Ecuador must eliminate 90% of tariffs with Mexico

Ecuadornews:

Thenational government hopes that between January and February of next yearnegotiations with the Pacific Alliance will start, so that the bloc considersaccepting Ecuador as an associated State.

One of the first steps that the country must take is to eliminate tariffs “in at least 90% of the trade with Mexico,” said Javier Latorre Vaca, coordinator of the Latin American Economic Integration of the Ministry of Foreign Trade. With the other three members of the bloc, which are Colombia, Peru and Chile, trade is already taxed to that extent. “There is an agreement of the World Trade Organization, which says that it must be at least 90%, although the custom is usually to reduce tariffs between 94 and 96%, which can be measured in number of tariff items or total trade covered, “he said.

In theframework of the conference Freedom of Trade: Ecuador in the Pacific Alliance -organized last Tuesday by the San Francisco de Quito University – the officialadded that Ecuador should reduce non-tariff barriers, including technicalregulations. “A technical regulation will not be issued until all thoseissued are reviewed.

That is part of the process of rationalizing the measures, “said the official. Although dates have not been specified to begin this process of eliminating barriers, the Government expects that negotiations with the Pacific Alliance will take between 12 and 18 months. That is the time that has been estimated in the negotiation that the bloc is already carrying out with four other countries, which requested to be associated States before Ecuador.

Roberto Canseco, business manager of the Embassy of Mexico in Ecuador, stressed that the Aztec nation is interested in the country being part of the Alliance, to enhance the level of investment and trade. “One of the important products of Ecuador is shrimp, which we also produce.

Therefore we must find solutions in the sense of quality, price, availability or seasonality, “he said. He added that because Mexico was focused on the renegotiation of NAFTA with Canada and the United States, it has not been possible to advance with Ecuador in the talks for a more complete trade agreement.

Patricio Alarcón, president of the Ecuadorian Business Committee (CEE), said that it is beneficial for the country to be part of the bloc, because trade opening translates into greater exports. However, there are sensitive sectors in which the spokesperson considered that considerations should be taken in relation to the times in which the elimination of tariffs is negotiated.

One of those sectors is the automotive. “An agreement with the Alliance is negative for the country, because there will be more foreign exchange and it will affect the economy,” said David Molina, director of the Chamber of the Automotive Industry.

The guild spokesperson believes that if Ecuador decides to move forward with this decision, a development policy for the sector is required. This union calls for a commercial policy that converges with the industrial one and that allows it to compete on equal terms with countries such as Mexico or Colombia.

TheEcuadorian industry currently has to pay 15% for CKD (engine, doors and otherparts of the vehicle). Another sector sensitive to this agreement is rice.Javier Chon Lama, president of the Ecuadorian Rice Industrialists Corporation(Corpcom), warned that Ecuador must prepare to join the Alliance. Otherwise,”it would mean the bankruptcy of the rice sector”, due to the levelsof competitiveness. (I)

Source: https://www.elcomercio.com/actualidad/ecuador-debe-eliminar-aranceles-mexico.html