Statement as delivered by Ambassador Dennis Shea
Deputy U.S. Trade Representative and U.S. Permanent Representative to the World Trade Organization
World Trade Organization
Geneva, March 5, 2019
Thank you, Chair. The United States is pleased to welcome Vice Minister Caicedo, and the other members of the Ecuadorian delegation to the Trade Policy Review of Ecuador. We also wish to thank Ambassador Diego Aulestia for his service as Chair over this past year in the Committee on Trade and Development.
Much has changed in Ecuador since its last TPR in November 2011, and the United States commends Ecuador for all that it has since achieved. Important steps have been taken by the government of Ecuador to integrate its economy into the global trading system. As the Secretariat report notes, regional integration continues with Latin American and Caribbean countries through the Andean Community and the Latin American Integration Association, as well as through agreements with Guatemala, Nicaragua, and El Salvador.
As Ecuador’s number one trading partner, the United States has a growing commercial relationship with Ecuador. In 2017, total trade between the two counties was approximately $11.2 billion. The United States had a goods trade deficit with Ecuador of $1.6 billion in 2017, a 16 percent decrease over 2016. U.S. goods exports to Ecuador were $4.8 billion, up 15 percent from the previous year. Corresponding U.S. imports from Ecuador were $6.4 billion, up 5.3 percent.
Since 2017, there have been notable policy improvements and we applaud the use of macroeconomic policy to address structural imbalances in order to improve economic sustainability and advance development. The National Development Plan of 2017 through 2021 identifies a broad set of policies for reaching those objectives. Similarly, the 2018 Law on the Development of Production contains marked improvements in the fiscal policy framework and efforts to increase fiscal transparency.
While an overdependence on oil export revenues has been a persistent concern in Ecuador, as it causes the economy to be vulnerable to future external shocks, there has been a notable decline in the oil sector’s share of GDP during the period under review. In 2011, the oil sector’s share of GDP was 13.2 percent, and by 2017, it had declined to barely 4.8 percent. There was also notable growth in the share of services, which increased by several percentage points between 2011 and 2017. Like others, we appreciate that Ecuador took steps to phase out the trade measures it had in place using balance of payments justifications. Further, it is commendable that Ecuadorian authorities have been able to strengthen fiscal institutions and work to re-establish a competitive private-sector driven economy.
We do have some specific concerns in this review. Since 2013, Ecuador’s Committee of Foreign Trade and the Ministry of Agriculture and Livestock have imposed a mandatory and cumbersome process for allocating import licenses for a number of agricultural products. The Ministry of Agriculture and Livestock does not grant import licenses automatically but rather issues them based on the level of domestic production relative to demand and reviews importers’ yearly import requirements. The United States would like greater clarity on how this Ministry determines whether to allocate import quotas.
The Secretariat’s Report notes that Ecuador’s MFN tariff has 42 rates ranging from 0 to 85.5 percent, including the tariffs resulting from the application of the price band system but excluding the estimated ad valorem equivalents or AVEs. It further notes that when estimated AVEs are included, products subject to a rate over 45 percent include clothing and other textile articles, which carry tariffs of up to 422.2 percent. We would like greater clarity on the specific and compound tariff rates that result in exceptionally high ad valoremequivalent tariff rates for textiles and apparel that exceed Ecuador’s tariff bindings, and we urge Ecuador to consult with other Members and the WTO Secretariat to bring its AVEs in line with its WTO commitments.
Ecuador has made good progress on intellectual property rights issues in the past year. We thank Ecuador for sharing draft regulations of the new Code of Knowledge and for participating in technical discussions with U.S. government experts. We have specific questions on the implementing regulations of the Code of Knowledge, implementation plans for the Marrakesh Treaty, how regulations for compulsory licenses under the Code of Knowledge are consistent with TRIPS standards, how Ecuadorian law addresses geographical indications, regulations for voluntary copyright registration, and enforcement of intellectual property rights.
The United States appreciates the opportunity to engage in this dialogue. We are committed to continue our growing trade and economic engagement with Ecuador and support, wholeheartedly, Ecuador’s progress along the path of global economic integration.
Thank you Chair.