In view of Ecuador's “unfavourable economic climate” which worsened following the earthquake in April, the government extended for another year the phasing out of its import surcharge, from June 2016 to June 2017. According to the new timeframe, the surcharge rates will be reduced by one-third by April 2017, with a complete phase-out by June 2017. Ecuador notified the extension of this measure to the WTO in May 2016.

Since 11 March 2015, Ecuador has been applying various surcharge rates for different products to restore equilibrium to its balance of payments. The different rates cover about 30 per cent of imports and can be found here. Ecuador started phasing out the surcharge on 31 January, lowering the highest rate from 45 per cent to 40 per cent.

Ecuador said the extension of this measure was due to:

• the earthquake's negative impact on tourism and on Ecuador's exports (including tuna, coffee and shrimp)
• the appreciation of the US dollar – Ecuador's currency - which is rendering its exports less competitive
• the decrease in Ecuador's international monetary reserves, and
• the fall in international market prices for oil and other commodities, another important source of revenue for Ecuador.

WTO members remain divided on whether Ecuador's measures comply with WTO rules¹ and several called for consultations to continue. While all expressed solidarity with the people of Ecuador who have experienced the "worst natural disaster in 70 years", several urged the country to dismantle this trade measure as soon as possible and to adopt less trade-restrictive measures. They reiterated concerns about whether the measure could be economically justified. However, some members said that Ecuador's measures fully comply with WTO provisions. Read previous concerns here.

Read the reports on the previous consultations between Ecuador and WTO members:

https://www.wto.org/english/news_e/news15_e/bop_16oct15_e.htm

https://www.wto.org/english/news_e/news16_e/bop_17feb16_e.htm

https://www.wto.org/english/news_e/news15_e/bop_29jun15_e.htm

Next steps

As per requests by WTO members, the Committee on Balance-of-Payments Restrictions is scheduled to resume its consultations with Ecuador in the coming months.

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