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UNCLAS QUITO 000098 
 
SENSITIVE 
SIPDIS 
 
USTR for Bennett Harman 
USDOC 4332/MGAISFORD 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EFIN EC
SUBJECT: ECUADOR MODIFIES TRADE MEASURES 
 
REFTEL A: State 6737 
       B: Quito 60 
       C: 08 Quito 1178 
 
¶1.  (U) Summary:  On January 27 and January 30, the GOE modified its 
balance of payment (BOP) safeguard measures and standards conformity 
procedures, in response to importer concerns.  The safeguard 
measures will not be applied to products in transit before the 
measure went into effect on January 22; several additions and 
deletions were also made to the list of products subject to 
safeguard.  Ecuador also modified standards conformity procedures, 
allowing more flexibility for a 180-day period.  End Summary. 
 
¶2.  (U) On January 30, Ecuador's trade policy body COMEXI issued 
Resolution 468, slightly modifying Resolution 466 which implemented 
a series of restrictions under a BOP safeguard measure (ref B). 
Resolution 468 establishes that the new trade measures will not 
apply to products that were in transit before the initial BOP trade 
measures were issued.  A few products were removed from the list of 
products subject to BOP safeguard measures, including specialty 
medicated baby formula, tomato paste, certain juice concentrate and 
certain plastic products (flip top plastic lids, for example).  The 
new resolution also adds several new products to the BOP measure. 
Notably, courier packets with a value of between $400 and $2000, or 
a weight of between and 4 and 50 kilograms will pay a 35% tariff, as 
will passenger luggage not exempt from tribute.  Certain couriered 
clothing will now be required to pay a specific tariff of $12 per 
kilogram.  (The resolutions can be found on COMEXI's website at: 
http://www.comexi.gov.ec/resoluciones2009.sht ml.) 
 
STANDARDS REQUIREMENTS MODIFIED 
------------------------------- 
 
¶3.  (U) Ecuador's Quality Council (CONCAL) issued Resolution 7 on 
January 27, modifying requirements for standards conformity that 
were implemented in December 2008.  The initial requirements imposed 
tighter requirements for companies to certify that their products 
complied with Ecuador's safety and quality standards and did not 
provide a phase-in period (ref C). In response to the initial 
measures, Post made the points contained in reftel A. 
 
¶4.  (SBU) Resolution 7 modifies the procedures for obtaining the 
mandatory "Inen 1" quality certificate, allowing more flexibility in 
how conformity is confirmed.  Felipe Urresta, Director of the 
Ecuadorian Standards Institute (INEN), clarified the new standards 
requirements for Post's commercial office.  He explained that a key 
component of the new resolution is that it allows importers to go 
back to providing a self-declaration of conformity with Ecuadorian 
standards, if a company is ISO 9001 certified.  The company must 
also provide proof of ISO 9001 certification by an accredited 
organization.  Beginning March 15, companies must also provide their 
conformity evaluation records (lab tests).  Companies can use valid 
"Inen 1" certificates issued before the new requirements were issued 
in December.  Urresta clarified that although new certificates would 
be needed for each shipment, companies would not necessarily need to 
submit all of their supporting documentation each time.  The 
certificates are to be processed in three working days.  The 
provisions of Resolution 7 will be in effect until CONCAL issues new 
procedures in 180 days. 
 
¶5.  (SBU) U.S. companies have told Post that they are pleased the 
self-certification option is once again available and will make use 
of this option.  However, they are concerned about potential delays 
in the certification process and that the process may change again 
in 180 days. 
 
Comment 
------- 
 
¶6.  (SBU) Both the certification and BOP safeguard measures were 
quickly implemented because of Ecuador's balance of payments 
pressures.  Ecuadorian officials were surprisingly frank that the 
certification measure was done in part because of the BOP pressure, 
although they quickly added that the GOE had previously been lax in 
enforcing its standards.  With the safeguards measure in place, they 
have revisited the certification requirements, providing more 
flexibility as they consider longer-term certification requirements. 
 We will urge Ecuadorian authorities to take industry views into 
consideration as they draft the new requirements, and provide an 
appropriate degree of flexibility and transition. 
¶7.  (SBU) Unlike the now-replaced December certification 
requirement, at least parts of the Ecuadorian business sector had an 
opportunity to comment on and modify the safeguard measure.  Even 
so, government authorities have indicated a willingness to modify 
further the measure, provided its broad intent of restricting trade 
remains intact.  The January 30 resolution is part of that process. 
Based on official comments, we expect that the GOE will also look to 
accommodate certain company-specific concerns, and we are urging 
U.S. companies to make those concerns known to the GOE. 
 
HODGES