Although the World Trade Organization (WTO) says it understands why Ecuador imposed import tariffs of as much as 45% in January, it signaled that it is concerned about the affect the higher fees have on consumers and international trade.
On Tuesday, the WTO ordered Ecuador to reduce the highest tariff’s from 45% to 40% and said it would reexamine the tariff structure in February. The tariffs affect more than 2,900 imported goods.
Ecuador’s trade ministry had argued that the collapse of oil prices and a strong U.S. dollar had forced it to impose the tariffs in an effort to protect local businesses and to keep money in the country. The tariffs were imposed in January.
At a October 16, 2015 meeting, some members of the WTO Trade Committee supported the tariffs but at least of the members opposed them. Unable to reach a consensus, the committee voted to allow the tariffs to remain in effect, with the 5% reduction, but said they wanted more time to examine the issue.
Several of Ecuador’s trading partners, including Colombia and Peru, have protested the tariffs, claiming they damage the balance of trade.
A representative of the International Monetary Fund (IMF) who serves on the committee acknowledges that the country faces touch economic choices due to falling oil prices and a strong dollar, which the country uses as its official currency.
Ecuador’s Minister of Foreign Trade, Diego Aulestia, told the WTO that the tariffs would be discontinued on schedule, in June, 2016.