Observaciones formuladas por el Presidente a modo de conclusión

This third Trade Policy Review has allowed us to deepen our understanding of Ecuador's trade and investment policies, in particular in regard to the reforms and changes introduced since the last Review in 2011. I would like to thank the Ecuadorian delegation headed by Mr. Diego Caicedo, Vice‑Minister of Foreign Trade, for its engagement throughout this exercise. I would also like to thank our discussant, Ambassador Eduardo Sperisen-Yurt, Permanent Representative of Guatemala to the WTO, for his remarks, which set an important basis for this Review, as well as the 32 delegations which took the floor on the first day.

Ecuador was praised for restoring macroeconomic stability in the aftermath of the balance of payments crisis which occurred during the review period. It was noted that GDP had grown at an average annual rate of 3% between 2011 and 2017, leading to an increase in per capita GDP and a decrease in poverty. However, the fiscal deficit had not declined as planned and the public debt had increased; some Members were of the view that servicing the accumulated debt could be costly. While noting that dollarization had served the economy well, it had also limited Ecuador's policy options and increased its dependency on exports and inflows of capital. Observing that foreign direct investment, a traditional source of financing in Ecuador, had declined since 2014, Members urged Ecuador to further open its economy to foreign investment by enhancing the predictability and transparency of its policies. In this context, Members enquired about Ecuador's decision to rescind bilateral investment protection agreements and encouraged Ecuador to take the necessary steps to provide an appropriate framework for the resolution of disputes.

Members observed that Ecuador remains highly dependent on oil exports, which renders the economy vulnerable to commodity price fluctuations in world markets. In this respect, Members urged Ecuador to continue its efforts towards diversification to reduce its vulnerability to external shocks. Ecuador's economy had been severely affected by the decline in oil prices in 2014‑2015, which had led to an increase in the current account deficit and a sharp decline in reserves. To deal with the crisis, among other measures, between 2015-2017 Ecuador had adopted a balance‑of‑payments safeguard in the form of tariff surcharges, affecting some 40% of its tariff lines. Members appreciated Ecuador's steps to phase out this trade measure. Nevertheless, some Members noted that their bilateral trade had been affected by this measure and considered it to be Ecuador's most noticeable trade policy issue during the review period. Overall, Members urged Ecuador to adopt the appropriate policies to deal with challenging economic situations, so that in the future there is no need to resort to the use of similar import restrictive measures. In this respect, they welcomed the significant decline of oil in the share of exports in recent years and the increase in the share of exports of agricultural and fish products, and urged Ecuador to continue in this path.

Members appreciated Ecuador's participation in the multilateral trading system, and took note that the development dimension was crucial for Ecuador. Members welcomed Ecuador's continuous efforts to submit notifications to the WTO and its contribution to the negotiations on fisheries subsidies. It was also noted that Ecuador was a signatory to some of the MC11 initiatives. At the same time, they encouraged Ecuador to consider making further commitments to the WTO Agreements. In this regard, several Members encouraged Ecuador to join or to, at least, become an observer to the Government Procurement Agreement (GPA). This could help Ecuador to reduce its fiscal deficit, enhance transparency in public expenditure, and reduce discretionality.

During the review period, Ecuador had also actively pursued further regional integration, and had concluded an agreement with the EU (the EU Colombia/Ecuador/Peru) and the EFTA countries.

Members congratulated Ecuador for its recent ratification of the Trade Facilitation Agreement. They acknowledged that since the last Review, Ecuador had adopted a number of measures to facilitate trade, such as the implementation of an electronic customs system, a single window for foreign trade and a risk management system, as well as the introduction of an Authorized Economic Operator scheme. However, some Members noted that Ecuador still used many pre-import control documents, including registration of importers, prior import permits and authorizations, and non‑automatic licensing. Ecuador was encouraged to consider simplifying such requirements and increase efforts towards regulatory transparency, in order to reduce trade costs.

Some Members observed that tariffs were used as an instrument to promote industrial policy, and could be modified as required. In this respect, Members noted that, in addition to the balance‑of‑payments safeguard surcharge, the general level of tariffs had also increased during the review period. Members also expressed concern about the predictability of the Andean Price Band Mechanism and urged Ecuador to supply ad valorem equivalents. Some Members noted that applied tariff rates for some tariff lines appeared to exceed bound rates and called on Ecuador to bring its tariffs into conformity with its WTO commitments.

Members noted the importance of developing a solid foundation to effectively protect IPRs in Ecuador. In this regard, Members appreciated the significant changes in the legal framework and expected a swift transition to it. Members had specific questions regarding the implementation of the new legal framework, on compulsory licensing, and enforcement of intellectual property rights.

Members remarked that imports of agricultural products faced higher tariffs than imports of non‑agricultural products. Concerns were expressed regarding some sanitary and phytosanitary requirements, which could become a barrier to trade. Some Members noted that there were burdensome procedures affecting their exports of agricultural products, including cumbersome tariff‑quota management and long processes for the granting of import licences, in certain instances linked to the availability of domestic production. In addition, Members mentioned that Ecuador intervened in the marketing and pricing of certain agricultural commodities. In general, Members encouraged Ecuador to increase the transparency of its trade-related agricultural policies.

Ecuador has received around 220 advance written questions, and has provided answers to almost all of them. This TPR will be successfully concluded once Ecuador has replied to all outstanding questions that emerged during the meeting in a month's time. I believe Members felt that Ecuador is well placed to continue opening its markets and pursuing transparent and non-discriminatory policies by observing its commitments to the WTO, to address the remaining challenges. I hope that the discussion held during this Review will prove useful to Ecuador in the continued implementation of economic and trade reforms to help attract the needed foreign investment and assist in the process of integrating the Ecuadorian economy into the global value chains.