Concluding remarks by the Chairperson

1. The second Trade Policy Review of Ecuador has given us a much better understanding of recent developments in its trade and trade-related policies and practices together with the challenges it faces. We are grateful for the active participation and the prompt response of the Ecuadorian delegation headed by H.E. Mr Francisco Rivadeneira, Vice-Minister of Foreign Trade and Economic Integration at the Ministry of Foreign Affairs and Economic Integration. I would also like to thank the discussant, H.E. Ambassador Luis Manuel Piantini Munnigh of the Dominican Republic, and the members of the TPRB for contributing to our fruitful exchange of views. Ecuador's detailed responses to the many questions posed by Members are also appreciated.

2. Members commended Ecuador for weathering well the global economic downturn, while without adopting trade protectionist measures other than those taken in 2009 for balance-of-payments purposes on a temporary basis. They recognized Ecuador's achievements in the areas of human development and income inequality as well as the benefits and policy constraints relating to its dollarized monetary regime. Members noted that Ecuador's dependence on oil revenue and expatriates' remittances left its economy more vulnerable to external shocks.

3. Members also noted the changes brought by constitutional and legislative developments since 2008 in several areas, including those in strategic sectors, which some felt had created elements of uncertainty for domestic and foreign investors. Some acknowledged the improvements brought recently to the FDI regime, though they were concerned at the steps to terminate bilateral investment protection agreements, and questioned whether national legislation could provide the same assurances as an international treaty. Members acknowledged the efforts Ecuador has recently made to improve productivity and international competitiveness, although some concerns were expressed about using trade policies for selective import substitution and to support investment in value adding activities.

4. Members acknowledged Ecuador's constructive participation in the WTO and Doha Round activities. They welcomed the transparency improvements that had been made and encouraged further progress in certain WTO notification areas. In that connection, we take note of Ecuador's request for consolidation of the relevant WTO technical assistance.

5. Some Members welcomed the reduction of average MFN applied tariff rates since the last TPR while others noted the relatively wide gap between the average bound and applied MFN tariff rates as well as the increase of average MFN tariff levels for agricultural products. Several Members commended Ecuador for its trade facilitation achievements and expressed their satisfaction with developments in government procurement and competition legislation. More information was sought from Ecuador about the latest requirements in six areas: (1) import licensing; (2) sanitary and phytosanitary standards and measures; (3) export measures; (4) energy-related subsidies; (5) prices policy; and (6) GATS commitments. Remarks were also made on the impact of IVA and ICE tax rates on imports of certain items as well as the possible effect of the foreign exchange flight tax on production costs. Some Members noted improvements in IPR protection in Ecuador and raised questions relating to its scope and enforcement.

6. From a close examination of the Vice-Minister's statements and observations made by delegations during this Review, it appears to me that this TPR of Ecuador should encourage the authorities to press ahead with their reforms and consider taking further action or introducing improvements in certain (five) areas:

(1) Productivity: Members urged Ecuador to improve its productivity and thereby its competitiveness, and to view more open trade policies as a potentially valuable tool in this regard.

(2) Export diversification: Members urged Ecuador to step up its efforts to diversify its exports and seek new markets.

(3) Business environment: Members encouraged Ecuador to proceed with its structural and regulatory reforms in order to further improve its business and investment environment.

(4) Compound duties: Several Members reiterated their request for submission of ad valorem equivalents (AVEs) of compound duties and observance of binding levels.

(5) Standards: Ecuador was encouraged to increase the proportion of its national standards that are based on international standards.

7. In conclusion, I believe that this Review has given us a comprehensive update on Ecuador's foreign trade regime. Ecuador has been encouraged to adhere more closely to WTO rules with a view to enhancing the stability, predictability and transparency of its trade regime. I recommend that Members support Ecuador in its continuing efforts by providing further market access to its goods and services and by responding to Ecuador's needs for technical assistance and expertise.