Import restrictions may be in jeopardy as trading partners demand changes
Six months after it imposed trade restrictions on 292 products, Ecuador’s Ministry of Industries says imports have been reduced by 29%. Government officials and a number of economists say, however, that it is unlikely that the restrictions, which come in the form of tough “quality control” standards, will continue to show similar results.
A new free trade agreement with the European Union as well as complaints from neighboring countries appear almost certain to force the government to eliminate or reduce many of the product requirements.
On Wednesday, the Community of Andean Nations (CAN) ordered Ecuador to eliminate most of the requirements, saying they violate trade agreements with Colombia, Peru and Bolivia.
CAN had first ordered the trade restrictions removed in June but gave Ecuador six weeks to respond. The response, according to CAN, did not provide a suitable explanation for raising import duties.
Ecuador continues to insist that it reserves the right to determine if imports are safe for consumers. CAN, however, says the quality control standards have little to do with protecting the public and more to do with reducing imports.
When the quality control standards were first introduced at the beginning of the year, Ecuador officials, including President Rafael Correa, admitted that they were intended to protect local industry, reduce imports and improve the country’s balance of trade.
Most of the 29% reduction in imports came in the first four months after restrictions were imposed. Since April, the industries ministry has taken 90 of the original 292 products off the list requiring safety testing.