Ecuador exporters warn increased duties could derail FTA
Dow Jones Newswires | 26 October 2007
Ecuador Exporters Warn Increased Duties Could Derail FTA
By Mercedes Alvaro, Dow Jones Newswires
QUITO -(Dow Jones)- Ecuador’s Federation of Exporters warned Friday that the country’s recent increases in import duties will negatively affect negotiations on a free trade agreement between Andean countries and the European Union.
The new duties are permitted under World Trade Organization rules, but Ecuador is raising duties while neighboring Colombia and Peru are cutting them, the federation’s executive director, Alvaro Maldonado, told Dow Jones Newswires.
Since the E.U. has said it will negotiate an FTA with the Andean countries as a block, not with individual countries, Ecuador could derail the regional FTA, said Maldonado. "We are boycotting ourselves," he said.
Ecuador’s Council of Foreign Trade and Investments, or Comexi, on Wednesday raised or levied import duties on 567 products, including wireless telephones, home appliances, shoes and textiles.
Comexi is set to increase or levy duties on 262 additional products next week. The duties most likely will affect products imported from China, the E.U., Panama and the U.S.
Government officials say that the increases have been offset by the reduction or cancelation of import duties on 1,957 products earlier this month, which was aimed at promoting local development and competitiveness.
According to the Central Bank, between January and August Ecuador imported about $194 million worth of cellphones from the U.S., $24 million of Panamenian television sets, $18 million of Chinese TV sets and $11.2 million of Chinese shoes. Total imports for the period amounted to $8 billion, compared with imports of $11 billion for all of last year.
Several trade associations are lobbying the government to review its decision to raise import duties, arguing that instead of promoting local production the move could encourage smuggling and contribute to an increase in inflation.
Comexi’s has 11 members, six from the government and five from the private sector, which prevented the business members from stopping the measure.
