consumption as necessary. 
- Maintain foreign-trade relations with a fo cus on domestic legal ce rtainty, and prevent 
private interests from affecting relationships between States. 
 - Implement a selective import-substitution scheme that promotes the imports that are 
essential to the objectives of Good Living, particularly production inputs, and 
discourage those that have a negative e ffect on domestic production, population and 
nature. WT/TPR/G/254 Trade Policy Review 
Page 26 
  
   - Institutionally strengthen customs services to  achieve efficiency and transparency and 
facilitate international trade. 
- Position the country, on the strength of its na tural heritage, in the global mechanisms 
to combat climate change. 
- Apply incentives to develop value-added ge nerating activities, particularly in the 
industrial and services sectors. 
- Diversify modes of production, the provision of services and their capacities to add 
value in order to expand domestic and export supply. 
- Promote imports that are essential to the objectives of Good Living, particularly 
production inputs, and discourage those that  have a negative effect on domestic 
production, population and nature. 
- Recognize the diversity of economic actors, and promote their effective participation 
in economic decision-making mechanisms. 
- Promote small and medium-sized productive units for local territorial strengthening 
and complementarity, both nationally and w ithin regional integration frameworks. 
- Maintain and expand the domestic transport system and multimodal mobility so as to 
foster domestic and external trade, as well as national and regional integration. 
- Manage customs services in an efficient and transparent manner to facilitate export 
and import trade. 
- Apply selective tariffs, subsidies and other measures to regulate trade on the basis of 
national interests, while respecting the country's international commitments.  
Implement a tax-and-tariff policy to protect  and promote domestic production, wealth 
redistribution, income and environmental responsibility. 
- Expand domestic protection to cover goods pr oduced by the grass-roots and social 
and solidarity-based economy, against soci al dumping in international trade and 
protectionism by central States. 
- Define norms and standards for products a nd services to guarantee consumers' rights 
and promote domestic production. 
- Generate incentives for environmentally resp onsible export products that create jobs 
and value-added, particularly those or iginating in small and medium-sized 
cooperative production and the crafts sector. 
- Stimulate systemic productivity, with a view to creating favourable production 
conditions in the endogenous  economy for Good Living. 
105. In short, the PNBV 2009-2013 proposes a paradigm  shift in terms of development, which 
goes beyond economic growth, is adapted to our realiti es and offers integrated vision and a retargeting 
of priorities.  The productive model is adapted the needs of the community, and its results are 
measured by its effect on the quality of life of i ndividuals, the satisfaction of their needs, its Ecuador WT/TPR/G/254 
 Page 27 
 
 
  contribution to making the most of human opportun ities and capacities, and its relation with the 
environment. 
3.2 D OLLARIZATION  
106. Since 2000, Ecuador has implemented a dollari zation scheme, which was adopted, as claimed 
at the time by economic policymakers, to halt th e rapid depreciation of the sucre (the national 
currency at that time), and to avert a process that threatened to lead the economy into hyperinflation, 
in one of the worst crises of the country's history.  Dollarization meant replacing the national currency, the sucre, by the United States dollar, which became the means of payment in the economy. 
107. In practice, this substitution had two effects fo r domestic monetary and exchange-rate policy.  
In terms of monetary policy, dollarization meant that the Central Bank of Ecuador renounced the 
capacity to issue its own currency and thus ceased to be able to conduct monetary policy through the 
money supply.  In terms of the foreign-exchange system, dollarization meant the strictest possible commitment to a fixed exchange rate, because it me ant the total replacement of the national currency 
by foreign exchange at an exchange rate that was set once and for all and coul d not be altered.  The 
loss of the ability to issue money also meant an inability to implement exchange-rate policy. 
108. In a dollarized economy, domestic liquidity depe nds exclusively on the balance of external 
accounts.  When an economy has no issuance capac ity, the money supply is the outcome of 
transactions between the domestic economy and the r est of the world.  This makes it much more 
sensitive to its international trade and financial re lations.  Accordingly, liquidity changes in the 
economy will largely depend on the outturn of the bala nce of payments.  External shocks that cause 
sharp and significant changes in fo reign-exchange flows into the country tighten liquidity in the 
economy and almost automatically cause corresponding  adjustments in the real sector, namely 
production, employment and public well-being.  Th e greater vulnerability of the dollarized economy 
has no counterpart in the capacity of economic polic y to affect its performance;  on the contrary, 
economic policymakers have few intervention tools and those that do exist are less effective in 
responding to unforeseen shocks.  Hence it is esse ntial for the Ecuadorian economy to develop the 
external sector and adequately manage its trad e policy, within the multilateral commitments it has 
assumed, but which enable it to protect liquidity an d thus the level of produc tion and well-being of the 
population. 
109. The reality of a dollarized economy also meant a reorganization of the country's internal 
institutional framework, to make it more consistent with the sche me being implemented.  The new 
2008 Constitution restructured the functions of sever al institutions to adapt them to the reality of 
dollarization, but mainly to integrate them in a new institutional framework to promote structural 
change in the Ecuadorian economy.  Thus, the form ulation of monetary, credit, exchange-rate and 
financial policies became an exclusive governme nt prerogative, implemented essentially through the 
Central Bank of Ecuador (BCE) and the institutions  comprising the public banking system.  These 
policies also have explicit objectives, including:  (a ) providing means of payment for the system to 
operate efficiently;  (b) establishing li quidity levels that ensure adequa te margins of financial security;  
(c) directing surplus liquidity towards investment;  and (d) promoting national saving, the financing of 
productive sectors, seeking price stability and mainta ining equilibrium in the balance of payments.  
The latter is critical in a dollarization setting, b ecause adequate management of economic policy and 
the administration of flows is crucial for guaranteei ng the inter-temporal sustainability of the existing 
monetary framework.  Dollarization requires a public po licy to moderate excessive fluctuations in the 
balance of payments, because the money supply and, hence, the level of real activity in the economy 
depend directly on this. WT/TPR/G/254 Trade Policy Review 
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  110. Dollarization has had major consequences for the Ecuadorian economy, particularly by 
eliminating exchange-rate uncertainty, reducing th e inflationary effect of devaluation, and 
strengthening fiscal discipline by making it impossible to finance the fiscal deficit by printing money.  The commitment towards dollarization is extremel y important, and the policies implemented over the 
last few years are aimed at strengthening the scheme and guaranteeing its  permanence through time. 
111. Among the institutional changes that have occu rred in Ecuador, special mention should be 
made of those affecting the functions of the BCE.  To respond to the reality of dollarization, but also 
to allow for coherent management of the ec onomy with the aim of fulfilling the medium and 
long-term objectives of the PNBV and the new Cons titution, several public institutions had to be 
reorganized within a new macroec onomic management logic;  and many of them, including the BCE, 
had their functions and objectives reassigned. 
112. In an economy with its own currency, central banks have the role of maintaining price 
stability through adequate management  of an independent monetary policy.  To fulfil this purpose, 
central banks need autonomy from the government, to  protect them from the pressures that the latter 
might exert to monetize the fiscal deficit, i.e. to finance gaps in the government's accounts by issuing 
money, thus contributing to price instability.  The autonomy of central banks is, within this rationale, 
closely linked to their capacity to issue money.  As noted above, dollarization eliminated the country's capacity to issue its own currency, and will thus  also have eliminated any possibility for the 
Central Bank of Ecuador to finance government  accounts.  In that case, and given the new 
characteristics of the economy, central bank autonomy was no longer necessary, and in fact the 
institution had to be included within the country's new institutional framework. 
113. Accordingly, the BCE's functions were rea ssigned within the new regulatory framework, 
bearing in mind that, although the country was no longe r able to issue its own currency, this did not 
mean that it could do without a central bank altoge ther.  In fact, the Central Bank of Ecuador still 
fulfils important functions such as:  (a) avoidi ng systemic risk under the dollarization scheme, by 
ensuring adequate administration and regulation of the payments system;  (b) managing liquidity in 
the economy by specifying bank reserve requirement s or other control mechanisms;  (c) channelling 
the savings of the various economic sectors through the public banking system into investment in the 
productive sector;  (d) managing freely usable intern ational reserves;  (e) serving as the depositary of 
public funds and the government's financial agent;  (f) undertaking operations such as:  international 
transactions, centralized securities custody services, ma nagement of currency in circulation, electronic 
certification and others;  (g) pr oducing macroeconomic st atistics concerning the main sectors of the 
economy;  and (h) providing technical support and serving as executor of economic policy aligned with the broad objectives of the National Devel opment Plan and the guidelines put forward on the 
basis of the economic policy agenda. 
3.3 F
ISCAL POLICY  
114. The fact that tax policy in Ecuador has not changed significantly over the last five years can 
be seen as negative for the country's external trade.  In fact, over the last four years, policy has tended 
to generate greater liquidity for legal entities, private individuals and wage earners, which has 
increased the consumption capacity of middle and lo wer-income sectors, favouring trade in consumer 
products - both domestically produ ced and imported.  Tax incentiv es for industries in relation to 
newly hired workers, for hiring disabled people, and for better and more productive use of clean 
technology;  and income-tax deductions for trai ning, technical assistance, trade promotion, and 
deductions for private individuals provided in the law governing the domestic tax regime, are good 
examples of that. Ecuador WT/TPR/G/254 
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  115. The basic principle guiding the actions of the tax administration, specified in the Constitution 
of the Republic, is to alter the rela tion between direct and indirect taxes, since the latter are considered 
not to contribute to redistributive justice.  In 2005 this ratio was 32.1 per cent direct taxes to 67.9 per cent indirect taxes;  but by 2010, the balance had shifted to 44 per cent direct and 56 per cent indirect. 
116. Revenue growth of 100.15 per cent be tween 2005 and 2010 (from 3,929 billion to 
7,864 billion was the result of a substantial impr ovement in tax control, assessment and collection 
processes;  as well as decisive corrective actions  in response to tax offences.  The number of 
tax-control visits to commercial premises increased by 800 per cent between 2005 and 2010. 
117. The new taxes have contributed less to overall re venue than the tax benefits granted through 
the latest reforms.  The total effect of the par tial reforms made to the tax structure has reduced 
potential revenue rather than increased it. 
118. Value added tax has remained unchanged at 12 pe r cent, compared to a weighted average of 
over 18 per cent in the rest of Latin America. 
119. The special consumption tax on communications  was abolished;  and this represented a 
greater loss of tax revenue than the total amount co llected through new taxes and reforms - the special 
consumption tax on casino games and luxury vehicles, among others.  Apart from the exceptional 
income tax, created to tax the exceptional pr ofits made by oil companies, which brought in 
US$220 million in its first two years, compared to a universe of over US$8,000 billion, the other taxes 
created - the rural land tax, the tax on foreign exch ange outflows and the tax on assets held abroad - 
have contributed roughly US $62 million in tax revenue. 
120. Facilities have been implemented to enable taxpa yers to file income-tax returns and monthly 
value added tax (VAT) declarations over the Inte rnet.  The transactional annexes have been 
simplified, and electronic invoicing has been implemen ted.  Similarly, income-tax reimbursement has 
been automated, as well as requests for the repa yment of value added tax through the computer 
network, which are dealt with within 72 hours.  Citizens may now use the Internet to claim their 
rights, file complaints and propose improvements to the systems;  and these are handled by a recently 
created Taxpayer Rights Department. 
121. Criteria have been increased in respect of the expenditure deductibility for all types of 
enterprise, including trade promotion expenses for gaining access to international markets;  and 
incentives have been provided to undertake econo mic activities in depressed and special economic 
zones, which are accessible without distincti on to both domestic and foreign legal entities. 
122. With the aim of formalizing broad sectors of the informal economy, the 
Ecuadorian simplified tax system (RISE) was create d as an abbreviated system for declaration and 
payment of direct and indirect taxes by taxpaye rs whose annual income from commercial activities or 
services does not exceed US$60,000 per year.  The fixed monthly tax rates range from US$1.17 to 
US$212.40, depending on the economic activity in question. 
123. The RISE was created through the tax reform in 2007 and came into effect in 2008.  With the 
key aim of combating informality, by 2010 the syst em had 450,205 taxpayers registered, contributing 
US$5,744,900.00 in revenue. 
124. The Organic Code of Production, Trade and In vestment, which has been in force since 
January 2011, has provided incentives for legitim ate economic activities of all kinds, including 
commerce, through a general and gradual three-per centage-point cut in income tax and, for new WT/TPR/G/254 Trade Policy Review 
Page 30 
  
  companies, a five-year income-tax exemption.  As a result of these measures, Ecuador has one of the 
lowest personal and corporate income taxes in the world. 
125. A tax reform proposal is currently under di scussion, with the basi c aim of correcting 
environmental and public health imbalances, to promote more responsible use of fossil fuels, 
non-degradable plastics and non-recyclable packaging.   This proposal envisages sanctions for vehicles 
of higher fuel consumption and pollution levels, together with an incentive for hybrid and 
electric-powered vehicles.  In the case of plastic pa ckaging, the proposal is to tax the producer at a 
rate of two cents for non-returnables that cannot be recycled. 
126. The reform also discourages cigarette consump tion, by increasing the duty on this type of 
product.  It also corrects shortcomings in the co llection of the ICE on both imported and domestically 
produced beverages, using a single calculation para meter, based on the establishment of a general 
specific and ad valorem  tax on special consumptions, per litre of pure alcohol. 
3.4 F INANCIAL POLICY  
127. It is essential for Ecuador to consolidate a stable  and strong financial system in the long term, 
based on appropriate indicators of liquidity, solv ency and asset quality, while avoiding oligopolistic 
practices.  For that purpose, the government policy guidelines aim to underpin the financial security 
network, improve systemic risk prevention and de al with any future bankruptcies at the lowest 
possible social cost.  In that regard, the government  is working actively to strengthen supervision and 
control of the financial system, which will make it possible to deal with the liquidity and solvency 
problems of financial institutions on a timely and e fficient basis, and increase the level of trust among 
depositors. 
128. Although the financial system recovered from th e 1999-2000 crisis, in the ensuing years, its 
structure still lacked depth (limited access), and it provided little financing for the productive sector.  
Against this backdrop, from 2007 onward, the governme nt of President Rafael Correa introduced the 
Law Creating the Financial Security Network, which was finally promulgated in 2008.  This 
legislation forms the first pillar of the new financial architecture that above all pursues 
financial-system stability and solidity through eff ective actions by the Ecuadorian government, and 
should also ensure that the financial sector serves the productive sector. 
129. The Ecuadorian financial sector has been stre ngthened since 2006, following the enactment of 
the Financial Justice Law, which lowered the fees  charged by financial entities, with a view to 
stimulating financial intermediati on.  In 2007-2011, regulations were  progressively issued setting the 
interest rate for each segment;  the tax on foreign exchange outflows;  the rule regulating the domestic 
liquidity coefficient;  and most importantly, the La w Creating the Financial Security Network.  Lower 
interest rates made it possible for a larger share of the profits generated in the real sector of the economy to remain in the productive sector and not be concentrated in financial entities, owing to the 
very high cost of money.  This was particularly  favourable for micro and small enterprises, and for 
individual agents who faced lower rates of inter est on production, housing or consumption loans. 
130. In addition, measures such as the domestic li quidity coefficient and the tax on foreign 
exchange outflows have led financial entities to keep  a larger proportion of funds within the country, 
consistent with the needs of the dollarizati on scheme.  As noted above, domestic liquidity 
management is essential for a dollarized economy;  and, through specific financial policy measures, 
this liquidity has been consistently manage d in accordance with the economy's real needs. Ecuador WT/TPR/G/254 
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  131. The Financial Security Network of 20119 was conceived as a set of institutions and rules to 
protect the stability of the financial system and limit systemic crises in the financial sector at the least 
possible cost to society.  To achie ve the law's objectives, four fields  of action were developed within 
the financial system: 
(a) Preventive and timely bank supervision by the Banks and Insurance Supervisory 
Authority, which led to the strengthening of this entity's functions and capacities, 
improvements in monitoring and control of the resources managed by banks, 
promotion of transparency in financial system information, the development of initiatives to improve the provision of fina ncial services, and expanded access for the 
population to financial services. 
(b) Reformulation of the Liquid ity Fund to provide li quidity to the system as necessary.  
This is managed by the BCE and uses c ontributions from financial institutions 
covered by the reserve requirement. 
(c) Promotion of an increase in the amount guaranteed by deposit insurance, managed 
through COSEDE (Deposit Insurance Cor poration, formerly Deposit Guarantee 
Agency). 
(d) Establishment of a new bank resolution schem e, which is more effective and flexible, 
allowing for an orderly exit of institutions that are not viable for any reason.  Banks that are declared in liquidation b ecause they are unviable, are passed for 
administration to another solvent bank, thereby ensuring that the risk for depositors is 
covered. 
132. This new structuring of the financial sy stem enabled Ecuador to successfully adopt 
counter-cyclical policies during the latest global financ ial crisis in 2009.  In the crisis setting, the 
national government preserved the liquidity of the economy by intervening actively in the balance of payments;  generating complement ary domestic liquidity instruments;  and encouraging greater 
lending.  The 2009 crisis reduced the demand for cr edit while at the same time inducing greater 
caution among financial entities;  nonetheless, the key difference was a financial policy that focused 
on providing State banks with the resources needed to  cope with the situation, favouring micro and 
small enterprises through credit lines. 
133. On a complementary basis, the government plan  to strengthen the financial sector aims to 
convert popular financial initiatives (savings a nd loan cooperatives (COACs)), savings banks and 
communal banks) into effective agents for developm ent, while expanding their participation in the 
financial market.  Under the PNBV , financial activity is recognized  as a public service function, 
which should promote the democratization of capital and the channelling of saving towards 
productive activities, particularly those related to MSMEs, which have generally been excluded from 
the system.  For that reason, the Law on the Popular and Solidarity-Based Economy was enacted
10, 
which aims to regulate activities in this part of th e economy, and provide the system with risk control 
mechanisms enabling it to finance undertakings of th is type.  The aim is to promote popular finance 
and economic and social projects.  Currently, COAC s may operate in the national payments system, 
and they have facilitated broader remittance distribution channels, payment of the human 
                                                      
9 Official Register , Supplement No. 498 of 31 December 2008.  Latest amendment:  10 May 2011. 
10 Organic Law on the Popular and Solidarity-Based  Economy and the Popular and Solidarity-Based 
Financial Sector.  Official Register  No. 444, Tuesday 10 May 2011. WT/TPR/G/254 Trade Policy Review 
Page 32 
  
  development bond, and payments in relation to public sector payrolls  and suppliers, and also public 
utilities and taxes. 
3.5 L ABOUR MARKET POLICY  
134. To improve the quality of life of the Ecuadoria n people and assure public- and private-sector 
workers full respect for their dignit y, a decent life, fair pay and rem uneration, and a healthy and freely 
chosen job, the Ecuadorian government, through th e Ministry of Labour Relations (MRL), which is 
responsible for employment policies nationwide,  has implemented and executed the following 
policies, through regulations, deve lopment projects and programmes: 
- Achieve a decent wage and fair pay for work ers, taking account of sectoral specifics, 
by setting and reviewing the basic wage, w ith the aim of progressively attaining a 
decent wage and upholding the constitutional principle of "e qual pay for equal work".  
Rationalizing the number, structure and functioning of the sectoral commissions and promoting union integration by labour market segment. 
- Combat bad business practices in the labour market and social security sphere, and 
protecting safety and health in the workplace;  by automating legal processes and 
procedures that employers have to fulfil, in formation transparency (online declaration 
of the 13
th and 14th months and profit-share entitlement s);  implementation of controls 
to encourage real and timely payment of profit-share entitlements;  and preparation of joint procedural manuals between the S upervisory Authority for Enterprises, the 
Internal Revenue Service (SRI) and the MRL,  in order to streamline the handling of 
workers' demands, as the case may be. 
- Safeguard the rights of workers, implem enting controls and policies to penalize 
non-fulfilment of workers' affiliation to th e Ecuadorian Social Security Institute 
(IESS), and also to combat fraudulent practic es in the payment of contributions and 
remunerations to affiliated workers.  This  has resulted in an improvement in job 
quality and an increase in the number of workers affiliated to the IESS. 
- Strengthen social dialogue, promote tripar tite dialogue in decision-making, giving 
stakeholders (workers, employers and the government) active and inclusive 
participation. 
- Promote, in the employment sphere, fulfilment of the rights enshrined in the PNBV, 
particularly for priority groups, and generate job opportunities, without any 
discrimination, promoting control mechanisms to ensure the right to work, freedom of 
job choice, fair and satisfactory working conditions, unemployment protection without distinction on ethnic, sex, socio-economic, migratory, health, disability grounds, etc. 
- Help eradicate unemployment and inte nsify measures to eliminate labour 
exploitation;  create and strengthen the public  system and structure to facilitate access 
to employment (employment centres and exchanges);  provide vocational training for priority groups through the Ecuadorian O ccupational Training Service (SECAP), 
thereby helping to generate sectoral empl oyment, the creation and development of 
SMEs and the crafts sector. Ecuador WT/TPR/G/254 
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  - Strengthen the legal and ins titutional framework for labour relations by restructuring 
the Ministry of Labour Relations and its attached institutions, thereby optimizing 
human talent, organizational structure, in frastructure and procedural structures, 
implementing technological tools to fac ilitate processes through automation and 
systemization, encouraging deconcentration. 
- Promote knowledge of current labour regul ations among workers and employers, to 
foster a more thorough understanding of the labour rights and obligations of the 
parties, and correct application of the provisions of the Labour Code based on the 
dynamic of current labour relations. 
- Eradicate child labour in conjun ction with public-sector entities and 
non-governmental organizations, by deve loping national programmes and campaigns. 
- Adapt the legal framework for employment to the country's needs (Labour Code, 
Organic Law on Public Service, Social S ecurity Law), in coordination with other 
institutions, to generate participatory di alogue that facilitates issues such as the 
formulation, reception and analysis of suggestions, observations and proposals by 
workers and employers, adapting contractual modalities to the realities and needs of 
workers and employers, within the framewo rk of the Constitution and current laws. 
135. These policies have resulted in a substantia l improvement the employment conditions of 
Ecuadorian people in terms of job quality, and have  upheld their rights in te rms of preventing labour 
exploitation, and promoting pay improvements through annual reviews of the basic wage with a view 
to progressively attaining a decent wage;  control of the payment of the basic wage;  and affiliation to 
social security for domestic service workers.  A ccording to data from the National Institute of 
Statistics and Censuses of Ecuador (INEC) and th e BCE, in June 2011, 46.5 per cent of persons 
employed full-time were not affiliated to the IESS.  In 2011 the proportion had fallen to 40.7 per cent. 
4. EXTERNAL SECTOR 
4.1 T RADE POLICY  
4.1.1 New trade policy approach  
Organic Code of Productio n, Trade and Investments  
136. The Organic Code of Production, Trade a nd Investment was published on 29 December 2010 
in the Official Register  of Ecuador.  Apart from the Agenda for Productive Transformation, the Code 
develops a new conceptual and institutional strate gy for the country, which is the outcome of a 
wide-ranging domestic consensus agreed among productive sectors of different types and sizes, 
together with academia, local governments and development agencies, among others. 
137. The Agenda for Productive Transformati on defines 14 productive sectors as national 
government priorities, because they have a major ef fect on employment levels, generate value-added, 
and deconcentrate productive activities geographically. 
138. The Agenda was formed on a participatory basis,  with entrepreneurs, micro-entrepreneurs and 
small-scale producers putting forward their needs in  relation to the various development initiatives 
being implemented by the national government. WT/TPR/G/254 Trade Policy Review 
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  139. Thus the Ecuadorian people and the national gove rnment are working together to implement 
this Agenda, which is consolidated through the cr eation of the Organic Code of Production, covering 
topics relating to productive development, the development of productive  investment and its 
instruments, external trade, systemic competitiveness , and the sustainability of production, all within a 
framework of respect for the environment and strengthening of Ecuadorian industry and MSMEs. 
140. In the investment sphere, the Code stimulat es national and foreign investment to change 
productive structures and redistribute returns fairly among the community. 
141. Joint work between the government, private sector and labour sector is expected to stimulate:  
domestic and foreign productive investment;  th e production of MSMEs;  the production of sectors 
that have been recognized as priorities;  production in special economic development 
zones (ZEDES)11;  and production with respect for nature. 
142. The Production Code governs productive devel opment and competition mechanisms and 
entities;  the development of productive investment and its instruments with special emphasis on productive development of the popular, solidar ity-based and community economy;  business 
development of MSMEs and the democratization of production;  foreign trade and its control bodies 
and instruments;  systemic competitiveness and customs facilitation for which a new institutional 
framework is also created;  and,  lastly, the sustainability of production and its relation to the 
ecosystem. 
143. The Code also entailed an extensive and detaile d legal exercise to reform current laws and 
repeal others to provide consis tency between the different subject s and the organic nature of its 
content.  In that regard, laws had to be am ended such as the General Law on Financial System 
Institutions;  the Organic Law of the Internal Ta x Regime;  the Reform Law for Tax Equity in 
Ecuador;  the Law on the Electricity Sector Regime;  the Labour Code;  the Social Security Law;  the Investment and Citizen Participation Promotion La w;  the Law on the Development of the Port of 
Manta;  the Law on the Ecuadorian Quality Contro l System, and lastly the Law to Promote and 
Control the Production and Marketing of Banan as, Plantains (Barraganete), and related 
Musaceas plants, for export. 
144. The Production Code also repealed 14 laws;  a nd work is currently ongoing on the Code's 
implementing regulations, which form an integral  and, above all, complementary part of it. 
4.1.2 Foreign trade agenda 
4.1.2.1 Multilateral sphere 
145. Ecuador has been a member of the World Trade Organization since 21 January 1996.  It has 
not signed any of the plurilateral agreements, wh ich are voluntary, such as the WTO Agreement on 
Information Technology and the WTO Ag reement on Government Procurement. 
146. Ecuador has not been a respondent in any dispute brought before the WTO Dispute 
Settlement Body;  but it was a complainant in th e long-running case relating to the European Union's 
discriminatory banana import regime, and agai nst an anti-dumping measure imposed by the 
United States on shrimp imports.  It has also participated as a third party in several legal cases. 
                                                      
11 A special economic development zone is a defined area within national territory where new domestic 
or foreign investments can be located, under tax and tari ff incentives.  There are th ree types:  promotion of 
entrepreneurship and technological development;  industrial diversification;  and logistical services. Ecuador WT/TPR/G/254 
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  147. As part of the process for the accession of new Members to the WTO, Ecuador has signed 
bilateral market access protocols with China, the Russian Federation, the Kingdom of Saudi Arabia, 
Ukraine, Kazakhstan and Serbia;  a nd it is holding bilateral negotiations  with other countries, such as 
Algeria, Belarus, Bosnia-Herzegovina, Lebanon, Syri a, Libya, the Bahamas, Yemen, Montenegro and 
Uzbekistan.  These bilateral negotiations in the multilateral framework have opened up new markets 
for traditional and potential export products, such as flowers, bana nas, seafood products, pineapples, 
mango, cocoa, palm hearts, juice concentrates, cau liflower, broccoli, wood, clothing, and services, 
and others.  Such goods will enter with very low bound tariffs once th e countries in question complete 
the WTO accession process. 
148. Ecuador has made regular notifications, pursuant to  transparency requirements, in the areas of 
agriculture, sanitary and phytosanitary measures, a nd technical barriers to trade.  It is currently 
working hard to update overdue notifications, wh ile guaranteeing the continuity of notifications. 
149. In the external trade policy guidelines contained in the 2008 Constitution, international law is 
recognized as the standard of conduct;  the "dem ocratization" of interna tional organizations is 
promoted, along with equitable participation by deve loping countries in them , based on the principles 
of transparency and inclusiveness, effective implem entation of special and differential treatment, and 
safeguarding the public policy space in the commitmen ts adopted.  In this regard, Ecuador has done 
its utmost to ensure that the WTO Doha Devel opment Round is brought to conclusion.  This 
negotiating round began in November  2001 and is still ongoing.  Ecuador  thus assigns a leading role 
to multilateralism in its trading relations, since it c onsiders this the most appropriate forum for the 
developing countries, in various coalitions, to prom ote the adoption of trade rules and disciplines 
aimed at eliminating existing distortions in international trade. 
Doha Development Round Negotiations in  the World Trade Organization (WTO) 
150. Ecuador is a developing country that accounts for just 0.098 per cent of world trade in 
non-agricultural goods, and 0.326 per cent of trade in  agricultural products.  In acceding to the WTO 
in 1996, it agreed to apply low levels of ta riff binding, to make wide-ranging commitments on 
services, and to overhaul its rules governing intellectual property. 
151. Ecuador belongs to the Group of Recently Acceded Members (RAMs), having assumed 
ambitious commitments in its WTO accession pro cess in 1996, compared to those assumed by 
countries that were members of the former GA TT.  It also participates in the Group of 
Small Vulnerable Economies, given its percentage share of world trade. 
152. Ecuador considers that the negotiating modalitie s on agriculture and non-agricultural market 
access (NAMA), presented in December 2008 and ratifi ed in April 2011, form the basis for progress 
in these negotiations with a view to bringing th e Doha Development Round to the quickest possible 
conclusion. 
153. Ecuador also makes its interests known by par ticipating in the agricultural G-20 negotiations, 
which, for our country, are the key part of the D oha Round.  The outcome of these negotiations should 
determine the level of ambition in the other ne gotiating areas, where the developed countries will 
need to demonstrate a wide-ranging commitment to reduce trade-distorting measures.  As a member 
of the Tropical Products Group, Ecuador has develo ped a strategy with the WTO developed country 
Members with a view to fulfilling the mandate on full est liberalization in such agricultural products in 
accordance with the principle of sp ecial and differential treatment. WT/TPR/G/254 Trade Policy Review 
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  154. Ecuador also led the negotiating process in the WTO to adopt the Geneva Agreement on 
Trade in Bananas, signed in Geneva on 31 May 2 010, between Latin American countries that supply 
bananas to the community market and the European  Union.  This agreement brought 16 years of 
multilateral dispute to a definitive and successful conc lusion, and has enabled the country to lower the 
tariff of €176 to €114 per metric tonne over a period of eight to te n years, under a progressive tariff 
reduction schedule. 
155. Ecuador is negotiating market access commitments  for non-agricultural products (NAMA) in 
terms of tariff reductions;  sectoral approaches;  and the creation of rules that eliminate or reduce 
technical barriers to trade.  It calculates its ta riff cuts on an average basis and not linearly, applying 
the Swiss formula. 
156. With regard to the negotiations on trade and e nvironment, Ecuador is promoting an approach 
based on supply of and demand for environmenta l goods and services, including organic agricultural 
products and those obtained from biodiversity, as well as the elimination of technical barriers to trade.  
In accordance with the principle of special and differential treatment, Ecuador is proposing an 
effective transfer of technology to combat the effects of climate change. 
157. In the intellectual property negotiations, Ec uador attaches special importance to the 
amendment of the TRIPS Agreement, to include the provisions of the Convention on Biological Diversity requiring patent applicants to disclose the source and country of origin of the biological/genetic material and associated traditiona l knowledge used in thei r invention, as well as 
evidence of prior informed consent and benefit sharing requirements 
158. Ecuador is a member of the so-called "Friends  of Fish" coalition, which seeks the elimination 
of fishery subsidies granted by the developed count ries as a decisive factor for conserving fishery 
resources, avoiding overexploitation and overfishing of this resource,  and recognition of special and 
differential treatment for the developing countries, pa rticularly in the most vulnerable sectors such as 
small-scale fishing.  Nonetheless, this cannot represe nt a blank cheque for current subsidy providers 
to be replaced by others. 
159. Since July 2004, Ecuador has participated activ ely in the negotiations conducted by the Group 
on Trade Facilitation on the only topic of the "Singa pore issues" being negotiated in the WTO.  The 
aim of these negotiations is to simplify the proce dures and controls governing the movement of goods 
across national borders.  They also seek to enhan ce technical assistance and capacity building in the 
developing countries. 
160. In the Council for Trade in Services, Ecuador has participated actively in the negotiations on 
domestic regulation, subsidies, safeguards, and speci fic commitments established in the Doha Round.  
As Ecuador took on wide-ranging commitments when it joined the WTO, it is seeking additional flexibilities, particularly in terms of the sectoral and modal coverage of the schedules of specific and 
horizontal commitments, and also to ensure that, in te rms of regulation, there should be no restrictions 
on domestic public policy space. 
4.1.2.2 Bilateral sphere 
161. Since 2006, Ecuador's trade policy has pursued in telligent integration in the global economy, 
defining important lines of action such as market dive rsification;  product diversification;  economic 
complementarity, reduction of asymmetr ies, and endogenous development. Ecuador WT/TPR/G/254 
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  162. The solid relations that Ecuador has maintained  over decades with traditional trading partners, 
such as the United States and the European Union, have provided it with large markets;  but, at the 
same time, it has become somewhat dependent on th em.  As a result, the changes that have taken 
place in the United States economy, for example, have had significant repercussions on the 
Ecuadorian economy.  To provide an alternative to th is situation without neglecting such an important 
trading partner, links, particularly commercial ones,  are being developed with  old and new partners, 
with the aim of diversifying Ecuador's export markets .  Approaches to Arab countries and Turkey, 
and shortly to European countries that are member s of the European Free Trade Area (Switzerland, 
Norway, Liechtenstein and Iceland), as detailed belo w, reflect efforts made in this direction. 
163. Similarly, Ecuador's (non-oil) exports have been concentrated in a very small range of 
products.  Although these have gained significant positi on in international markets, this concentration 
has made it harder to take advantage of the count ry's resources in the exploration and production of 
additional products and has also cau sed dependency on them.  With th e aim of diversifying Ecuador's 
export supply and enhancing it, the c ountry is working very closely with priority sectors, particularly 
MSMEs and organizations in the popular and so lidarity-based economy, to develop the capacities 
needed to achieve sustainable productive and export growth. 
164. Previously, trade negotiations focused on trade liberalization agreements pure and simple, as 
exemplified by the start of negotiations for an FTA between Ecuador and the United States at the 
beginning of the past decade. 
165. In contrast to this scenario, Ecuador is pr oposing and conducting negotia tions aimed at more 
balanced liberalization of tariff and non-tariff m easures, with the aim of achieving complementarity 
between the different economies and reducing the asy mmetries that exist between them.  In the case 
of complementarity , Ecuador's negotiations also aim to fac ilitate bilateral trade, identify productive 
linkages in sectors where the parties could be co mplementary rather than supplementary, thus 
benefiting both fully and mutually.  To obtain a reduction in asymmetries , Ecuador is negotiating 
agreements that reflect the difference in size and development of the economies of the parties both in 
the commitments undertaken and in the texts.  In other words, market liberalization should involve 
different criteria for each party, based on its particul ar relative economic development.  In all of this, 
Ecuador incorporates concepts of cooperation, sust ainable development and political dialogue, among 
others. 
166. With a view to incorporating these elemen ts and introducing additional initiatives in a 
proposal alternative to FTAs, Ecuador has defi ned a strategy for negotiating TDAs.  The trade 
negotiations currently being c onducted by Ecuador include the aforementioned principles. 
Andean Community 
167. According to data from the General Secretar iat of the Andean Community (CAN), exports 
within the community grew by 35 per cent in 2010, in  relation to the 2009 level, attaining a total of 
US$7,810 million.  Ecuador's intra-community ex ports in 2010 amounted to US$2,127 million, 
representing total growth of 34 per cent in relati on to the 2009 figure.  The main intra-community 
market for Ecuador is Peru with a total of US$1, 328 million, which represents 62 per cent of its total 
exports to the CAN. 
168. Ecuador is the second-largest intra-community exporter, accounting for 27 per cent of total 
exports in 2010.  CAN members (the Plurinationa l State of Bolivia, Colombia, Ecuador and Peru) WT/TPR/G/254 Trade Policy Review 
Page 38 
  
  provide an important market for Ecuadorian exports - mainly manufactured goods.  In the period 
1990-2009, CAN represented the following for Ecuador: 
- The leading market for the subsectors of te xtiles, leather, paper and printing, basic 
metal industries and metal products and machinery. 
- The second largest market for the mining, manufacturing, wood, cork and 
non-metallic mineral products sectors. 
- The third largest market for the food, beve rages, tobacco, chemicals, oil, coal and 
other manufactures subsectors. 
- The fourth largest market for the agricultural sector. 
169. Ecuador's total exports to this integration bloc over the last fi ve years averaged 17 per cent of 
its total exports worldwide. 
170. Although Ecuador's exports to the CAN have  been trending downward, dropping from 
19.13 per cent in 2007 to 15.67 per cent in 2009, th e Andean bloc provides the main export market for 
its manufactured products, as mentioned above.12 
171. On the import side, at the manufacturing subsector level, the CAN represented the following 
as a source for Ecuadorian imports in the period 1990-2009: 
- The leading supplier to the food, beverages,  tobacco, textiles and leather, paper and 
printing, and non-metallic minerals subsectors. 
- The second largest supplier to the manufacturing and wood, cork and cork products, 
chemicals, oil and coal subsectors. 
- The third largest supplier to the me tal products and machinery subsector. 
- The fourth largest supplier of the agricu ltural, mining, basic metal industries and 
other manufactures sectors. 
172. Imports from the Andean Community average 19.30 per cent overall.  It should be noted that 
the figures for exports and imports to and fro m the CAN include the Bolivarian Republic of 
Venezuela, which withdrew from the Community in 2006. 
173. In addition, under the CAN framework, nego tiations are ongoing over a proposal to 
implement the Andean Strategic Agenda. 
Bolivarian Alliance for the Pe oples of Our America (ALBA) 
174. ALBA came into being in 2001 at the third Summit of Heads of State held on the island of 
Margarita.  In 2004, the Joint Declaration on AL BA was signed, opening up the possibility for other 
countries of the south to join the new bloc.  Ecuador joined officially in 2009. 
                                                      
12 Reports of the General Secretariat of the CAN. Ecuador WT/TPR/G/254 
 Page 39 
 
 
  175. The ALBA Bank, the Science and Technology Centre, the Import-Export Enterprise, and 
ALBA fair trade stores, together w ith the Telecommunications Enterprise13, are important projects 
proposed in the framework of this integration scheme. 
176. The ALBA integration project is focused on po litical, economic and trade objectives;  and for 
Ecuador, imports and exports with those countries over the last few years have been significant in the 
oil sector, particularly with the Bolivarian Republic  of Venezuela, representing 4.01 per cent of its 
total oil exports in 2010. 
177. Moreover, the single regional clearing-house system  (SUCRE) is expected to be created in the 
financial domain, which aims to "encourage and promote reciprocal trade between these countries, 
minimizing the use of foreign exchange in the payment of the resultant transactions."14 
Latin American Integration Association (LAIA) 
178. Ecuador has been a member of the Latin Amer ican Integration Association (LAIA) since 
1980, one of the main objectives of which is to est ablish a free-trade zone between member countries 
in the long term. 
179. Ecuador has signed partial-scope agreements  with Chile, Cuba, the MERCOSUR member 
countries (Argentina, Brazil, Paraguay, Uruguay) an d Mexico, information on which is submitted to 
the WTO through the LAIA Secretariat. 
Partial-scope and economic comple mentation agreements under LAIA 
180. Ecuador has signed the Ninth Additional Protoc ol to Economic Complementation Agreement 
(ECA) No. 59 with Argentina.  This protocol is in  the final stages of approval by States members of 
ECA No. 59 for subsequent officializa tion with and implementation in LAIA. 
181. With Brazil it has also signed the Eighth Add itional Protocol to Economic Complementation 
Agreement No. 59.  The domestic procedures needed fo r this Protocol to enter into force have been 
completed.  In the case of Ecuador, the instrument was published in Official Register  No. 118 of 
16 February 2011. 
182. With Paraguay, ECA No. 59 was deepened through the reciprocal granting of tariff 
preferences. 
183. On 10 March 2008, the governments of Ecuador  and Chile signed an Association Agreement 
and Partial-Scope Economic Comp lementation Agreement No. 65, which entered into force on 
25 January 2010. 
184. In March 2010, Ecuador and the Bolivarian Republic of Venezuela signed a Cooperation 
Framework Agreement to deepen the trade a nd development ties between the two countries. 
185. In 2008, Ecuador reached agreement with the government of Mexico to deepen bilateral 
trading relations by renegotiating Partial-Scope Agreement No. 29. 
                                                      
13 Source:  Bolivarian Alternative for the Peoples of  Our America, http://www.a lianzabolivariana.org/.  
Viewed on 14 March 2011. 
14 Central Bank of Ecuador, Elementos Técnicos del Sucre  (Technical elements of the SUCRE), 2009. WT/TPR/G/254 Trade Policy Review 
Page 40 
  
  Central American and Caribbean countries 
186. In March 2010, Ecuador and C uba signed the Second Additio nal Protocol to Economic 
Complementation Agreement No. 46 in the LAIA fra mework.  The bilateral tariff preferences granted 
will enter into force once the neces sary domestic procedures have been completed (currently in their 
final phase) for subsequent officialization with LAIA. 
187. On 15 April 2011, Ecuador signed a Partial- Scope Economic Complementation Agreement 
with Guatemala, establishing reciprocal tariff preferences for a small number of products. 
188. Ecuador is also negotiating a Cooperation,  Trade and Complementation Framework 
Agreement with Nicaragua, with the aim of initia ting a process of granting tariff preferences in a 
second stage. 
189. The Republic of Panama is in the process of acceding to the Montevideo Treaty of 1980, for 
the purpose of joining LAIA.  In this context, Panama has negotiated its  market opening schedule 
with Ecuador. 
United States 
190. The United States is Ecuador's main trading partne r as a market for its exports, absorbing over 
30 per cent of its global exports.  The leading exports under the preferences provided by the 
Andean Trade Promotion and Drug Eradication Act (ATPDEA) account for 80 per cent of trade and 
are generally agricultural.  This sector has increased its share of sales to the United States market from 
13 per cent in 2005 to 22 per cent in 2009.  The main  subsectors benefiting from the ATPDEA are the 
floriculture, tuna, horticulture and timber industri es, among others.  The effect of the concessions 
granted by the United States reaches beyond the expo rts from these subsectors, to enhance productive 
linkages:  greater trade with suppliers, greater em ployment, cost reduction, and potential for increased 
investment in related sectors. 
191. In any event, Ecuador seeks to consolidate its trading relations with United States through the 
possible negotiation of trade agreements that go be yond mere liberalization of the respective markets 
and focus on trade for development. 
European Union 
192. Once Ecuador's 16-year banana dispute with the European Union was resolved through the 
signing of the Geneva Agreement on Trade in Bananas, on 31 May 2010, Ecuador notified the 
European Union of its decision to return to the ne gotiating table for the Multipartite Trade Agreement.  
A joint evaluation process for this  purpose is currently ongoing. 
Other negotiations 
193. With the aim of diversifying its export markets,  Ecuador is promoting trade for development 
and cooperation agreements with new partners around the world, including Canada, China, Korea, 
Egypt, Iran, Indonesia, Lebanon and Syria, the countries of the Gulf Cooperation Council (Kingdom of Saudi Arabia, Kuwait, Qatar, United Arab Emirates) , Russia and Turkey.  It also participates in the 
Latin American Pacific Rim Forum (an inform al high-level mechanism for coordination and 
consensus in identifying and implementing joint acti ons to generate synergies between participating 
countries on economic issues, and to increase tr ade to strengthen their relations with the 
Asia-Pacific economies). Ecuador WT/TPR/G/254 
 Page 41 
 
 
  4.1.3 Export and investment promotion 
194. The official planning and implementation of activities to promote exports and non-financial 
investments, both in Ecuador and abroad, used to be the responsibility of the Export and Investment 
Promotion Corporation (CORPEI).  However, follo wing the publication of the Organic Code of 
Production, Trade and Investment in Official Register  No. 351 of 29 December 2010, 
CORPEI's responsibilities were tr ansferred to the Export and Foreign Investment Promotion 
Institute (PRO ECUADOR), created under Article  95 of the aforementioned Organic Code and 
attached to the ministry responsible for foreign trad e policy, currently the Mini stry of Foreign Affairs, 
Trade and Integration (MRECI). 
195. Since the Code of Production has been in force, CORPEI has operated as a non-profit legal 
entity under private law, contributing to the country 's development through priv ate actions to promote 
exports and investments in the country and abroad. 
196. PRO ECUADOR is a decentralized public-law entity with technical, administrative and 
financial autonomy, attached to the Ministry of Foreign Affairs, Trade and Integration.  It is 
headquartered in the city of Guayaquil but has national jurisdiction.15 
197. PRO ECUADOR has the functions of coordina ting and implementing activities to promote 
exports and foreign investments in Ecuador and abroad.  Its objectives are, inter alia , to promote 
Ecuador's export supply of goods and services, c onsolidating current exports and fostering the 
deconcentration and diversification of exporters, products and market s;  promote diversification and 
enhance export supply through investments to generate productive linkages and technological 
innovation;  create, prepare and disseminate an export culture, with emphasis on new players in 
foreign trade (micro, small and medium-sized en trepreneurs and organizations of the popular and 
solidarity-based economy);  promote the strategic in tegration in internationa l trade of all domestic 
products, particularly the goods and services supplied by SMEs, and participants in the popular and 
solidarity-based economy;  strengthen Ecuador's pr esence in the main export markets, and open up 
new markets for products and services. 
198. To fulfil the obligations inherent in its f unctions, PRO ECUADOR implements the policies 
and regulations issued by the Ministry of Foreign Affairs, Trade and Integration, and develops the 
methods and technical tools, among other things, re quired to conduct export promotion and foreign 
investment activities. 
199. The Institute has four areas of work: 
 (1) Investment promotion:  This area  is responsible for holding promotion and 
comprehensive guidance events for potentia l investors, in coordination with 
Ecuador's trade offices abroad (OCEs).  Th e investments in question should promote 
technology transfer, conserve the envir onment, generate productive linkages, and 
target the sectors defined as strategic by  the national government.  In addition, it 
should disseminate Ecuador's legal and re gulatory framework both nationally and 
internationally, collaborate in pooling efforts by all institutions involved in attracting 
investments to Ecuador, both public and private, contributing to the development of services to ensure that investors stay in the country, among other activities.  This area 
consists of investment coordinators, orga nized by continent, who receive investment 
proposals from trade attachés.  The pr oposals are channelled by a domestic 
                                                      
15 Executive Decree No. 776 of 16 May 2011. WT/TPR/G/254 Trade Policy Review 
Page 42 
  
  coordinator who promotes the proposals with  the various chambers of industry and 
commerce, trade associations and institutions. 
 (2) Export promotion:  This area promotes Ecuador's exports by providing specialized 
advisory services to its export sectors, particularly those that have been prioritized 
and have export potential, as well as ensu ring the dissemination of trade opportunities 
by sector, and the coordination, execution and follow-up of trade fairs, missions and other national and international trade promotion events. 
 (3) Exporter services window:  This facility provides advisory services to exporters, 
including information on market access, trade opportunities and support tools, with a 
view to increasing the country's exports;  and training on various foreign trade issues, 
programmes and projects targeting the inclusion of MSMEs and actors from the popular and solidarity-based economy in the country's export supply. 
 (4) Trade and investment intelligence:  Th is area is responsible for detecting and 
generating current and prospective inform ation to support export development and 
attract investments to the country.  As regards international markets, it prepares trade 
and investment reports, export market and product studies, logistical information, 
statistics and international trade analyses. 
200. The Ministry of Foreign Affairs, Trade and Integration has six regional offices, with staff 
trained in foreign trade issues.  These are responsib le for promoting the export supply and actors in 
each of the country's regions, providing foreig n trade information to users, and supporting 
PRO ECUADOR in its activities. 
201. To strengthen the Institute and achieve its obj ectives, Ecuador currently has 27 trade offices 
around the world, whose role is to promote Ecuado r's export supply of goods and services abroad, as 
well as tourism, and to attract foreign investment.  These offices aim to increase exports, improve the 
trade balance and provide the services and info rmation needed to help exporters introduce 
Ecuadorian products into the different markets where they are located. 
202. The Ecuadorian State has promoted the PNBV, as provided for in the new Constitution, 
which defines a new approach to Ec uador's foreign trade policy.  The Ministry of Foreign Affairs, 
Trade and Integration has accordingly launched the i nvestment project to strengthen Ecuador's trade 
offices abroad, with a view to increasing and dive rsifying export products and markets.  Since 2009, 
16 new OCEs have been created, in addition to th e seven trade sections that already existed in 
Ecuador's diplomatic representations abroad.  In 2010 and 2011, four new trade offices were opened, 
and more are projected.
16 
203. The Ministry of Foreign Affairs, Trade and Integration, supported by OCEs and national 
institutions, is seeking to position Ecuador's exports in  the world and diversify its markets, for which 
it has promoted participation by productive sectors in a number of export and investment promotion 
events. 
204. Since PRO ECUADOR was created , the number of export promotion events has doubled, and 
emphasis has been placed on organizing reverse tr ade missions.  As of July 2011, PRO ECUADOR 
and the OCEs had coordinated partic ipation in 27 international trade fairs, six trade missions abroad, 
and 25 reverse trade missions. 
                                                      
16 The new offices will be located in Holland, Chicago, Miami, Singapore and Dubai. Ecuador WT/TPR/G/254 
 Page 43 
 
 
  205. The impact of the investment project to strengthen the network of Ecuador's trade offices 
abroad and the creation of PRO ECUADOR have given the country greater international presence through its OCEs, which have in creased the number of export and investment promotion activities, 
targeted on deepening existing trade, diversifyi ng markets and exporting new products, as well as 
encouraging the participation of new actors in foreign trade. 
Inclusive trade 
206. As provided for in Article 306 of the Constitu tion, since October 2010 an objective has been 
to incorporate new economic agents in external trad e, by promoting stakeholders in the popular and 
solidarity-based economy, along with MSMEs, c ooperatives, organized groups, associations and 
potential export producers, so as to diversify both actors and products and thus establish a fair-trade 
logic in the country.  The sectors involved are agriculture, agribusiness, crafts, fisheries and 
aquaculture, tourism and services, and MSMEs in the metal-working, leather and footwear, chemicals, textiles and food sectors. 
207. The actions being undertaken are based on proposal s for strategies, policies and standards to 
establish the principles of fair trade and thus deve lop an exportable supply for the purpose of creating 
conditions and opportuniti es for organizations and MSMEs to gain access to foreign markets. 
4.2 T
RADE TRENDS  
208. Since Ecuador adopted the dollarization regi me, foreign trade has become even more 
important for the domestic economy, since it largely ensures the flow of currency circulating in the 
country.  The current account of the balance of  payments reflects the importance of trade and 
remittance inflows (Chart 4.1). WT/TPR/G/254 Trade Policy Review 
Page 44 
  
  -902.080.0 284.0758.01,768.0 1,823.01,548.7
143.6
-1,504.0213.9
-716.0-744.0 -954.0 -1,130.0 -1,305.0 -1,371.0 -1,571.4-1,281.8
-1,545.4-395.3
-1,252.0-1,492.0
-1,840.0-1,815.0 -1,828.0 -1,945.0 -1,461.6-1,384.0
-1,054.4-239.81,652.01,769.02,030.02,661.03,104.0 3,184.0
2,945.6
2,431.82,309.5 621.2
-6,000-4,000-2,00002,0004,0006,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1Chart 4.1 
Ecuador:  structure of the current account, 2002-2011 (Q1)
US$ million
Source : Central Bank of Ecuador, Balance of Payments Quarterly Statistical Bulletin (prepared by 
DGEE/MRECI). Goods Services Income Current transfers
 
 
209. Since its last trade policy review, Ecuador in creased its openness index from 53.2 per cent in 
2005 to 63.3 per cent in 2010.  In other words, the volume of exports and imports in relation to GDP 
has been increasing. 
210. The country's overall trade balance has stayed  in surplus, except in 2009 and 2010.  This 
contrasts with the non-oil trade balance (Charts 4.2 and 4.3), which is characterized by a structural 
deficit, thus accentuating the importance of oil sales over and above other products.  Nonetheless, 
non-oil exports are trending upwards, having reached  US$2,060 million in the third quarter of 2010, 
compared to US$1,043 million in the third quarter of 2005 (Chart 4.4). 
211. A product breakdown of non-oil exports reveals this trend in the main export products 
(plantains and bananas, shrimp, coffee and coffee products, cocoa and cocoa products;  and tuna and 
other fish) and other non-traditional products (Chart 4.5). Ecuador WT/TPR/G/254 
 Page 45 
 
 
  212. In 2005, Ecuador's global exports amount ed to US$12,728 million, rising to 
US$17,415 million in 2010.  In addition, export d estinations became more varied;  in 2005, the 
concentration index17 was 0.52, compared to 0.40 in 2010 (Chart 4.6). 
4,678 5,0366,2237,75310,10012,72814,32118,818
13,86317,490
-4,531-5,953 -6,102-7,282
-9,549-11,279-12,907
-17,737-14,097
-19,469147
-917121 470 5511,449 1,414 1,081
-234-1,979
-25,000-20,000-15,000-10,000-5,00005,00010,00015,00020,00025,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Chart 4.2 
Eucador:  overall trade balance with the rest of the world, 2001-2010
US$ million (FOB)
Source : Central Bank of Ecuador, Monthly Statistical Bulletin No. 1913-July 2011 (prepared by DGEE/MRECI). Exports Imports Trade balance
 
 
                                                      
17 The Herfindahl-Hirschman concentration index takes a value between 0 and 1, and shows the share 
of each country as a destination for Ecuador's exports, with 1 denoting the highest concentration, and 0 denoting 
perfect deconcentration. WT/TPR/G/254 Trade Policy Review 
Page 46 
  
  2,779 2,9813,616 3,5194,2305,1845,9937,098 6,8987,817
-4,305
-5,717 -5,491-6,550
-7,823-8,899
-10,329
-14,379-11,759
-15,426-1,526
-2,736-1,875-3,031 -3,592 -3,715-4,336
-7,282-4,860
-7,609
-20,000-15,000-10,000-5,00005,00010,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Chart 4.3 
Ecuador:  non-oil trade balance with the rest of world, 2001-2010
US$ million (FOB)
Source : Central Bank of Ecuador, Monthly Statistical Bulletin No. 1913-July 2011 (prepared by DGEE/MRECI). Exports Imports Trade balance
 
 
694941
1,0431,841
1,6222,060
-165-306
-759
-1,173-421
-1,086
‐1,549
‐2,048
‐2,347
‐4,032‐2,739
‐4,344
-5,000-4,000-3,000-2,000-1,00001,0002,0003,000
Non-oil exports Oil imports Non-oil imports
Source : Foreign Trade Statistics, Central Bank of Ecuador (prepared by DGEE/MRECI).Chart 4.4 
Ecuador:  trend of non-oil exports and imports, 2002-2011 (Q1)
US$ million
Non-oil exports
Oil imports
Non-oil imports
 Ecuador WT/TPR/G/254 
 Page 47 
 
 
  02004006008001,0001,200
Bananas and plantains Coffee and coffee products Shrimp
Cocoa and cocoa products Tuna and other fish Non-traditional
Source : Foreign Trade Statistics, Central Bank of Ecuador (prepared by DGEE/MRECI).Chart 4.5 
Ecuador:  trend of non-oil exports, 2002-2011 (Q1)
US$ million
Non-traditional
Bananas and plantains
Shrimp
Cocoa and cocoa productsTuna and other fish
Coffee and coffee products
 
 WT/TPR/G/254 Trade Policy Review 
Page 48 
  
  4,6785,0366,2237,75310,10012,728
14,32118,511
13,76617,415
10,7660.4070.428 0.4310.4610.5170.549
0.4550.477
0.387 0.3920.445
0.0000.1000.2000.3000.4000.5000.600
02,0004,0006,0008,00010,00012,00014,00016,00018,00020,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(June)Total exports (million) Index of concentration by destination market
Source :  Foreign Trade Statistics, Central Bank of Ecuador (prepared by DGEE/MRECI). Chart 4.6
Ecuador:  global exports and concentration by market, 2001-2011 
US$ million (FOB)
 
 
213. An individual analysis of some of Ecuador's leading export markets worldwide, such as the 
United States, the European Uni on, the Andean Community of Nations or other markets within 
America, shows a generally rising trend, although each of these destinations' share of the total has 
varied.  In 2005 and 2010, total e xports to each market varied as follows:  the United States grew from 
US$5 billion to US$6 billion;  the European Union grew from US$1.3 billion to US$2.3 billion;  the Andean Community grew from US$1.4 billion to US$2. 1 billion.  In terms of the share of global 
exports, both the Andean Community and the United States saw their shares decline, from 13 per cent 
to 12 per cent and from 49 per cent to 34 per cent, respectively.  The European Union's share rose 
from 12 per cent to 13 per cent.  The greatest grow th was with the ALBA countries, which almost 
tripled their share, from 2.1 per cent in 2005 to 6.1 per cent in 2010 (Charts 4.7 and 4.8). 
214. A breakdown of non-oil exports among these des tinations, shows that the European Union 
now has the largest share of the total, ahead of th e United States.  In 2005, the difference in share 
between the two destinations was already one per centage point (29.3 per cent compared to 30.5 per 
cent, respectively), but in 2010 the gap had grown to  over eight percentage points (21.1 per cent for 
the United States and 29.2 per cent for the European Un ion).  This demonstrates the efforts made by 
Ecuador to diversify its markets and reduce its de pendency on certain destinations (Charts 4.9 and 
4.10). Ecuador WT/TPR/G/254 
 Page 49 
 
 
  ALBA CAN MercosurOther
AmericaUnited
StatesNAFTA EU(27)Other
EuropeArab
LeagueSouth-East
AsiaOther Asia RoW
2001 187 666 93 490 1,756 72 694 154 25 15 371 155
2002 100 737 35 415 2,009 51 808 230 19 5 409 218
2003 94 1,018 58 534 2,482 81 1,100 265 47 8 349 188
2004 173 941 112 1,359 3,274 72 1,049 276 39 11 298 148
2005 217 1,387 138 1,269 5,017 122 1,293 324 38 10 121 164
2006 384 1,755 75 1,204 6,791 98 1,494 362 22 13 374 157
2007 727 2,245 122 1,589 6,142 176 1,816 444 36 40 309 674
2008 795 2,478 143 3,110 8,350 114 2,085 578 29 30 517 282
2009 621 1,612 147 3,341 4,571 112 2,068 619 33 27 249 365
2010 1,065 2,100 199 3,385 6,034 138 2,258 617 115 201 757 54701,0002,0003,0004,0005,0006,0007,0008,0009,000
Source : Foreign Trade Statistics, Central Bank of Ecuador (prepared by DGEE/MRECI). Chart 4.7 
Ecuador:  trend of global exports by country grouping, 2001-2010
US$ million 
 WT/TPR/G/254 Trade Policy Review 
Page 50 
  
  ALBA CAN MercosurOther
AmericaUnited
StatesNAFTA EU(27)Other
EuropeArab
LeagueSouth-
East AsiaOther
AsiaRoW
2001 4.0 14.2 2.0 10.5 37.5 1.5 14.8 3.3 0.5 0.3 7.9 3.3
2002 2.0 14.6 0.7 8.2 39.9 1.0 16.1 4.6 0.4 0.1 8.1 4.3
2003 1.5 16.4 0.9 8.6 39.9 1.3 17.7 4.3 0.7 0.1 5.6 3.0
2004 2.2 12.1 1.4 17.5 42.2 0.9 13.5 3.6 0.5 0.1 3.8 1.9
2005 2.1 13.7 1.4 12.6 49.7 1.2 12.8 3.2 0.4 0.1 1.2 1.6
2006 3.0 13.8 0.6 9.5 53.4 0.8 11.7 2.8 0.2 0.1 2.9 1.2
2007 5.1 15.7 0.9 11.1 42.9 1.2 12.7 3.1 0.3 0.3 2.2 4.7
2008 4.3 13.4 0.8 16.8 45.1 0.6 11.3 3.1 0.2 0.2 2.8 1.5
2009 4.5 11.7 1.1 24.3 33.2 0.8 15.0 4.5 0.2 0.2 1.8 2.7
2010 6.1 12.1 1.1 19.4 34.6 0.8 13.0 3.5 0.7 1.2 4.3 3.10102030405060Per cent
Source : Foreign Trade Statistics, Central Bank of Ecuador (prepared by DGEE/MRECI).  Chart 4.8 
Ecuador:  trend of global expo rts by country grouping, 2001-2010
Percentage share
 
ALBA CAN MercosurOther
AmericaUnited
StatesNAFTA EU(27)Other
EuropeArab
LeagueSouth-East
AsiaOther Asia RoW
2001 179 402 93 102 895 48 694 154 25 6 97 84
2002 77 444 32 112 1,028 51 808 230 19 5 94 80
2003 74 511 58 123 1,198 64 1,083 265 47 8 108 78
2004 145 441 60 134 1,121 63 1,049 276 39 11 89 90
2005 164 642 69 149 1,240 93 1,290 324 38 10 89 122
2006 346 871 75 185 1,443 98 1,491 362 22 13 136 143
2007 510 918 122 215 1,416 115 1,788 444 36 40 150 238
2008 620 1,005 143 251 1,571 99 2,085 578 25 30 175 256
2009 579 885 147 248 1,587 112 2,008 619 33 27 170 328
2010 888 1,030 174 298 1,631 138 2,258 617 67 25 248 36905001,0001,5002,0002,500
Source: Ecuador:  Foreign Trade Statistics,  Central Bank of Ecuador (prepared by DGEE/MRECI).  Chart 4.9 
Ecuador:  trend of non-oil exports by country grouping, 2001-2010  
US$ million
 Ecuador WT/TPR/G/254 
 Page 51 
 
 
  ALBA CAN MercosurOther
AmericaUnited
StatesNAFTA EU(27)Other
EuropeArab
LeagueSouth-
East AsiaOther
AsiaRoW
2001 6.4 14.5 3.4 3.7 32.2 1.7 25.0 5.5 0.9 0.2 3.5 3.0
2002 2.6 14.9 1.1 3.8 34.5 1.7 27.1 7.7 0.6 0.2 3.1 2.7
2003 2.0 14.1 1.6 3.4 33.1 1.8 30.0 7.3 1.3 0.2 3.0 2.2
2004 4.1 12.5 1.7 3.8 31.9 1.8 29.8 7.8 1.1 0.3 2.5 2.6
2005 3.9 15.2 1.6 3.5 29.3 2.2 30.5 7.7 0.9 0.2 2.1 2.9
2006 6.7 16.8 1.4 3.6 27.8 1.9 28.8 7.0 0.4 0.3 2.6 2.8
2007 8.5 15.3 2.0 3.6 23.6 1.9 29.8 7.4 0.6 0.7 2.5 4.0
2008 9.1 14.7 2.1 3.7 23.0 1.5 30.5 8.4 0.4 0.4 2.6 3.7
2009 8.5 13.0 2.2 3.6 23.3 1.6 30.4 9.1 0.5 0.4 2.5 4.8
2010 11.5 13.3 2.3 3.8 21.1 1.8 29.2 8.0 0.9 0.3 3.2 4.80510152025303540Per cent
Source : Foreign Trade Statistics, Central Bank of Ecuador (prepared by DGEE/MRECI).Chart 4.10 
Ecuador:  trend of non-oil exports by country grouping, 2001-2010,
Percentage share
 
215. The number of products exported by Ecuador  has increased, and the trend since 2001 has 
been rising.  In 2005, a total of 2,692 products were exported18;  in 2007, there were 3,092 export 
products;  and in 2010 there were 3,247 (Cha rt 4.11).  The index of concentration19 of products 
exported has remained virtually unchanged at 0. 29 in 2005 and 0.28 in 2010 (Chart 4.12). 
216. Like exports, imports have also  been growing, more than doub ling their value over the last 
five years (from US$9,549 million in 2005 to US$19, 469 million in 2010).  The trend is similar when 
imports of petroleum products are excluded:  US$7,823 million in 2005 and US$15,426 million in 
2010 (Chart 4.13). 
                                                      
18 The product definition corresponds to the ten-digit national tariff line. 
19 In this case, the Herfindahl-Hirschman indicator measures the share of each product within the range 
of products supplied, where 1 indicates the highest concentration and 0 indicates perfect deconcentration. WT/TPR/G/254 Trade Policy Review 
Page 52 
  
  4,6785,0366,2237,75310,10012,72814,32118,511
13,766
17,415
10,766
1,6631,7512,2022,3602,6922,7413,0923,021 3,2373,147
2,537
05001,0001,5002,0002,5003,0003,500
02,0004,0006,0008,00010,00012,00014,00016,00018,00020,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (June)
Total exports (million) No. of products
Source : Foreign Trade Statistics, Central Bank of Ecuador (prepared by DGEE/MRECI).  Chart 4.11 
Ecuador:  global exports and numb er of products exported, 2001-2011 
US$ million (FOB)
 
 
2,7792,9813,616 3,5194,2305,184
5,9936,8386,802
7,743
4,5270.3340.343
0.3250.316
0.292
0.273
0.2490.2760.313
0.2830.302
0.0000.0500.1000.1500.2000.2500.3000.3500.400
01,0002,0003,0004,0005,0006,0007,0008,0009,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (June)
Non-oil exports (million) Product concentration index
Source :  Foreign Trade Statistics, Central Bank of Ecuador, cumulative data (prepared by DGEE/MRECI).Chart 4.12 
Ecuador:  global non-oil exports and product concentration, 2001-2011
US$ million (FOB)
 
 Ecuador WT/TPR/G/254 
 Page 53 
 
 
  4,5315,953 6,1027,2829,54911,27912,90717,737
14,09719,469
4,3055,717 5,4916,5507,8238,89910,32914,379
11,75915,426
02,0004,0006,0008,00010,00012,00014,00016,00018,00020,00022,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Total imports
Source : Foreign Trade Statistics, Central Bank of Ecuador (prepared by DGEE/MRECI).Chart 4.13 
Trend of imports
US$ million (FOB)
 
 
217. Ecuador's leading supplier countries are the Un ited States, China and Colombia, while the 
Andean Community of Nations, the European Un ion and MERCOSUR are its main suppliers among 
the trade blocs.  The shares have changed very little in the period 2005-2010, the United States has 
maintained a 14 per cent share, CAN has slipped from 14 per cent to 13 per cent, and MERCOSUR's 
share has dropped from 11 per cent to 7 per cent (Chart 4.14). 
218. A classification by use or economic destination shows that most imports are raw materials, 
intermediate products or capital goods for industry.  Although their values have been growing 
throughout the period, rising from US$3,941 million in  2005 to US$8,008 million in 2010, their share 
of total imports has remained around 40 per cent (Chart 4.15). 
219. A classification by technological intensity points to  another characteristic of the type of goods 
imported by Ecuador.  Most of its  imported products are of low technological intensity.  During the 
period 2005-2010 the number of prod ucts imported in each category hardly varied at all - around 
1,600 low technological-intensity products, and a bout 900 products of medium-technological intensity 
and natural resource intensive manufactures (Chart 4.16). WT/TPR/G/254 Trade Policy Review 
Page 54 
  
  ALBA CAN MercosurOther
AmericaUnited
StatesNAFTA EU(27)*Other
EuropeArab
LeagueSouth-East
AsiaOther Asia RoW
2006 4% 14% 11% 4% 14% 6% 9% 2% 1% 3% 17% 17%
2007 4% 13% 9% 4% 14% 6% 9% 1% 1% 3% 20% 17%
2008 3% 12% 8% 4% 15% 6% 9% 1% 0% 3% 22% 17%
2009 2% 14% 8% 4% 17% 6% 10% 0% 0% 3% 21% 16%
2010 1% 13% 7% 3% 16% 6% 9% 1% 0% 3% 21% 20%0%5%10%15%20%25%
Source : Foreign Trade Statistics, Central Bank  of Ecuador (prepared by DGEE/MRECI).Chart 4.14 
Ecuador:  trend of imports by country grouping, 2001-2010 
Percentage share
 
 Ecuador WT/TPR/G/254 
 Page 55 
 
 
  2,120 2,718 2,727 3,3173,944 4,462 5,261 7,430 6,179 8,008 4,568223 233 608  725  1,718  2,385  2,583  3,221  2,339  4,043 2,439 645 908 1,008  1,189 1,339  1,494  1,794  2,355  1,892  2,248 1,249 557  779 757  860  999  1,091  1,108  1,497  1,202  1,868 879 587  726 544  628  886  1,074  1,231  1,569  1,210 1,656  868 251269292 376 389 424 548 869 705 846 513146 319 166 187 269 335 369 461 502 534 264
0%20%40%60%80%100%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(June)Chart 4.15
Ecuador:  global imports by economic use or destination,2001-2011
US$ million (FOB)
Building materials
Raw materials, intermediate products and capital goods for agriculture
Transport equipment
Durable consumer goods
Non-durable consumer goods
Fuels, lubricants and related products
Raw materials, intermediate products and capital goods for industry
Source :  Foreign Trade Statistics, Central Bank of Ecuador (prepared by DGEE/MRECI). 
 WT/TPR/G/254 Trade Policy Review 
Page 56 
  
  464 483 465 472 467 465 509 434 431 432 4211.651 1.710 1.657 1.688 1.684 1.698 1.782 1.651 1.647 1.666 1.620922 1.010951 949 953 942 978 930 925 943 853900 938 929 929 921 915944931 920 934
904408421426 415 422 401411
394 390394331
05001,0001,5002,0002,5003,0003,5004,0004,5005,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(June)High-tech. intensity Low tech. intensity Natural resource intensive manufactures Medium-tech. intensity Commodities
Source :  Foreign Trade Statistics, Central Bank of Ecuador (prepared by DGEE/MRECI).Chart 4.16
Ecuador:  structure of global imports by technological intensity - no. of 
products
 
 
4.3 F OREIGN DIRECT INVESTMENT  
220. FDI flows into Ecuador averaged US$408.48 milli on per year in the period 2005-2010.  Since 
2003, the amounts have fallen sharply, however, from US$783.3 million in 2002 to US$194.2 million 
in 2007, except for 2008 when FDI attained an a nnual average of US$1,005.7 million.  The leading 
FDI-absorbing sectors in that year were:  mi ning and quarrying, tr ansport, storage and 
communications, manufacturing, business services, and construction. 
221. On average for the period 2005-2010, mining and quarrying absorbed 25 per cent of the 
investment, while manufacturing and commerce rece ived 19 per cent and 15 per cent, respectively. 
222. In relative terms, Brazil accounts for 33 per cen t of the average total net FDI flow into 
Ecuador for the period 2005-2010, the vast majority  of which (99 per cent) targeted the mining and 
quarrying sector.  Panama accounts for 22 per cent, and Spain 13 per cent, among the other main 
countries investing in Ecuador. Ecuador WT/TPR/G/254 
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  Regulatory framework governing foreign investment 
223. As from 29 December 2010, Ecuador has had a modern legal framework that fosters 
production and private investments in the country.  The Code in question is the legal instrument 
needed to give the Agenda for Productive Transformation a modern fra mework that stimulates private 
productive investment. 
224. The Code of Production promotes the developm ent of higher value-added businesses with the 
capability to transform the production pattern (matrix)  through investment ince ntives at the general, 
sectoral and regional levels. 
225. It further provides that foreign investments and investors are to enjoy full protection and 
security, on an equal footing with their Ecuadorian c ounterparts.  This legal framework establishes the 
following practical incentives: 
- General:  applicable to any individual or legal entity that makes new investments in 
any part of the country and in any productive sector. 
- Sectoral:  applicable to any private indi vidual or legal entity making new investments 
in sectors considered priorities for the government. 
- Specific, depressed zones:  applicable to new investments made in zones with low 
development indicators. 
226. The Code of Production recognizes full protecti on and security for foreign investments and 
investors;  in other words foreign investments recei ve the same protection as national investors within 
national territory, in terms of freedom to produ ce and market lawful goods and services, access to 
administrative procedures and control measures to avoid speculative practices, freedom to import and 
export goods, and freedom to transfer peri odic profits abroad, in foreign exchange. 
227. Investors can also sign "investment contracts"  with the Ecuadorian State to protect their 
investments.  These will define the investment conditions for a renewable 15-year period, and can 
specify the national or international arbitration mechanism for resolving disputes. 
228. These contracts can also contain arbitration cl auses for settling disputes between the State and 
the investors, establishing a first-instance administ rative mechanism with a 60-day deadline, followed 
by mediation with a three-month deadline, and arb itration as the final instance, which addresses issues 
of law, handing down final and binding rulings , but does not deal with tax-related matters. 
5. TRADE REGULATIONS AND POLICIES 
5.1 I NSTITUTIONAL FRAMEWORK :  COMMITTEE ON FOREIGN TRADE (COMEX) 
229. The Ecuadorian Government is pursuing its  production, diversification and productive 
transformation strategy in line with public polic y designed to promote production, employment and 
competitiveness through the efficient use of existing resources. 
230. As pertains to trade policy, the Constitution est ablishes the need for international coordination 
guided by principles of fairness and solidarity in or der to further the balanced development of the 
economy, society and the environment.  The Constitu tion encourages membership of blocs, mainly in 
Latin America, to promote diversification of destina tions, products and exporters .  It also prioritizes WT/TPR/G/254 Trade Policy Review 
Page 58 
  
  the formation of production chains that affo rd small and medium-sized producers access to 
international markets. 
231. The National Plan For Good Living (2009-2013) envisages the shaping of a new development 
model, including a new post-petroleum approach  to wealth generation and redistribution. 
232. The priority strategies for attaining that goal include the transformation of the pattern of 
specialization of the economy by means of selectiv e import substitution that will reduce the structural 
weakness of the trade balance, create demand for new industries and reduce external dependence.  
This will go hand-in-hand with a strategy of in creasing real productivity and diversifying exports, 
exporters and global destinations.  These two st rategies will induce change in the pattern of 
accumulation in the economy, thereby transforming th e current scheme (primary production, limited 
human resource capabilities, declining output, low salaries, limited domestic demand, external 
dependence) into a new one (production that creates value, greater human resource capabilities, 
growing output, higher salaries, greater domestic demand, less external dependence).  Similarly, 
another strategy aims for a strategic and s overeign worldwide presence and Latin American 
integration so as to boost endogenous developm ent in Ecuador by rebalancing its geopolitical 
relations in an international context that allows the country to become part of political, economic and 
social networks that offer an alternative and complementary pattern for the country's worldwide 
integration. 
233. Under this approach, the Organic Code of Pr oduction, Trade and Investment (COPCI) aims, 
inter alia , to foster domestic production of, trade in and sustainable consumption of goods and 
services, to promote and diversify exports a nd to step up strategic import substitution. 
234. Adoption of the COPCI gave rise to the creation of the Committee on Foreign 
Trade (COMEX), entrusted with approving nationa l public trade policies and made up of heads or 
delegates of the following institutions: 
- The ministry in charge of foreign trade policy; 
- the ministry in charge of agricultural policy; 
- the ministry in charge of industrial policy; 
- the ministry responsible for the coordination of productive development; 
- the ministry responsible for the coordination of economic policy; 
- the ministry in charge of public finances; 
- the national planning agency; 
- the ministry responsible for the coordination of the strategic sectors; 
- the Internal Revenue Service; 
- the Customs Authority; 
- such other institutions as decided by the President of the Republic. Ecuador WT/TPR/G/254 
 Page 59 
 
 
  235. The duties and powers of the COMEX are to form ulate and approve foreign trade and export 
promotion policies and strategies;  give prior opinions and lay out guidelines for negotiations on 
international agreements and trea ties concerning foreign trade and economic integration;  create, 
modify or dismantle customs tariffs;  review non- tariff rates;  regulate and facilitate exports and 
imports;  issue standards and licences;  approve nomenclatures;  take the necessary steps to remedy 
unfair international trade practices that affect domest ic production;  promote trade in products subject 
to environmental responsibility st andards;  provide for deferre d payment of customs duties, inter alia . 
Chart 5.1
Institutional framework for productive development in Ecuador
Sectoral Council for Production
Committee on Foreign Trade (COMEX) Inter-Ministerial Committee on Quality
Technical Secretariat for TrainingExport and Foreign Investment Promotion 
Institute
 
5.2 T ARIFF POLICY  
236. Tariffs are one of Ecuador's main trade policy instruments as well as a source of tax revenue. 
237. As a member of the Andean Community, C AN (which has had a common external tariff 
since 1995), Ecuador is required initially to ensure that changes to its tariff rates and nomenclature 
reflect the changes to the common external tariff approved by the members of the Community.  The 
members of the Andean Community, however, curre ntly apply the common external tariff with 
numerous exceptions.  For this reason and in orde r to maintain a degree of flexibility in the 
application of tariff levels, Community member c ountries have not been obliged to apply the common 
external tariff since July 2007 (CAN Decision No. 669).20 
238. Under the above-mentioned Decision, Ecuador's  tariff policy is managed on the basis of 
guidelines and parameters designed to reduce the cost  of raw materials, inputs and capital goods that 
are not produced in the country, in order to improve the competitiveness of the production sector, protect local industry as a generator of employment  and added value, increase tax revenue especially 
on goods considered to be luxury items, and correct any kind of disparity by applying tariffs to imports of goods that are also produced locally. 
239. Ecuador grants tariff preferences to all impor ts from the Plurinational State of Bolivia, 
Colombia and Peru in the framework of the C AN and to those from the Bolivarian Republic of 
                                                      
20 Under CAN Decision No. 717, th e final deadline for suspending the application of the common 
external tariff is  31 December 2011. WT/TPR/G/254 Trade Policy Review 
Page 60 
  
  Venezuela under mechanisms for the maintenance of preferences agreed  between both countries.  It 
also grants preferential treatment to imports from co untries with which it has signed agreements in the 
LAIA framework. 
240. The product categories that have benefited fro m tariff reductions include industrial capital 
goods, raw materials and transport equipment, whilst durable and perishable goods have been subject 
to tariffs increases.  Tariff increases have always be en made in keeping with Ecuador's commitments 
in the WTO framework. 
241. Ecuador uses the common tariff classification sy stem of the Andean Community known as 
NANDINA (Andean tariff nomenclature), which is based on the 2007 Harmonized Commodity 
Description and Coding System (HS). 
242. At the beginning of 2011, Ecuador's tariff nom enclature consisted of 7,241 ten-digit lines 
from the HS 2007, or 292 lines more than in 2005 (Chart 5.2). 
243. The average most-favoured-nation (MFN) tariff rate applied was reduced from 11.4 per cent 
in 2005 to 9.2 per cent in 2011.  Similarly, almost 54 .5 per cent of the applied MFN tariff rates range 
between 0 per cent and 5 per cent. 
244. Between 2005 and 2011, the arithmetic average of the MFN tariff rates applied by Ecuador 
fell from 11.4 per cent to 9.3 per cent (Table 5.1). 
245. The maximum ad valorem  rates have remained unchange d since 2005 and are applied as 
follows:  85 per cent on meat offal, 67.5 per cent on rice and 54 per cent on milk and cream. 
246. All tariff lines have been bound since Ecuador  became a WTO Member, with roughly 98 per 
cent of tariff lines bound at rates of 30 per cent or less (in line with the 2002 version). 
247. Ecuador's average bound rate exceeds the averag e applied MFN rate by nearly 12 percentage 
points;  the biggest differences of up to 16-17 pe rcentage points affect grains, milk products and 
oilseeds.  Differences between bound and applied ra tes provide scope to raise the applied rates, 
especially in sensitive sectors (Chart 5.3). Ecuador WT/TPR/G/254 
 Page 61 
 
 
  3.2%35.5%
18.3% 18.5%23.8%
0.0% 0.0%0.7%0.0%46.7%
6.7%11.1% 10.6% 10.6%
3.4%10.1%
0.7%0.1%
05001,0001,5002,0002,5003,0003,5004,000
Duty-free >0-5 >5-10 >10-15 >15-20 >20-25 >25-30 >30 emptyChart 5.2
Frequency distribution of MFN tariff rates, 2005 and 2011
Number of tariff linesaPer cent
Number of lines in 2005 (% of total)
Number of lines in 2011 (% of total)
The total number of lines is 6,949 for 2005 and 7,241 for 2011.
WTO Secretariat calculations, based on data provided by the Ecuadorian authorities.a
Source :
 
 
Table 5.1 
MFN tariff structure, 2005 and 2011  
(Per cent) 
  2005 2011 Final bound rate
1. Bound tariff lines (% of all tariff lines) 100.0 100.0 100.0 
2. Simple average tariff rate 11.4 9.3 21.0 
 Agricultural products (HS 01-24) 16.7 19.6 26.7 
 Industrial products (HS 25-97) 10.6 7.6 20.0 
 Agricultural products (WTO  definition) 15.7 17.3 25.6 
 Non agricultural-products (WTO definiti on) (excluding petrol eum) 10.8 8.2 20.3 
 Textiles and clothing  18.1 14.4 28.4 
3. Domestic tariff peaks (% of all tariff lines)a 0.7 10.8 0.2 
4. International tariff peaks (% of all tariff lines)b 24.4 24.8 67.3 
5. Overall standard deviati on of tariff lines 7.0 11.0 8.2 
6. Coefficient of variation of tariff lines 0.6 1.2 0.4 
7. Duty-free tariff lines (% of  all tariff lines) 3.2 46.7 0.0 
8. Non- ad valorem  tariffs (% of all tariff lines) 0.0 4.9 0.0 
9. Non -ad valorem  tariffs with no AVEs (% of all tariff lines) 0.0 4.9 0.0 
10. "Nuisance" applied rates (% of all tariff lines)c 0.0 0.0 0.0 
a. Domestic tariff peaks are defined as those exceeding three times the overall simple average applied rate. 
b. International tariff peaks are defined as those exceeding 15 per cent. 
c. "Nuisance" rates are those greater than zero, but less than or equal to 2 per cent. 
Source : WTO Secretariat calculations , based on data provided by the Ecuadorian authorities. WT/TPR/G/254 Trade Policy Review 
Page 62 
  
    
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21
Calculations do not include AVEs.  
WTO Secretariat calculations, based on data supplied by the Ecuadorian authorities.Per cent  Chart 5.3                       Average applied and bound MFN tariff rates, by HS section, 2005 and 2011  
 
Note: 
Source : 01   Live animals and animal products         
02   Vegetable products  
03  Fats and oils  
04   Prepared foodstuffs, etc.  
05   Mineral products  
06   Products of the chemical industries 07   Plastic and rubber
08   Hides and skins
09   Wood and articles of wood 
 10   Pulp, paper, etc.
11   Textiles and textile articles 12   Footwear and headgear
13   Articles of stone
14   Precious stones, etc.
15   Base metals and articles of 
base metal 
16   Machinery17   Transport equipment  
18   Precision instruments
19   Arms and ammunition
20   Misc. manufactured articles
21   Works of art, etc.  Average applied rate 2005
(11.4%)Average applied rate 2011
(9.3%) Average bound rate
(21.0%)
MFN 2005
MFN 2011 
Bound 
 
 
248. Ecuador applies tariff quotas in respect of 17 lines (4, 6 or 8 digits).  All goods to which tariff 
quotas are applied are subject to the Andean Price Band System and these quotas are generally assigned to importers on the basis of historic consum ption and may be applied in conjunction with an 
absorption requirement designed to protect nationa l output (importers must buy a portion of the 
national output in order to obtain authorization to import the product). 
5.3 N
ATIONAL LOGISTICS STRATEGY  
Background 
249. Ecuador's logistics and goods transport sector cannot currently meet the needs of the 
production sector, a fact that limits its competitiveness and jeopardizes the implementation of the 
Productivity, Diversification and Transformation Age nda, especially as pertains to the strategies of 
diversification and productive transformation, both of which are based on logistically very complex 
goods. 
250. Most of the services provided are limited to tr ansport services with low added value, whilst 
other more complex ones, such as storage and distribution, are carried out by the production sector 
itself.  There is limited specialization in servi ces, more specifically in cold chain management, 
picking/packing processes and warehouse inventory ma nagement, as well as in specialized logistics 
segments such as food and bulk goods, which lack a quality bulk carrier fleet. Ecuador WT/TPR/G/254 
 Page 63 
 
 
  251. Ill-suited transport equipment affects both the supply of services as well as their degree of 
specialization and limits the range of services on offer.  In that regard, most of the fleet of vehicles21 - 
between 60 per cent and 80 per cent - is considered obsolete, being over 32 years old and generally 
unsuitable for the products transported, which results  in both damage to that equipment and financial 
losses. 
252. At the same time, much of the production sect or regards logistics as a cost factor, which 
impacts efforts to provide more sophisticated services and complicates migration from traditional 
practices and from enterprises with somewhat weak management to models oriented towards service 
provision and the development of value-adding activities.   This is yet another financial barrier to the 
entry of new logistics operators or the provis ion of more sophisticated services by transport 
companies (which are unable to finance th eir projects owing to insufficient demand). 
253. There are also training deficits amongst sma ll and medium-sized providers and users of 
logistics services, both in terms of managerial capabilities and specialized aspects of cargo handling 
(formalities associated with foreign trade, loading and unloading pro cedures, stowage, etc.).  Most 
individual transport operators22 have a low level of training in logistics and cargo handling, a situation 
similar to the vast majority of operators in the production sector. 
254. In light of the above, there is a need for a comp rehensive strategic framew ork to be created to 
guide government action, organize private sector activities and respond to the sector's main problems 
by establishing a forward-looking vision for the natio nal logistics and transportation sector in order to 
coordinate all activities and strategies in pursuit of th is objective.  This strategic framework emanates 
from the formulation of a National Logistics Policy as the basis for establishing the institutional, legal, 
regulatory and financial framework a nd human resource profile of the sector, etc. that are required to 
overcome the problems and move the nation' s logistics system towards the future. 
Aims of the national strategy 
255. The policy objectives reflect what it is hoped to achieve in the system by means of a sectoral 
policy and serve as the basis for formulating the government's action strategies and commitments.  
Hereunder are the ten objectives proposed for the Nationa l Logistics Strategy, together with the scope 
of each one: 
 (a) To progress towards consolidating and form alizing the transport sector, giving rise to 
enterprises that are competitive in terms of  size, robustness, diversification of the 
services on offer, and quality:  FORMALIZATION AND CONSOLIDATION. 
 (b) To encourage the transformation of th e Ecuadorian transport sector into a reliable 
provider of logistics services that are competitive in terms of quality and cost:  TRANSFORMATION OF OPERATORS. 
 (c) To promote the commercialization and inte rnationalization of transport and logistics 
service operators, positioning Ecuador as a qua lity benchmark in the Andean region:  
INTERNATIONALIZATION. 
                                                      
21 70,000 units according to th e National Federation of Heavy Goods Transport (FENATRAPE), 
possibly 100,000 units according to the Ministry of Transport and Public Works (MTOP). 
22 95 per cent of sector representatives state that  they have not completed compulsory education. WT/TPR/G/254 Trade Policy Review 
Page 64 
  
   (d) To boost the modernization and competitiveness of the sector by means of 
entrepreneurial innovation and the incorporation of new information and communication technologies for efficient operations management:  INNOVATION 
AND NEW TECHNOLOGIES. 
- To adapt transport and logistics suppl y capabilities to the real needs of the 
various productions sectors, without ma rket discrimination:  ADAPTATION 
TO PRODUCTION SUBSECTORS. 
- To encourage the development of multimodality in the transport sector as a 
tool for the sustainable and balanced growth of regional potential and use of 
the existing domestic infrastructure:  MULTIMODAL CAPABILITIES. 
- To promote the image of the sector and encourage the reduction of the 
negative externalities associated with cargo transport operations (adverse environmental effects, accidents, physical safety, etc.):  REDUCTION OF NEGATIVE EXTERNALITIES. 
- To adapt the institutions involved wi th the development of the National 
Logistics System to the need to strengthen the transport and logistics sector:  
INSTITUTIONAL ADAPTATION. 
- To promote better use of local logistics and foreign trade infrastructure 
through the establishment of a physi cally and operationally integrated 
national network:  LOGISTICS INFRASTRUCTURE. 
- To commit to the development of national logistical capabilities and 
encourage the professionalization of operations and management in all 
aspects and at all levels of logistics:  NATIONAL CAPABILITIES. 
256. The objectives of internationalizing nationa l operators, developing multimodal capabilities 
and creating a logistics infrastructure network in particular are aimed directly at improving the 
balance of services through the development of local  suppliers, for the benefit of both the domestic 
and regional production sectors. 
5.4 C
USTOMS FACILITATION FOR TRADE  
257. The past five years (2005 to 2010) have brough t an improvement in customs services meant 
to facilitate foreign trade and better control th e entry and exit of goods, cargo units and means of 
transport.  The result is that total clearance time (from the arrival of the means of transport until the 
release of the goods) had been reduced from 11.91 days to 6.54 days at the end of 2010.  This has not 
led to any decline in tax revenues, which instead were up 53 per cent on 2005 levels. 
258. The revision of the Organic Customs Law on 23 October 2007 saw the elimination of the 
certificate of inspection at the place of origin  as a document required to accompany the customs 
declaration, thereby allowing the import sector to save some US$70 million annually.  The 
requirement of approval ( visto bueno ) by the Central Bank of Ecuador prior to the shipment of goods 
being imported for consumption was also eliminated. 
259. The concept of risk profile analyses for goods inspections, introduced as part of the reforms, 
reduced the number of physical inspection procedur es from 75.54 per cent of all customs declarations Ecuador WT/TPR/G/254 
 Page 65 
 
 
  in January 2005 to 25.04 per cent in May 2011.  Pr ofiling based on reasonable doubt also reduced the 
number of physical inspection procedures from 29.80 per cent of all customs declarations in 2008 to 4.47 per cent in 2010.  The use of X-ray and othe r similar scanning technology was also introduced 
for the inspection of goods;  these techniques have on ly been in application for a few months and the 
percentage of inspection procedures concerned was th erefore only 0.87 per cent in May this year.  The 
automatic inspection channel, which allows goods to be released upon electronic validation of the 
customs declaration data transmitted to Ecuador 's customs system and subsequently submitted 
physically, accounted for 27.88 per cent of clearance formalities nationwide in the month of May. 
260. Moreover, customs formalities now include a subsequent control stage allowing for 
inspections at business premises and this has yielded significant results in terms of the number of 
seizures. 
261. CAN Decision No. 671 was adopted in its entir ety in 2010 in order to harmonize the use of 
the special regimes that had been envisaged in Co mmunity legislation and in the domestic laws of 
member countries.  Collaboration has also been under way with in-house personnel from the South Korea Customs Service (which has received several awards from the WCO) to implement the 
new computerized customs system (ECUA-PASS).  The system's various modules include a 
Web-based single window, import clearance, import cargo, export clearance, export cargo, legal system, post-clearance controls, risk management, etc. 
262. The Organic Code of Production, Trade and Investment was enacted on 29 December 2010 
and Title II "Customs facilitation for trade" of Book V thereof has replaced the earlier Organic 
Customs Law.  Book V grants powers to Ecua dor's National Customs Service based mainly on 
streamlined customs processes, proper revenue collec tion, encouragement of fair competition, as well 
as fair and dissuasive penalties. 
263. This new legal text contains concepts such as clearance against guarantee of payment, which 
enables foreign trade operators to  obtain the release of goods immediately upon determination of the 
amount payable in connection with the customs decl aration, without authorization of the relevant 
payment of foreign trade duties and other charges,  provided that an annual comprehensive guarantee 
has been issued for that purpose.  The text also  defines an authorized economic operator as a natural 
or legal person involved in the international move ment of goods and complying with equivalent 
supply chain security standards and hence benefiting from simplified customs procedures. 
5.5 T
ECHNICAL STANDARDS  
264. The first paragraph of Article 52 of the Cons titution of the Republic of Ecuador states:  
"Persons have the right to goods and services of optimum quality and to choose them freely, as well 
as to accurate and reliable information about their content and characteristics".  The second paragraph 
reads:  "The law provides for quality control mech anisms and consumer defence procedures, as well 
as penalties for the infringement of these rights, re paration and compensation for defects, damages or 
poor quality of goods and services and for the interruption of public services not caused by acts of 
God or force majeure ". 
265. Article 4 "Consumer Rights" of the Organic La w on Consumer Protection lays out 14 basic 
rights regarding the quality of goods and services. 
266. Article 3 of the Law on the Ecuadorian Quality System provides as follows:  "It is hereby 
declared State policy to demonstrate and promote quality, in both the public and private sectors, as a 
fundamental and priority factor of productiv ity, competitiveness and national development". WT/TPR/G/254 Trade Policy Review 
Page 66 
  
  267. On the basis of these legal instruments and the aims of the National Plan for Good Living, the 
INEN has established the following st rategic objectives and daily activities: 
- In pursuit of the first strategic objectiv e of formulating and issuing Ecuadorian 
Technical Standards (NTE) and Ecuadorian T echnical Regulations (RTE) to serve as 
references for the production and marketing of raw materials, intermediate products 
and finished goods, the INEN will undertake the following activities:  the study, formulation, defence and issue of Ec uadorian Technical Standards (NTE) and 
Ecuadorian Technical Regulations (RTE);  th e issue of revised Ecuadorian Technical 
Standards;  and the study, formulation, defence and issue of codes of practice, 
practice guidelines and technical manuals. 
- In pursuit of the second strategic objective of  raising the quality of products, services, 
enterprises and staff concerned with quality matters and to enhance competitiveness 
in the domestic and international market s, the INEN will undertake the following 
activities:  certification of the conformity  of products or product samples with 
standards;  certification of conformity with the INEN quality seal;  certification of 
conformity with Ecuadorian technical regulations;  certification of quality 
management systems;  and certification a nd registration of staff working on quality 
matters. 
- In pursuit of the third strategic objective of  contributing to tec hnological development 
in the country by means of physical, mech anical and analytical testing and the 
calibration of weighing and measuring inst ruments, the INEN will undertake the 
following activities:  physical, mechanical and analytical testing of materials, products or product samples for industrial and household use or for research purposes;  and certification of weighting or measuring equipment used in enterprises for gauging mass, length, volume, strength, pressure, temperature and humidity. 
- In pursuit of the fourth strategic objective of protecting the health and safety of 
clients and users of goods or services in th e country through oversight of compliance 
with the requirements of the Ecuadori an Technical Standards and Ecuadorian 
Technical Regulations, the INEN will undertake the following activities:  issuing the certificate (form INEN-1) for imported goo ds subject to control, and issuing 
verification and evaluation reports regard ing product compliance with Ecuadorian 
Technical Standards (NTE INEN). 
268. Since 2005 the WTO has been notified of 58 Ecuadorian Technical Regulations (RTE INEN) 
and five conformity assessment procedures. 
5.6 S
ANITARY AND PHYTOSANITARY STANDARDS  
269. Executive Decree No. 1449 of 22 November 2008 created the Ecuadorian Agency for 
Agricultural Product Quality Assu rance (AGROCALIDAD), which took over all the functions of the 
Ecuadorian Agricultural Health Service (SESA). 
270. The main legal provisions on animal and plant h ealth are set out in national laws, which also 
contain the relevant WTO rules, as well as in various  instruments adopted by the member countries of 
the Andean Community and the Board of the Cart agena Agreement.  The Andean Community has 
updated the Community's regulations on and sanitary requirements for trade both within the subregion Ecuador WT/TPR/G/254 
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  and with third countries in animals, including bovine animals23, horses24, pigs25 and birds26, and their 
products and by-products.  The basic catalogue of animal pests and diseases exotic to the subregion 
was also amended.27  Several phytosanitary standards ha ve been issued since 2005, based on 
AGROCALIDAD Resolution No. 11 "Establishm ent of phytosanitary requirements". 
271. AGROCALIDAD also registers goods such as pesticides and veteri nary products in keeping 
with international regulations such as Decisions  Nos. 436 and 483 of the Andean Community of 
Nations. 
272. AGROCALIDAD forms part of the National Codex Alimentarius Committee (CNCA), 
created by Executive Decree in October 2004 as an advisory body to the National Government and 
responsible for studies and proposals on and the analys is and assessment of all matters relating to the 
work of the Codex Alimentarius Commission. 
273. No cost/benefit analyses are used  in the drafting of phytosanitary regulations for imported or 
exported plant products.  The pest risk analy ses (PRAs) used to determine the phytosanitary 
requirements for imported plant products, for ex ample, entail qualitative rather than quantitative 
studies.  They are first and foremost scientific studies to identify pests and/or diseases that may be 
present in both import and export products, based on the application of IPPC international standards 
for phytosanitary measures (ISPMs) regarding pest risk analyses and risk mitigation measures and on 
decisions by the World Organisation for Animal He alth (OIE) and international bodies involved with 
pesticide management, such as the Rotterdam C onvention.  AGROCALIDAD therefore has personnel 
trained in IPPC, OIE and CODEX ALIMENTARIUS standards. 
274. AGROCALIDAD is also active with regard to th e importation of products  under its control, 
such as plants, animals and/or pesticides and veteri nary products.  Imports c overed by an animal or 
plant health certificate (issued by the national plan t protection organization in the country of origin) 
are subject to physical inspection by AGROCALIDAD at the port of entry.  If the outcome of the physical inspection is satisfactory, AGROCALIDAD  issues a permit allowing the goods to enter.  
Non-compliant products are rejected and must be re-exported to the country of origin or, after a 
certain time lapse, they are declar ed as abandoned and are destroyed.  What is issued is not a permit 
but a phytosanitary release document, known as a cu stoms destination documen t, that allows the 
interested party to continue inward clear ance formalities with the customs authorities. 
275. A sanitary certificate issued by the Ministry of Public Health is required for imports of 
additives, processed foods, medicines, drugs, hom eopathic products, medical devices and household 
pesticides.  In addition to the sanitary certificate,  an import licence must be obtained from the same 
ministry for the importation of additives, process ed foods and their raw materials, medicines, 
cosmetics, drugs, homeopathic products, medical devices and household pesticides. 
276. Since 2005 Ecuador has submitted 279 sanitary- a nd phytosanitary-related notifications to 
the WTO. 
                                                      
23 Resolutions Nos. 1130 and 1267. 
24 Resolution No. 1160. 
25 Resolutions Nos. 1183-623. 
26 Resolution No. 1285. 
27 Resolution No. 1012 amending Resolution No. 847. WT/TPR/G/254 Trade Policy Review 
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  5.7 I NTELLECTUAL PROPERTY  
277. The 2008 Constitution of Montecristi covers inte llectual property rules on the protection of 
traditional knowledge, copyri ght and access to genetic resources.  It represents a major step forward in 
intellectual property protecti on, as the supreme law now expressly addresses various areas of 
intellectual property protection that had not been covered previously. 
Patents:  Compulsory licences for pharmaceutical patents 
278. Executive Decree No. 118 of 23 October 2009 stat es that access to medi cines used for the 
treatment of diseases that affect the Ecuadorian popula tion and constitute a public  health priority is a 
matter of public interest and that compulsory licen ces may accordingly be issued on patents for the 
medicines for human use needed for their treatme nt.  Article 64 of CAN Decision No. 486 on the 
Common Industrial Property Regime lays out th e conditions stipulated in Article 31 of the 
TRIPS Agreement under which member c ountries may issue compulsory licences. 
Enforcement of trademark rights and copyright 
279. The Ecuadorian Intellectual Property Institute  (IEPI) has had the authority to enforce 
trademark rights and copyright since its inception.   There are two options, namely administrative 
control and border measures, whether ex officio or on application by an interested party. 
280. There has been an average of 50 administrativ e control proceedings per year since 2005.  
Although most of the proceedings were initiated by  aggrieved right-holders, since 2010 the IEPI has 
initiated administrative proceedings ex officio to identify and punish major marketing channels for 
unlawful reproductions of audiovisual products.  Tho se rulings have been challenged by the offenders 
before the competent courts, which ha ve upheld the findings of the IEPI. 
281. Border measures were introduced in 2007 and by April 2011 over 1,000 such measures had 
been taken, almost all of them ex officio.  In ve ry few instances did the affected right holders attend 
the proceedings to defend their interests, a fact that  complicated the task of the customs administration 
and the IEPI in determining the existence of an infringement. 
282. Moreover, an analysis of the entire univer se of border measures reveals that the most 
frequently infringed form of intellectual property is  copyright, by means of reproductions or copies of 
protected images or the use of copyrighted work s in goods without a licence or authorization. 
283. In 2010, for example, of the 189 border measures taken, 104 corresponded to copyright 
violations.  A total of 78 measures corresponding to all the forms of intellectual property have so far 
been taken in 2011. 
284. The IEPI undertakes awareness-raising and dissemination campaigns in respect of intellectual 
property amongst public and private entities, leadi ng to the launching and settlement of administrative 
controls and the adoption of border measures.  It should be noted that the IEPI organizes 
dissemination exercises targeting different groups and participates in fairs and events throughout the 
year.  The aim is to make more people aware of their rights as creators and to reduce the number of 
instances of infringement and non-observance of the law.  The result has be en an increase in the 
number of works registered with the IEPI (2 ,132 works registered in 2009 compared with 
2,386 registrations in 2010) and ongoing recour se to administrative control procedures because 
creators are aware of their rights and are bringing actions accordingly.  Hence, six copyright-related Ecuador WT/TPR/G/254 
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  administrative actions were brought in 2005, for example, 54 in 2006, 46 in 2007, 60 in 2008, 40 in 
2009 and 42 in 2010. 
5.8 Q UALITY POLICY  
285. The quality policy of the National Quality System  is based on standards that safeguard and 
promote the well-being of citizens by encouragi ng the production of quality industrial goods and the 
consumption of goods and services that are of good quality, healthy and safe.  The National Quality 
System operates in two fields of action. 
286. The Quality Policy is aligned with the National Plan for Good Living, the Industrial Policy, 
the Agenda for Productive Territorial Tr ansformation and the Code of Production. 
287. The action lines of the quality policy are inspir ed by the law on quality, the objectives of 
which are as follows:  (i) to regulate the functioning of the Ecuadorian quality system;  (ii) to coordinate the participation of th e public administration in conform ity assessment activities;  (iii) to 
establish mechanisms and incentives for quality promoti on in the Ecuadorian society;  (iv) to establish 
the requirements and procedures for the preparatio n, adoption and implemen tation of standards, 
technical regulations and conformity assessment pr ocedures;  (v) to ensure that the standards, 
technical regulations and conformity assessment procedures are adapted to the international 
conventions and treaties to which the country is signa tory;  (vi) to ensure the security, reliability and 
fairness of market relations in the trading of do mestic or imported goods and services;  (vii) to 
organize and determine institutional responsibilities th at are consistent with the proper and timely 
provision of internal and external notification and information regarding standards, technical 
regulations and conformity assessment procedures. 
288. Furthermore, four main pillars have been id entified for the implementation of the quality 
policy:  (i) standardization;  (ii) metrology;  (iii) accreditation;  and (iv) conformity assessment. 
289. This requires the introduction of mechanisms to render the quality policy more practicable 
through:  (i) the Inter-Ministerial Committee on Quality;  (ii) the Ecuadorian Standardization 
Institute (INEN);  (iii) the Ecuadorian Accreditati on Agency (OAE);  (iv) the public entities and 
institutions which, depending on their areas of res ponsibility, are able to issue standards, technical 
regulations and conformity assessment procedures;  (v) the Ministry of I ndustry and Productivity 
(MIPRO), the body responsible for the Ecuadorian Quality System. 
5.9 C
OMPETITION AND CONSUMER PROTECTION POLICIES  
Competition policy 
290. A draft Organic Law on Control of Market Po wer (Competition Law) has been prepared and 
is expected to be adopted during the current year 2011. 
291. This draft Law was prepared pursuant to the UNCTAD Model Law on Competition and in 
keeping with the principles of modern comparativ e law, whilst recognizing the specificities of the 
situation in Ecuador. 
292. Regional and worldwide experience shows that the only way to protect consumers and the 
entrepreneurs themselves from the distorting effects of competition is by means of a dedicated legal 
framework.  This will entail the adoption of an Organic Law on Control of Market Power 
(Competition Law) that empowers Ecuador's national competition agency to investigate and possibly WT/TPR/G/254 Trade Policy Review 
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  penalize instances of abuse of a dominant position, co mpetition-restricting arrangements, and to curb 
anti-competitive mergers or concentrations.  This dr aft Law will also include rules that allow for the 
investigation and possible penalization of acts of unfair competition. 
293. Like the more modern competition laws, the dr aft Organic Law on Control of Market Power 
(Competition Law) assumes that competition must be pr otected and, as a legal asset, cannot be left up 
to the sole discretion of economic agents.  It fu rther assumes that the market lacks the self-regulatory 
mechanisms that would prevent distortions arising from anti-competitive or unfair practices and that 
in such cases the State must interv ene with clear and transparent ru les.  This is possible only by 
incorporating into the Ecuadorian legal order the Organic Law on Control of Market Power, which 
would protect the interests of 14 million Ecuadorians  through an institution created for that purpose. 
294. The Law therefore imposes on the economic player s in the market the obligation to compete 
and provides for monitoring of compliance with th is obligation.  As is the case in all markets 
worldwide, and particularly in those that are similar to Ecuador's, the first effects of the 
implementation of this law in Ec uador will be better prices and/or quality of goods and services on the 
market and a significant reduction in unfair comp etition amongst entrepreneurs, all of which will 
obviously benefit consumers and the market directly. 
Consumer protection 
295. The rights of consumers and users in Ecuador  are enshrined in the Constitution.  Thus, 
Article 52 of the Constitution of the Republic of Ecuador states:  " Persons have the right to goods and 
services of optimum quality and to choose them freely, as well as to accurate and reliable information 
about their content and characteristics.  The law provides for quality control mechanisms and 
consumer defence procedures, as well as penalties fo r the infringement of these rights, reparation and 
compensation for defects, damages or poor quality  of goods and services and for the interruption of 
public services not caused by acts of God or force majeure ". 
296. This constitutional framework contains specific regulations for the protection of consumer 
rights, laid out in the Organic Law on Cons umer Protection (LODC) and its implementing 
regulations.  There are two important aspects to the aforementioned LODC.  The first is that it is an 
organic legal standard, which, pursuant to Article 425 of the Constitution, is hierarchically superior to 
ordinary laws and inferior only to the Constitution itself.  This means that, in the event of the 
coexistence of or conflict between general legal standards that regulate a particular matter, the 
LODC provisions for consumer protection and defe nce will prevail.  The second important aspect is 
that the Organic Law on Consumer Protection cuts across other areas pertaining to the provision of 
goods and services. 
297. Despite being in force since 2000, the Organic Law on Consumer Protection has not been 
very effective in generating measur es and public policies.  It has only been in recent years, however, 
and under this government in particular, that there has been a directive to strengthen the protection of 
consumer rights and that this has taken concrete form bot h legally and institutionally.  The final article 
of the implementing regulations of the Organic La w on Consumer Protection designates the Ministry 
of Industry as the government agency responsible  for the implementation of the aforementioned 
Regulations. 
298. The Consumer Defence Directorate (DIDECO) was therefore set up within the Ministry of 
Industry in July 2009 as the first government body for the protection and defence of consumer rights.  
The DIDECO is charged with promoting the rights and duties of consumers by means of training and Ecuador WT/TPR/G/254 
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  dissemination programmes, and with strengthening re lations with national and international entities.  
Under Ministerial Agreement No. 10-356, the DI DECO has specific powers and responsibilities, 
including to propose, implement and oversee pub lic policies, programmes, projects and actions 
pertaining to consumer protection, to ensure impl ementation of the LODC a nd applicable regulations, 
and to raise awareness among suppliers to ensure that they exercise their rights and fulfil their 
obligations to consumers. 
299. The DIDECO has accordingly undertaken market surveillance to monitor possible breaches of 
the law and adopted measures to counteract such pr actices;  it has provided training to suppliers and 
consumers;  further, it has strengthened its presence vis-à-vis  cooperation agencies and other 
consumer protection bodies, for example organizi ng the Consumer Protection Forum in conjunction 
with UNCTAD.  The DIDECO has also taken part in  international events on the theme of consumer 
protection at regional level, and has benefited from th e sharing of experiences in order to reinforce its 
activities. 
5.10 G OVERNMENT PROCUREMENT  
300. The National Public Procurement System (S NCP), established by the Organic Law on the 
National Public Procurement System published in Official Register  Supplement No. 395 dated 
4 August 2008, is a package of principles, standard s, procedures, mechanisms and organized relations 
geared towards the planning, programming, budgeti ng, control, administration and execution of 
procurement by contracting entities.  Its main aims  are to guarantee the quality of public spending and 
its execution in accordance with the National Developm ent Plan, ensure transp arency in government 
procurement, stimulate national pro duction, and obtain the participati on of craftspeople, professionals, 
micro, small and medium-sized enterprises and, in general, reliable and competitive suppliers, whilst 
modernizing public procurement processes. 
301. Under the legal system, the National Institute fo r Public Procurement (INCOP), created by the 
same law, oversees the National Public Procurement System and, to this end, exercises a series of 
powers aimed in essence at requiring and securing co mpliance with the priority objectives of the 
system.  In pursuit of these objectives, it was establis hed that the use of Ecuador's Official Public 
Procurement System, COMPRASPUBLICAS, would be  mandatory and that the system would be 
managed by INCOP.  In this rega rd, the Institute oversees the system  but has no powers of sanction.  
In the event of breaches of the regulations arisi ng from the contracting processes carried out by the 
contracting entities, it is the Comptroller-General an d the Attorney-General of the State that, in the 
exercise of their powers, impose the penalties they deem appropriate. 
302. The National Public Procurement System (SNCP)  has evolved positively since its inception.  
In 2008, the Official Public Procurement Sy stem (SOCE) underwent a complete overhaul:  a 
workflow engine was introduced, making it possible to  establish parameters for the different stages of 
the contracting processes;  a tool was developed for setting parameters for the screens used to 
generate the various processes;  and the tools for reverse auction, te ndering, publication and 
registration of suppliers and contracting entiti es were restructured.  The initial technological 
infrastructure needed to support the Official Pub lic Procurement System was purchased and the first 
version of the Annual Procurement Plan (PAC) module was put into operation.  The year 2009 
brought the introduction of the following functionalities:   direct/low-value contracting, bidding by 
invitation and open calls for tende rs for goods, services and works, competitive bidding with respect 
to consulting services, and the online catalogue.  Cha nges were made to the various tools so as to 
adapt them to the regulations in force and the m odel terms and conditions.  The second version of the 
PAC module was also implemented.  In 2010 the stor age system was expanded in order to support the WT/TPR/G/254 Trade Policy Review 
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  Official Public Procurement System and optimized  to enhance its performance.  The presentation of 
the system was improved to make it more user-friendly, new features were incorporated, the emergency publications tool was im plemented, the error validation stage restructured and the storage 
of system files optimised, and the accounts of s uppliers not whitelisted by the Internal Revenue 
Service, i.e. that failed to meet their tax obliga tions on a timely basis, were disabled.  The Annual 
Procurement Plan (PAC) was incorporated in accordance with the budget lines established in the 
Integrated Financial Management System (eSI GEF), and online interaction with the National 
Planning and Development Secretariat (SEN PLADES) was set up in order to deliver 
INCOP statistics. 
303. In a nutshell, 2008 saw the development of the engine that would support the entire system 
and the introduction of the latest emerging tools for its operation;  in 2009, all the other tools required 
for full compliance with the existing regulations were  put in place;  and in 2010, work was carried out 
to optimize the system and develop additional tools for special contracting procedures.  This work 
will continue during the current year 2011 with th e implementation of new features such as the 
post-contract stage, digital signature, inter alia . 
304. The Organic Law on the National Public Proc urement System governs procurement by all 
agencies and departments that make up the public sector, including the Central Public Administration, the Institutional Public Administration and the Aut onomous Local Regime.  Also subject to this law 
are civil corporations, foundations or partnerships when they are made up of public sector entities or 
possess or administer funds and, in general, rights belonging to the State (including mercantile 
companies that administer funds and rights belonging  to the State).  Against this background, the 
contracting entities present in the Single Regi ster of Suppliers (RUP) numbered 9,796 in 
February 2011, of which 5,014 were qualified.  There are also 156,670 registered suppliers, 
111,811 of which are qualified;  these include public enterprises and bodies that can act concurrently 
as both procuring entities and suppliers. 
305. For the period January 2010 to February 2011, the system reports a total of 
189,258 procurement processes carried out via the Web portal with a total budget of 
US$6,977 million, an adjudicated value of US$6, 630 million and hence a saving of US$486 million.  
The most frequent procurement processes are direct  contracting and the electronic reverse auction, 
followed by the online catalogue.  This latter category expanded considerably during 2010 and 
currently includes a total of 2,351 registered ite ms, covering vehicles, office supplies, printing 
equipment, computer equipment, cleaning suppli es and assistance products for the disabled.  It 
therefore embraces a significant market for products  that are purchased on a regular basis by the 
contracting entities, which has facilitated and stre amlined purchase procedures.   The success of the 
online catalogue has prompted public entities to requ est the inclusion of a greater number of goods 
and services so as to facilitate their procurement. 
306. Micro-enterprises have reported the greatest am ount of procurement, followed very closely by 
small enterprises.  This is eviden ce that the system's aim of encouraging participation by micro and 
small enterprises - which under the previous system ha d been negligible or non-existent - is being 
met. 
307. Furthermore, between January 2010 and Februa ry 2011, 43 per cent of purchases were of 
goods, 28 per cent works and 24 per cent services, th e rest consisting of consultancy, insurance and 
pharmaceutical products.  It should be noted that t hose purchases are contingent upon the needs of the 
contracting enterprises and must be in full complia nce with the Annual Procurement Plan (PAC). Ecuador WT/TPR/G/254 
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  308. In the exercise of its powers, INCOP has overseen a total of 2,654 processes between 2010 
and 2011 and has monitored 2,390, which means that it has directly supervised 87.54 per cent of the 
procurement processes carried out via the system. 
309. Given that the Institute has no powers of sanction,  and in compliance with the law, a total of 
168 processes, in respect of which INCOP has re quested information regarding unsubstantiated 
transactions, have been submitted to the Comptrolle r-General of the State.  Similarly, INCOP has 
reported 263 processes regarding which it has not r eceived a reply from the contracting entities in 
relation to its comments.  Once it is in possession of the information, it is th e supervisory authority 
which is responsible for impos ing the relevant penalties. 
5.11 E NVIRONMENTAL AND TRADE POLICY  
310. The 2008 Constitution of Ecuador enshrines the ri ght of the population to live in a healthy 
and ecologically balanced environment that ensures sustainability and a good way of 
living (Article 14).  Similarly, it provides that th e economic system must be in harmony with nature 
and guarantee environmentally r esponsible consumption (Articl es 283-284).  Furthermore, it 
recognizes that the State will guarantee a sustainable development model that ensures satisfaction of 
the needs of present and future generations (Artic le 395).  Moreover, the 2009 National Plan for Good 
Living reiterates the need to promote a healthy an d sustainable environment and guarantee safe access 
to water, air and the soil.  It further reiterat es the appropriateness of and obligation to establish a 
supportive and sustainable economic system. 
311. The National Environmental Policy is based on the principles of the Constitution and ties in 
with the precepts of the National Plan for Good Living.  The Policy accordingly emphasizes the close 
linkages between the economy and the ecosystem by building the environmental variable into the economic model.  It further highlights the adaptati on of the production sector to environmental best 
practices, the sustainable mining of renewable resources and incentives for profitable productive activities with a low environmental impact.  The po licy also focuses on the efficient use of strategic 
resources for sustainable development.  It further includes the need to deal with climate change in 
order to reduce social, economic and environmenta l vulnerability.  The strategies to that end are 
related to mitigating the impacts of this environmental phenomenon and other natural and 
anthropogenic events on the population and the ecosyst ems, stepping up integrated risk management 
and reducing greenhouse gas emissi ons in the production sector. 
Yasuní Initiative (ITT) 
312. In 2007, President Rafael Correa of Ecuador a nnounced before the General Assembly of the 
United Nations the country's commitment to refra in indefinitely from exploiting reserves of 
846 million barrels of petroleum in the ITT (Is hpingo-Tambococha-Tiputin i) field, which are 
equivalent to 20 per cent of the country's reserv es and located in the Yasuní National Park in 
Ecuador's Amazon region. 
313. The President proposed that, in exchange, the international community should make a 
financial contribution of at least US$3,600 million or the equivalent of 50 per cent of the funds that 
would accrue to the State should it decide to mine  the oil.  A capital fund was thus created under 
UNDP administration, with the participation of the State, Ecuadorian civil society and taxpayer 
representatives.  This initiative will preven t the emission of 407 million tonnes of CO
2, the gas mainly 
responsible for climate change.  Th is reduction is greater than the a nnual emissions of countries such 
as Brazil or France. WT/TPR/G/254 Trade Policy Review 
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  314. At the time, President Correa said in New York:  "This would be an extraordinary example of 
global collective action that would not only reduce gl obal warming, to the benefit of the whole planet, 
but also introduce a new economic logic for the 21st century that rewards the creation of value and not 
just the production of merchandise". 
315. The Yasuní National Park is the planet's bigg est biodiversity reserve and home to the Tagaeri 
and Taromenane peoples, both of whom live in voluntary isolation in Ecuador. 
5.12 N ATIONAL TRANSPARENCY AND ANTI-CORRUPTION PLAN 
Principles 
316. The principles of social change enshrined in the Constitution, the laws and in the Plan for 
Good Living are intended to improve the living condi tions of the citizens of Ecuador, consolidate the 
constitutional State governed by the rule of law and social justice and build a society that is more 
inclusive, diverse, plural and supportive. 
317. Both the Constitution and the new laws designe d to put it into practice are based on the 
recognition of the role of the State as guarantor of citizens' rights and the mechanisms to be put in 
place for the effective exercise of those rights.  This legal mandate is a fundamental component of 
public management, in particular with regard to r espect for the principles of transparency, efficiency 
and ethics. 
318. The main planks of the strategies and ac tions under the National Transparency and 
Anti-Corruption Plan are to implement this guarant eed rights approach and combat impunity and the 
abuse of power and discretion in decision- making by authorities and public servants. 
319. In the Government's view, the ethical revolution entails, inter alia , transforming the public 
service to bring about transparent and efficient mana gement, root out corrupt practices and relations 
amongst public servants and private players, ensure  citizen involvement in social monitoring 
processes and help to strengthen business and trade union ethics and liability based on transparency 
and compliance with the law. 
320. The National Plan also embodies cultural values that  are representative of the society, such as 
honesty, loyalty, responsibility, probity, respect and dignity, which have been handed down for 
generations and which, in addition to good citizenship, express the resolv e to follow a path of fairness, 
freedom and solidarity. 
321. Good Living is not about macroe conomic objectives, which can show results whilst masking 
the implications for each individual citizen;  it requi res the reshaping of relations between the public 
and private spheres.  To that end, the objectives must be made transparent and the coverage of 
education, health and social assistance expanded.   Such an expansion is possible only by better 
distributing resources.  The National Transparency  Plan will therefore help to recover national 
resources and prevent them from being sapped by corr uption, enabling them instead to be invested 
such that they reduce unfairness and inequality.  Good Living requires everyone to display a capacity 
for mobilization and commitment, in other words, good citizenship. 
322. The interpretation by the National Secretariat for Transparency in Management (SNTG) of 
transparency as "an attitude and behaviour that a llow all persons, organizatio ns and institutions to 
show their actions and provide information so th at citizens are able to exercise their rights and 
obligations" makes this a powerful tool to the extent  that the players involved can be convinced that Ecuador WT/TPR/G/254 
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  transparency benefits everyone.  Transparency makes for responsible public management, enabling 
citizens, in awareness of their rights, to dema nd accountability, and subj ecting tenders submitted by 
suppliers to the State to clear rules and transparent decisions. 
323. The implementation and execution of the nationa l plan comes within the framework of the 
Constitution chapters on "Participa tion and Organization of Power", "The Good Living System" and 
"Supremacy of the Constitution of the Republic", Article  3 of which states with respect to the prime 
duties of the State:  " 8.  Guaranteeing its inhabitants the right to a culture of peace, to integral 
security and to live in a democra tic society free of corruption ".  Article 141 on the powers of the 
President of the Republic lays out the fields of  action of the national government as follows:  " The 
Executive Branch is composed of the Office of the President and the Office of the Vice-President of 
the Republic, the Ministers of State and the other or ganizations and institutions needed to fulfil, in the 
framework of their competence, the attributions  of leadership, planning and implementation and 
evaluation of national public policies and plans that are created to implement them ". 
324. Similarly, Article 147, subparagraph 3, of the Constitution states in reference to the powers 
and duties of the President:  " To define and direct the public policies of the Executive Branch ", and 
finally, Article 206, subparagraph 1, describes the powers of the Transparency and Social Control 
Branch as follows:  " To draw up public policies on transpa rency, monitoring, accountability, the 
promotion of public partici pation and the prevention of and fight against corruption ", whilst 
subparagraph 3 reads:  " To coordinate the drafting of the national anti-corruption plan ". 
325. Although this latter article outlines the powers of  the Transparency Branch with respect to 
coordination of the drafting of the National Anti-Corr uption Plan, the SNTG is of the view that it is 
also incumbent on the Executive Br anch to assist in an effective and timely manner in the fight 
against corruption and the implementation of public po licies that make for transparency and efficiency 
in the management of public affairs, thereb y embodying the spirit of the constitutional text. 
Main sources and legal bases of the Nation al Transparency and Anti-Corruption Plan 
Constitution 
Constituent elements of 
State Participation and Organization of Power 
Good Living System 
Supremacy of the Constitution 
Fundamental 
principles Executive Branch Transparency and Social Control Branch 
Article 3 
It is a prime duty of the 
State to guarantee its 
inhabitants the right to 
live in a democratic 
society free of 
corruption Article 141 
The Executive Branch is 
responsible for leading, 
planning, implementing 
and evaluating national 
public policies and plans 
that are created to 
implement them. Article 147 
Power of the President of 
the Republic to define and 
direct the public policies 
of the Executive Branch Article 206.1 
Formulation of public policies 
on transparency, monitoring, 
accountability, the promotion 
of public participation and the 
prevention of and fight against 
corruption Article 206.3 
Coordination of the 
drafting of the 
National 
Anti-Corruption Plan
 
326. Similarly, the National Transparency Plan propo sed by the SNTG for th e Executive Branch is 
also framed within the National Plan for Good Living, specifically in objectives Nos. 1:  " To foster 
social and territorial equality, coh esion, and integrat ion with diversity ";  3:  " To improve the quality 
of life of the population " ;   5 :   " To guarantee sovereignty and pea ce and to promote Ecuador's 
strategic insertion in the world and Latin American integration " ;   9 :   " To guarantee rights and 
justice " ;   1 0 :   " To guarantee access to public and political participation ";  and 12:  " To build a 
democratic State for Good Living ";  and especially within policies 10.2:  " To reinforce, generate and 
innovate new forms of checks and balances and accountability for constituents ";  10.4:  " To guarantee WT/TPR/G/254 Trade Policy Review 
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  free and timely access to public information ";  12.2:  " To consolidate the new institutional 
organization of the State to recover the State's govern ing, planning, regulation, control, research and 
participation capacities ";  and 12.4:  " To foster efficient and competent public services ". 
327. The Transparency Plan embodies the principl es of the United Nations Convention against 
Corruption, the Inter-American Convention against Corruption and the Andean Anti-Corruption Plan 
(CAN Decision No. 668), which are binding on Ec uador.  It is also based on Policy No. 3 (" To 
achieve transparent public management ") of the Sectoral Policy Agenda of the Government of 
Ecuador. 
6. SECTORAL POLICIES 
6.1 A GRICULTURE , LIVESTOCK , AQUACULTURE AND FISHERIES  
328. In constant terms, the share of the agricultu re and livestock sector (agriculture, livestock, 
hunting, forestry and fisheries) averaged 10.28 per cent of overall GDP between 2005 and 2010.  If 
the expanded contribution of agriculture and other GDP subsectors is adde d, the figure would be 
approximately 25 per cent. 
329. The products described as traditional exports (b ananas, coffee, cocoa) trend upwards during 
the review period, although their share in the count ry's non-oil exports is only 33.50 per cent.  It is 
worth highlighting the importance to the nation's economy of the substantial foreign exchange 
garnered by exports of bananas, cocoa and coffe e, which are still trending positively, and their 
commensurate contribution to the public treasury. 
Table 6.1 
Share of agriculture in Ecuadorian nominal GDP 
in US$ thousand (2000) 
Year GDP Agriculture, livestock, 
hunting and forestry Fisheries Agriculture and 
fisheries % Share 
2005 (semi-definitive figures) 20,965,93 4 1,814,314 330,598 2,144,912 10.23 
2006 (semi-definitive figures) 21,962,13 1 1,877,165 377,318 2,254,483 10.27 
2007 (semi-definitive figures) 22,409,65 3 1,959,415 386,464 2,345,879 10.47 
2008 (provisional figures) 24,032,489 2,061,756 411,616 2,473,372 10.29 
2009 (provisional figures) 24,119,455 2,076,144 433,815 2,509,959 10.41 
2010 (provisional figures) 24,983,318 2,062,058 442,147 2,504,205 10.02 
Average 22,967,932 1,957,142 396,993 2,372,135 10.28 
Source : BCE Ecuador (compiled by MAGAP). 
330. The economically active population linked to the agricultural sector is currently some 
1.3 million, or 30 per cent of the country's active wo rkforce.  The agriculture, livestock and fisheries 
sector is undoubtedly of vital importance to ec onomic development as it generates agro-production 
and agro-industrial chains of considerable signifi cance in terms of creating jobs and earning foreign 
exchange at the primary and industrial levels. 
331. Ecuador has implemented the following policies through the Ministry of Agriculture, 
Livestock, Aquaculture and Fisheries: 
 Governance and institutional development .  Maintain a highly devolved 
institutional structure that makes for decentralized processes based on stronger Ecuador WT/TPR/G/254 
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  authority;  has a legal framework that ensures supervision and management as well as 
regulatory and control capability;  introduces practices of transparency and accountability and ensures citizen involvement a nd rural organization;  and is flexible 
and technologically advanced, has standardised procedures and promotes the 
development of human talent. 
 Promotion of production and productivity .  Raise agricultural production and 
productivity and ensure sustainability and competitiveness by strengthening and broadening the impact of services in the territories.  Special emphasis is placed on research, the provision of adequate input s and equipment, investment, productive 
innovation and the preservation of knowledge, in accordance with the National Plan 
for Good Living and the territorial agendas. 
 Equitable access to resources .  Assure producers, especially small and 
medium-sized ones, of access to and the protection and improvement of natural resources, such as land and water, by re ducing concentration and fragmentation and 
improving techniques and forms of use. 
 Trade .  Encourage various systems of trade with the participation of small and 
medium-sized producers on an associative b asis and involving storage systems, the 
processing of food and raw materials in order to expand the food supply, and the fair 
treatment of producers and consumers, in  order to cover the domestic and export 
market. 
 Risk prevention and management .  Reduce vulnerability and risk in agricultural 
production by improving the responsiveness of the Ministry of Agriculture, investing in infrastructure, improving impact mitig ation techniques, prot ecting production and 
family livelihoods by means of various syst ems of insurance, and reducing livestock 
losses. 
332. The aforementioned policies are designed to bring about and foster the modernization of the 
Ecuadorian agricultural sector on the basis of compet itiveness, sustainability and fairness, with a view 
to developing production so as to achieve food sovereignty and security  and to boost exports.  They 
also aim to improve the quality of rural life by  strengthening local capacities, raising incomes, 
improving access to productive resources, ensuring fair processing chains and fair trade, as well as to 
guarantee optimal social and economic services fo r the Ecuadorian populatio n and protect natural 
living systems and cultures. 
333. Food sovereignty is a strategic objective consecr ated in the Constitution, the Organic Law on 
the Food Sovereignty Regime (LORSA), the Code  of Production and the National Plan for Good 
Living ( Sumak Kawsay ), which promote access to and the availability of food for the population as a 
whole whilst respecting and protecting agro-bio diversity, traditional and ancestral knowledge and 
forms of production, guided by the principles of equity, solidarity, inclusiveness and social and environmental sustainability. 
334. In pursuit of the proposed objectives, the Minist ry of Agriculture, Livestock, Aquaculture and 
Fisheries (MAGAP) has been implementing emblematic programmes and projects designed 
principally to support small and medium-sized agri cultural and livestock producers.  These include 
the National Inclusive Rural Businesses Progr amme (PRONERI);  Agrarian Revolution 
Schools (ERAs);  the Agricultural and Liv estock Competitiveness and Sustainable Rural WT/TPR/G/254 Trade Policy Review 
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  Development Project (CADERS);  the Land Plan ( Plan Tierras );  Alternative Marketing 
Circuits (CIALCO);  Agricultural and Livestock Insurance (UNISA);  and the Storage Unit (UNA). 
6.2 A GRO-INDUSTRY  
335. In 2006, MAGAP prepared an Integrated Di agnosis of the Agro-Industry, funded by the 
Inter-American Institute for Cooperation on Agricu lture (IICA).  The diagnos is revealed serious 
problems of viability and lack of competitiveness , presumably owing to low productivity at the 
national and international levels.  A National Agro-Industrial Development Plan was therefore drawn 
up.  This Plan was not fully implemented, howev er, and only isolated initiatives, such as MAGAP's 
draft Agro-Industrial Law for Ecuador, came into existence.  Thus, the National Project for the 
Integral Development of Agro-Industrial Chains was se t up on 31 July 2010.  In this context, it should 
be noted that the agro-industry accounted for an av erage share of GDP of 15 per cent in the previous 
five years and generated some 177,000 direct j obs, representing 3.41 per cent of the economically 
active population.  Feasibility studies have identified 27 agricultural products the value chains of 
which needs to be reinforced. 
336. The chief objectives of the Project are the following:  (i) to determine the roles, 
responsibilities, rights and duties of each of the players in the agro-industrial sector by promoting, and 
developing the social nature of, the legal framework set by the Agro-Industry Law;  (ii) to consolidate 
and group the records of the private enterprises and public institutions in the agro-industrial sector so 
as to constitute a National Agro-Industrial Info rmation System, thus making for an efficacious 
decision-making process;  (iii) to identify skills and ca pacities in the agribusiness sectors;  and (iv) to 
boost the development of chains and strengthen the links in those chains.  The budget appropriation 
for the Project is US$20,366,900 for the 2011-2015 period. 
6.3 M ANUFACTURING  
337. The 2008 Constitution set out the guidelines for a development model on the basis of which 
the 2008-2010 National Development Plan was draw n up.  This Plan subsequently became the 
2009-2013 National Plan for Good Living.  The broa d outlines of an agenda for the effective, 
sustainable and equitable development of Ecuador  were thus laid down.  The objectives of the 
National Plan form the framework of the 20 08-2012 Industrial Policy of Ecuador, which was 
developed in conjunction with othe r institutions that will help to achieve those objectives by focusing 
on efforts to attain qualitative and qua ntitative targets in the industrial sector.  Attention is drawn to 
objectives Nos. 6 and 11.28 
338. To pave the way for a coordinated approach , the Agenda for Productive and Territorial 
Transformation was established, star ting with the creation of the Sectoral Council for Production, the 
prioritization of strategic sectors and territories, and the identification of territorial and sectoral 
policies, together with the related strategies, objectives and tools.29  In addition, to further advance the 
development policies, the Organic Code of Prod uction, Trade and Investment was adopted in 
December 2010;  its aims include regulating the prod uction process so as to achieve a better quality of 
                                                      
28 Alignment of the National Plan for Good Living and the Industrial Policy.  Viewed at:  
http://www.micip.gov.ec/images/s tories/politica3idiomas.pdf. 
29 Agenda for Productive Transformation, Ministry for the Coordination of Production, Employment 
and Competitiveness (MCPEC) http://www.mcpec.gob.ec /index.php?option=com_content&view=article&id= 
591&Itemid=68, and Agenda for Productive Territorial Transformation, MCPEC, http://www.mcpec. 
gob.ec/index.php?option=com_content&view=article&id=678:agendas-para-la-transformacion-productiva-territ
orial&catid=1:latest-news&Itemid=96&lang=es. Ecuador WT/TPR/G/254 
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  life and applying productive development tools that  will impact productivity, further transform the 
production matrix and promote quality employment  and balanced, eco-efficient and sustainable 
growth.30  Under this new concept, the State has a lead ing role in the nation's productive development, 
both as a robust and efficient coordinator of polic ies and rules and as an entity responsible for 
controlling possible abuses of dominant market positi ons.  The deliberate skewing of relative prices to 
favour priority sectors is therefore necessary in or der to increase the profitability of, and attract 
greater private investment to, such sectors given th e budgetary constraints on the investment of public 
funds.  Problems of coordination with respect to in formation asymmetry also have to be ironed out to 
close any existing internal gaps and avert possibl e misuse, thereby furthering the development of 
these priority sectors.  The development model unde r consideration is therefore one whereby sectors 
are strengthened not only through selective import substitution, but also by means of a real productivity increase, export diversification, provisi on of services, democratization of the means of 
production, integration into the global ec onomy and access to information technologies. 
339. The Industrial Policy is the frame of refere nce on which the powers of the Ministry of 
Industry and Productivity are based.  It contains nine  specific objectives (including helping to attain 
the goal of food and economic sovereignty), polici es, strategies, programmes and projects.  The 
industrial policy translates into concrete projects in  keeping with 12 strategic priorities regarding:  
(i) increased productivity and systemic competitiveness;  (ii) human capital;  (iii) endeavour and technology transfer;  (iv) physical and knowle dge infrastructure;  (v) domestic and foreign 
investment;  (vi) generation of quality employment;  (vii) the adding of value;  (viii) environmental 
sustainability;  (ix) diversification;  (x) local and territorial development;  (xi) generation of larger 
production chains;  and (xii) strategic integration into the global market. 
340. The objectives embodied in the National Plan for Good Living (PNBV) lay down targets to be 
met.  In the case of industrial policy, in accordan ce with objectives 6 and 11 of the PNBV, targets 
have been set of 5 per cent growth for non-petr oleum industrial GDP between 2009 and 2013 and of 
25 per cent growth in average labour productivity for that same period.  Considering that the 
programmes and projects are ongoing and have medium- to long-term execution time-frames, 
improvements will be able to be gauged at subseque nt stages.  Furthermore, given that most of the 
programmes, projects, incentives, etc. pertain to the strengthening of the priority production sectors, the prime indicator of competitiveness, i.e. be tter product positioning on the local market and a 
resulting reduction in imports, will ha ve to be measured in the internal market.  Once again, this 
indicator can only be validated ex post .  In any case, the data provided relate to the productivity and 
trade balance of the priority sectors since 2005. 
341. Fifteen institutional objectives are set within the functional organizational structure of the 
Ministry of Industry and Productivity (MIPRO), whic h determined this structure on the basis of its 
institutional mission and aims.  In pursuit of its mission, MIPRO has developed a process-based 
organizational structure to enable it to attain the objectives set.  These processes include governance 
processes, value-adding processes, enabling su pport processes, enabling advisory processes and 
decentralized processes.  Value-adding processes are those that generate, administer and control 
products and services intended for external users a nd that enable fulfilment of the specialized 
institutional mission - the raison d'être  - of the Ministry, namely policy design and implementation.  
The entities concerned are the Under-Secretaria t for Industry, Productivity and Technological 
                                                      
30 Code of Production, Official Register  No. 351, Wednesday 29 December 2010.  MCPEC, 
http://www.mcpec.gob.ec/index.php?option=com_ content&view=article &id=16&Itemid=76. WT/TPR/G/254 Trade Policy Review 
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  Innovation, the Under-Secretariat for Trade and I nvestment and the Under-S ecretariat for MSMEs and 
Handicrafts.31 
342. The country is applying a strategy of wealth  accumulation and distribution based on a new 
vision of development, conceived as a dovetailing of the economic, political, socio-cultural and 
environmental systems. 
343. The execution of this strategy is based on an endogenous development model.  In the 
industrial field, the Industrial Policy and the Age nda for Productive Transformation were devised on 
the basis of management models intended to incr ease added value through process evaluations in the 
priority sectors they cover and the implementation of specific programmes relating to quality, 
capacity, innovation, research and devel opment, market access and eco-efficiency, inter alia .  These 
will make for increased productivity and ultim ately strategic import substitution in the 
medium-to-long term, paving the way for exports once the model has been consolidated. 
6.4 T OURISM  
344. Tourism in Ecuador is undergoing innovation both  in its structure and strategic planning, and 
this will form the basis for developing sustainable tourism and positioning it as the country's primary 
production focus that is based on social inclusiven ess, in line with the National Constitution and the 
National Plan for Good Living. 
345. Ecuador plans to develop a sustainable and competitive tourism product by building up 
human, natural and cultural resources and applyi ng technological innovation to infrastructure, 
equipment, facilities and services in order to guarantee a comprehensive tourism experience for 
national and international tourists. 
346. To move ahead with the development of sustainable tourism, the Ministry of Tourism is 
working assiduously to implement the tourism po licies set out in the Agenda for Productive 
Transformation.  These are:  (i) a quality product wi th social inclusiveness;  (ii) the development of 
domestic tourism;  (iii) the strengthening of institutions and cross-sectoral coordination;  
(iv) promotion geared towards specialized demand.  There is also a need to coordinate public, private 
and community endeavours inspired by the prin ciples of poverty reduction, social inclusiveness, 
fairness, sustainability, competitiven ess and decentralized management. 
347. The work of the Ministry of Tourism is guided by two planning tools, namely the Strategic 
Plan for the Development of Sustainable Tour ism in Ecuador by 2020 (PLANDETUR 2020) and the 
Comprehensive Tourism Marketing Pl an of Ecuador (PIMTE 2010-2014). 
348. PLANDETUR 2020, which outlines, organizes and provides guidance for the competitive 
management of sustainable tourism development in Ecuador in all spheres of activity for the benefit 
of its people and to ensure bette r use of resources, is structured around six key issues, namely 
governance of the tourism sector, tourism marketin g and promotion, promotion of investment and 
financial management, crosscutting socio-cultural and environmental management measures, human 
resources training and development, and development of tourism destin ations and tourism facilitation. 
                                                      
31 Organic Statute on Process-Based Organizational Management of the Ministry of Industry and 
Competitiveness (MIC), Official Register  No. 231, 31 December 2007.  MIPRO. 
http://www.mipro.gob.ec/index.php?option=com_ content&view=article&id=1082&Itemid=170. Ecuador WT/TPR/G/254 
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  349. PIMTE 2010-2014 is a marketing management guide that helps to establish objectives, 
policies, strategies, projects and programmes for tourism promotion in Ecuador. 
350. It is crucially important for Ecuador to build  up tourism products with the best attributes, 
taking into account technical criteria such as uniquen ess, intrinsic value, local character, renown, and 
concentration of supply.  Accordingly, the Minist ry of Tourism has 12 product lines, namely culinary 
tourism, retirement tourism, sun and beach touris m, community tourism, cultural tourism, theme 
parks, ecotourism and green tourism, sports and a dventure tourism, medical tourism, agri-tourism, 
business tourism and cruise tourism. 
351. Work is in progress at the Ministry of Tourism on the mapping of tourism investments in 
Ecuador as a tool that will facilitate an objective, effective and coordinated approach to public and 
private investments, thereby helping to develop a tourism product conducive to systemic territorial 
development. 
352. A tourism sector diagnosis carried out in 2005 revealed the low levels of training both of 
industry professionals as well as of immigration service officials and officials of other public services who come into contact with tourists.  Given the im portance of human resource training and learning, 
the National Tourism Training Programme (PNCT) w as officially launched in 2009.  Its main aims 
were to strengthen the tourism sector by means of the transfer of technical know-how, the development of skills and abilities, the involvement of all players in the tourism sector, and the 
improvement of quality standards in the provision  of tourism services.  The programme has the 
following ten components:  quality management and good practices in sustainable tourism;  training 
of trainers;  professional skills;  productive and enterprising young people;  hospitality and food 
security;  community tourism;  specialized and native guides;  young tourists;  productive tourism 
businesses;  and destination management.  Since the inception of the programme, a total of 
11,069 people have been trained at 356 events.  Al together 8,462 children have also been trained 
under Component No. 8, Young Tourists. 
353. The period 2005 to 2010 saw an increase in intern ational arrivals in Ecuador (4.02 per cent), 
as well in foreign currency earnings (10.7 per cent) re corded under the "travel" account in the balance 
of payments prepared by the Central Bank of Ecuador. 
354. The number of tourism establishments register ed with the Ministry of Tourism in 2010 was 
17,778, representing an increase of 6.7 per cent over 2009 and of 31.6 per cent during the period 
2005-2010.  Furthermore, tourism establishment reco rds show that there are 92,828 direct employees, 
of which 51.9 per cent are men and 48.1 per cent women.  The year 2010 saw a 2.97 per cent increase 
in this indicator over 2009, while the in crease for the period 2005-2010 was 28 per cent. 
6.5 S
TRATEGIC SECTORS  
355. The adoption of the new Constitution in 2008 laid the groundwork for a new endogenous 
development model that is bei ng implemented through amendments to laws and regulations and a 
considerable strengthening of  the institutional framework. 
356. The State reserves the right to administer, regul ate, oversee and manage the strategic sectors 
in accordance with the principles of environmental sustainability, foresight, prevention and efficiency. 
357. The strategic sectors falling under the exclusiv e decision-making power and control of the 
State, as stipulated in the Constitution and the law, are those which, by virtue of their importance and 
scale, have a decisive economic, social, political or environmental impact and must be geared towards WT/TPR/G/254 Trade Policy Review 
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  the full development of rights and furtherance of th e social interest.  The sectors considered as 
strategic are energy (all forms), telecommunications , non-renewable natural r esources, transport and 
refining of hydrocarbons, biodiversit y and genetic heritage, the radio- wave spectrum, water, and all 
other sectors determined as such by law. 
358. The building of infrastructure to meet the requirements of Ecuador's 14 million citizens, the 
exploitation of the nation's strategic areas in order to generate resources for the benefit of the entire 
population, as well as the securing of resources for the realization of these and other tasks are imperatives for the Rafael Correa government. 
359. The creation of the Ministry for the Coordination of Strategic Sectors came in response to the 
need to restore State control over the management of  the country's strategic areas and to promote the 
vision of a sovereign nation operati ng with clean and renewable forms of energy, exploiting its natural 
resources in a socially and environmentally sust ainable manner and strengthening its cooperative ties 
with friendly countries by forging new alliances. 
360. The Ministry for the Coordination of Strategic Sectors was set up by Executive Decree 
No. 894, signed by the President of the Republic, Raphael Correa Delgado, on 3 January 2008.  The 
Ministry's mission is to direct the policies and actio ns of the institutions that make up the strategic 
sectors and, through the coordinated, concerte d and efficient implementation of sectoral and 
inter-sectoral plans, programmes and projects, he lp to achieve the fulfilment of the National 
Development Plan, improve the quality of life of th e population and build more efficient institutions. 
Strategic objectives 
(a) To monitor, support and facilitate the mana gement of the bodies making up the Sectoral 
Council for Strategic Sectors with a view to th e execution of the National Development Plan 
and government policies; 
(b) to propose, structure and coordinate inter-s ectoral policies, plans, programmes, projects and 
actions; 
(c) to harmonize the policies, plans, programmes, projects and actions of sectoral entities; 
(d) to put in place the Sectoral Agenda for Stra tegic Sectors to serve as a tool for sectoral 
coordination and consultation a nd form the nexus between th e National Development Plan 
and sectoral policies, as well as to interlink th e activities of the entities being coordinated in 
order to unify efforts, optimize the use of resour ces, share information and raise their levels of 
efficiency, efficacy and impact; 
(e) to interlink ministerial needs and presidential decisions; 
(f) to carry out the management task s assigned by the Executive Branch; 
(g) to devise and implement emblematic inte r-sectoral initiatives and create institutional 
capabilities that enable them to be transfe rred to sectoral bodies within a set time frame; 
(h) to follow up, monitor and evaluate the ma nagement and implementation of sectoral and 
inter-sectoral policies, plans, programmes and projects. Ecuador WT/TPR/G/254 
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  361. A total of US$6,970.33 million was invested in the strategic sectors falling within the purview 
of the Ministry for the Coordination of Strate gic Sectors between 2007 and 2010, representing an 
increase of 3.9 times the amount invested between 2003 and 2006. 
Investment outlook 
362. The National Government has developed an ec onomic model based on sizeable infrastructure 
investments.  Major national projects have been launched that will bring co nsiderable new dynamism 
to the economy by generating jobs, increasi ng the capital stock and savings, and supporting 
production.  These projects include: 
Hydroelectric projects 
363. Major hydroelectric projects are currently under construction, the main ones in terms of 
investment and generating capacity being Coca Codo Sinclair, Toachi-Pilatón and Sopladora.  They 
are mainly intended to increase the electricity supply to the Ecuadorian market, take advantage of the 
country's water resource capabilities and reduce ener gy imports and hence external dependence, as 
well as deliver long-term government savings and transform the energy matrix.  Roughly 
US$3,400 million are being invested in these three projects. 
364. Coca Codo Sinclair lies between the Napo and Su cumbíos provinces and is the biggest power 
generation project with a capacity of 1,500 MW.  It will require an investment of some 
US$2,300 million and should become fully operational in 2016. 
365. Toachi-Pilatón will generate 1,090 GWh annuall y and is a complex comprising two power 
stations that will be linked to the National Intercon nected System (SNI).  The stations are Sarapullo, 
with a generating capacity of 49 MW, and Alluriquí n, with 204 MW.  Toachi-Pilatón will therefore 
supply the country with a total of 253 MW.  The amount being invested in these projects is US$517 million. 
366. Sopladora will take advantage of the hydraulic potential of the River Paute basin in 
Azuay province.  With a capacity of 487 MW, th is power station will contribute 2,800 MWh to the 
National Interconnected System and is expected to be in operation by 2014.  The project will require 
an investment of some US$672 million in civil engi neering works and electro-mechanical equipment. 
367. Moreover, the five hydroelectric power st ations of Mazar-Dud as, Delsitanisagua, 
Minas-San Francisco, Quijos and Chontal will be in corporated into the National Interconnected 
System over the next few years, thereby augmen ting the country's overall power generation capacity. 
Petroleum projects 
368. The Eloy Alfaro Pacific refinery (RDP) is set to become Ecuador's leading refining and 
petrochemicals complex since, in addition to oi l refining, it will generate raw materials for the 
petrochemicals industry.  Investments totalling US$1 1.8 billion are projected to 2015 and the complex 
will be fully operational by 2016. 
Mining projects 
369. The National Government has begun negotiati ng contracts with foreign companies for 
responsible mining exploration and exploitation.  The mining of minerals (gold, silver and copper) 
will be a powerful boost to the economy, with positiv e spin-offs in terms of employment, wealth WT/TPR/G/254 Trade Policy Review 
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  generation and export diversification, inter alia .  These mining projects are being negotiated in an 
endeavour to regulate, and lessen the risks asso ciated with, small-scale mining operations, and 
mitigate the environmental impact on the areas where such activities are conducted. 
370. The large-scale national projects in question are as follows: 
- Río Blanco; 
- Mirador; 
- San Carlos Panantza; 
- Quimsacocha;  and 
- Fruta del Norte. 
Hydrocarbons Economic significance 
371. For the past decade, the contribution of hydr ocarbons (oil and gas) to national GDP has 
averaged 15.7 per cent, with 2010 petr oleum GDP standing at US$9,530 million. 
372. The 2005 output was 531,584 barrels per day, in  2008 it was 504,721, and that figure should 
be maintained in 2011.  Owing to efforts to recove r mature and marginal fields, average output for the 
period 2011 to 2015 is expected to be 528,639 barre ls per day.  The sector is of fundamental 
importance to the national economy, having made an average contribution of 27.2 per cent to the government budget over the past decade. 
373. Petroleum exports have made up an average of  51.7 per cent of the country's overall exports 
and accounted for US$8,951 million in 2010.  At the same time, owing to growing domestic demand 
for derivatives in combination with the limited produ ction capacity of local refineries, the country has 
been obliged to make sizeable imports, whic h were worth US$3,708 million in 2010.  The 
investments now being made in refineri es are intended to reverse this trend. 
374. There are two State enterprises, namely EP PETROECUADOR, and the recently created 
PETROAMAZONAS EP, the latter having taken over operations formerly carried out by private companies that have not renewed their contracts with the government.  The cumulative output of both 
government companies represents 72 per cent of the country's overall output. 
Investment in the sector 
375. Public investment seeks to boost the petroleum sector by increasing the productivity of public 
companies, retrofitting the main State-run refinery and prospecting for gas in the country's coastal 
region.  Public investment in the petroleum sector increased from US$1,036 million between 2004 
and 2006 to US$6,980 million between  2007 and 2011.  Owing to the ch ange in regulations and the 
entry into force of the new contracting syst em, investments by private companies fell from 
US$2,063 million during the 2004-2006 period to US$1,756 million during the 2007-2011 period. Ecuador WT/TPR/G/254 
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  Legal framework 
376. The amendments to the Hydrocarbons Law and the Internal Tax Regime Law were published 
in Official Register  Supplement No. 244 on 27 July 2010 with a view to stimulating the activities of 
the hydrocarbons sector and raising the output of oil fields.  Under the current contracting system for 
service provision, ownership of the entire national output was restored to the State, with contractors 
being granted a rate per barrel of output that does not vary with the price of petroleum. 
377. A new petroleum services contract model w as established in Decem ber 2010 and signed by 
most of the companies.  The new investment comm itments entered into by the 14 private companies 
with which new contracts were signed amounts to US $1,385 million for the duration of the contracts. 
378. The new Law ushered in fresh institutional arrangements whereby the Ministry of 
Non-Renewable Natural Resources (MRNN) was inv ested with overall responsibility for policy and 
designated bodies and government companies were also brought on board.  In addition to the 
two government companies mentioned earlier,  the designated bodies are the Hydrocarbons 
Secretariat, which is charged with managing hy drocarbon resources and petroleum zones and with 
signing, administering and modifying petroleum contracts, and the Agency for Hydrocarbons 
Regulation and Control, which is responsible for regulating, overseeing and inspecting technical and 
operational activities in the various stages of the industry. 
Mining 
Economic significance 
379. The contribution of the mining sector to GDP fluctuated minimally (1.20 per cent-1.30 per 
cent) between 1999 and 2009, showing a slight increase in 2010 (1.43 per cent).  Mining GDP 
comprises two categories:  "production of non-metall ic mineral products", wh ich contributed 0.93 per 
cent to mining GDP in 2010, and "other mining products", which accounted for 0.51 per cent of 
mining GDP in 2010. 
380. A nationwide small-scale mining census conducted in March 2010 revealed that there were 
8,428 workers in the country's mining areas. 
381. The mining sector showed a trade deficit for the years 2003 and 2004, whilst exports 
outstripped imports in 2005.  In 2009, exports of products derived from mines and quarries (not 
including petroleum) accounted for 0.45 per cent of total goods exports. 
Legal framework 
382. A new Mining Law was published in Official Register  No. 517 on 29 January 2009.  It 
established a new framework and policy for the sector  under the responsibility of the line ministry, the 
Ministry of Non-Renewable Natural Resources.  Pu rsuant to Article 315 of the Constitution, the 
National Mining Company (ENAMI EP) was created by an Executive Decree dated 31 December 2009 and published in Official Register  No. 108 of 14 January 2010.  Its purpose is to 
manage mining activities in the strategic non-renewa ble natural resources sector with a view to 
sustainable exploitation in keeping with the Mining La w, and it will play a role in all phases of those 
activities in a manner that ensures environmental protection and observance of the rights of the 
population.  The current legal framework lays out  clear rules for the State and for companies. WT/TPR/G/254 Trade Policy Review 
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  Telecommunications 
383. The telecommunications sector has expanded cons iderably in recent years and that trend 
looks set to continue. 
Statistics for Ecuador's Telecommunications Sector 
Service Indicator 2006 2007 2008 2009 2010 
Fixed-line telephony Total number of lines 1,768,049 1,819,760 1,906,382 2,011,213 2,060,822 
 Penetration rate (%) 13.19 13.38 13.81 14.36 14.40 
Mobile telephony Total number of lines 8,485,050 9,923,622 11,692,248 13,454,600 15,105,420 
 Penetration rate (%) 63.3 72.9 84.7 96.1 106.3 
Internet Total number of lines 823,483 1,151,906 1,309,605 2,052,147 3,002,914 
 Penetration rate (%) 6.14 8.47 9.49 14.65 21.14 
Broadband  Total number of lines 256,227 332,890 970,184 1,595,465 2,706,217 
 Penetration rate (%) 1.91 2.25 7.03 11.39 18.91 
 
384. Under the 2008 Constitution, telecommunications  were classified amongst the country's 
strategic sectors.  With a view to strengtheni ng the development of this sector, Executive Decree 
No. 8 of 13 August 2009 therefore set up the Minist ry of Telecommunications and the Information 
Society. 
385. This Ministry's mission is to oversee the development of information and communication 
technologies, including telecommunications and the radio-wave spectrum.  It issues policies and master plans and monitors and evaluates their implementation, coordinates support and advisory 
activities to guarantee equal access to services and prom otes their effective, efficient use in a manner 
that ensures progress towards an information so ciety and hence an improved quality of life for 
Ecuadorians.  The Ministry also represents the Stat e in matters pertaining to the information society 
and information and communication technologies. 
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