Permanent Mission of the European Union to
the World Trade Organization (WTO)

 

EU Statement at the Trade Policy Review of Ecuador, 5 March 2019

Geneva, 05/03/2019 - 00:00, UNIQUE ID: 190305_6
Local Statements

<p>On behalf of the European Union I would like to welcome the Delegation from Ecuador, led by H.E. Vice-Minister Diego Caicedo, acknowledge the work of Ambassador H.E Ambassador Aulestia and his team for the work in Geneva, and thank the Discussant, H.E. Mr. Eduardo Sperisen-Yurt, for his introductory words.</p>

Ecuador’s 3rd Trade Policy Review since it joined the WTO in 1996 gives us an opportunity to take stock of the developments in Ecuador’s trade policies and practices since 2011. In these 8 years, we have seen several positive developments, and we are convinced that a prosperous and open Ecuador can only serve to the benefit of its region and the global community.

Mr Chairman, the EU would like to start by highlighting some of the major positive developments that we have seen during the review period.

First of all, we commend Ecuador´s efforts to address macroeconomic imbalances while protecting social expenditures during the review period, which has resulted in declining poverty rates in Ecuador.  However, we recognise that Ecuador keeps facing important challenges in its economic situation. We therefore encourage it to swiftly implement the announced economic reforms, in particular the recently approved Law on the Development of Production of 2018, as well as other measures aimed at containing the fiscal deficit.

We are also encouraged by Ecuador’s increasing openness to international trade. This includes the major step of concluding an agreement with the EU and thereby acceding to what is now the EU Colombia/Ecuador/Peru Trade Agreement. We also welcome the conclusion of a trade agreement with the European Free Trade Association (EFTA), and more recently a request by Ecuador to become an associate state of the Pacific Alliance.

We commend Ecuador for its positive engagement with the WTO, and its firm support to the multilateral trading system, including the joint initiatives on trade and gender and MSMEs. We were glad to see that Ecuador has become the latest country to ratify the Trade Facilitation Agreement in January 2019 and encourage to proceed to implement it timely.

During the period under review, there have been major changes to the legal framework governing EU-Ecuador trade relations. As I referred to before, Ecuador has joined our Trade Agreement with Colombia and Peru on 1 January 2017. The Secretariat’s Report recognises that the EU has become a more important trade partner of Ecuador on both the import and export side. In fact, the implementation of the Trade Agreement with the EU since January 2017 has produced encouraging results.

To give two examples, bilateral trade between the EU and Ecuador has increased by 20% after the first year of implementation of the Trade Agreement, reaching 5.32 billion euros compared to 4.4 billion euros in 2016. In 2017, Ecuador’s exports to the EU increased by 12% while EU exports to Ecuador increased by more than 30%.  Ecuador has also addressed a number of bilateral trade irritants raised by the EU under the institutional bodies established by the Agreement.

We are equally pleased to see a positive start to the implementation of the Trade and Sustainable Development chapter of the Agreement. The EU looks forward to continuing its close cooperation with Ecuador in the further implementation of the Agreement. This will bring benefits on business, consumers and civil society in general for both sides.

Mr. Chairman, as highlighted by a number of detailed questions that the EU submitted for the purposes of Ecuador’s TPR, there are also some areas where we believe there is scope for improvement, or where we believe Ecuador should pay special attention.

First, and as a general remark, we believe that there is still considerable scope for the improvement of Ecuador’s business environment. We note that Ecuador has regressed in several classifications that relate to business climate, such as the Global Competitiveness index, or the “Ease of doing business” index. In that regard, we would refer to examples such as the comparatively high cost to start a business, or the absence of a bankruptcy law. We are convinced that renewed efforts in these areas would be beneficial to increase Ecuador’s competitiveness. Also, as Ecuador is seeking to attract higher levels of foreign direct investment, it is important to ensure a predictable and transparent business environment, which improves the investment climate and makes it easier to invest in Ecuador.

Secondly, a number of unjustified barriers or trade irritants would need to be addressed. As examples, I would point out two market barriers that the EU is particularly concerned about:

  • We have specific concerns with regard to discriminatory measures applicable in the spirits sector. The situation is that imported spirits are subject to the cost of a fiscal stamp on their bottles, while Ecuador exempts domestically produced spirits from any such cost.
  • EU operators also continue facing burdensome procedures for their exports of agricultural products. These include cumbersome tariff-quota management, long processes for the granting of import licenses, with some refusals being made on the grounds of the existence of national production.

In these two instances, we believe it is important for Ecuador to align itself with the best international trade practices.

Despite these specific trade issues, the EU would like to underline that we are making this statement in a highly positive and constructive tone. Overall, we salute the direction Ecuador and its current Government is taking in its trade policy, and we are equally positive about where our bilateral trade relationship is heading. We thus encourage Ecuador to continue on this path, and are looking forward to our future cooperation.

On behalf of the EU, I look forward to a constructive exchange of views during this review and I wish the delegation of Ecuador “mucho éxito” during its 3rd TPR.

 

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