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### Viewing cable 09QUITO98, ECUADOR MODIFIES TRADE MEASURES

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09QUITO98 | 2009-02-06 21:39 | 2011-05-02 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Quito

`

    VZCZCXYZ0023
    RR RUEHWEB

    DE RUEHQT #0098/01 0372139
    ZNR UUUUU ZZH
    R 062139Z FEB 09
    FM AMEMBASSY QUITO
    TO RUEHC/SECSTATE WASHDC 9999
    INFO RUEHBO/AMEMBASSY BOGOTA 7947
    RUEHCV/AMEMBASSY CARACAS 3370
    RUEHLP/AMEMBASSY LA PAZ FEB LIMA 3013
    RUEHGL/AMCONSUL GUAYAQUIL 4079
    RUEATRS/DEPT OF TREASURY WASHDC
    RUCPDOC/DEPT OF COMMERCE WASHDC
    RUEHRC/USDA FAS WASHDC 0626

` `

    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

`