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Imports rose 22.4% between 2017 and 2016
Posted On 14 Mar 2018
Ecuadornews:
During this period, the country demanded more products abroad than those that it exported in that period. Even so, businessmen suggest that trade restrictions should not be imposed. The postponement of the Government’s economic management plan leaves fundamental issues for the development of the national industry, which now faces the increase in imports in the order of 22.4% during 2017, as opposed to 2016.
With the elimination of the safeguards, in June of last year, the rebound of imports was expected, especially those of consumer goods. The measure took effect from March 2015 and imposed surcharges on more than 2,900 subheadings, which reduced the purchase of foreign products. The Trade Balance of the country shows that between January and December of last year imports totaled $ 3,482.6 million more than in 2016. Consumer goods represented 31.2% of imports; raw materials and capital goods reached 18% and 18.8%, respectively. When looking at exports, figures from the Central Bank of Ecuador show that the variation is positive (13.8%), but it is still lower.
This means that the Ecuadorians demanded more products from abroad, while the export did not evolve in the same rhythm. The economic front, which until March 6 was led by Carlos de la Torre, former Minister of Finance, had among its plans to raise to the maximum levels the tariffs of 375 tariff items, as a measure to control imports and balance the Trade Balance. The current holder of this portfolio of State, María Elsa Viteri, has not yet pronounced on the matter.
The productive sectors have divided criteria on the possibility that the Government ends up adopting the restriction and its effects. Lilia Villavicencio, president of the National Chamber of Footwear (Caltu), is in favor, therefore, she said, the safeguards allowed the production of this sector to grow. Now, in the first two months of the year, marketing decreased by around 15% compared to January and February 2017, according to Caltu.
That is why Villavicencio supports the restriction applied to encourage the industry, but, he clarified, another set of policies is required in labor issues, foreign trade and production costs. Andrés Robalino, president of the Chamber of Industries of Cuenca, believes that the solution is not to curb imports, but to strengthen local production by making it more competitive. “That less raw materials and capital goods are imported means that the industry has not yet reactivated, a situation that will not be reversed if the economic plan does not address tax issues, tariffs (customs control rate), legal stability and market opening” . In the opinion of Rodrigo Gómez de la Torre, president of the Chamber of Agriculture Zone I, confidence in production has not yet recovered.
He expects Viteri to rule out any measure that increases tariffs and resolves the gradual reduction of the Foreign Currency Exit Tax, as well as the advance payment of Income Tax. Christian Cordova, general manager of DHL Global Forwarding in Ecuador, analyzed that although technically imposing more tariffs can balance the Trade Balance and keep the dollars in the economy, its application can generate side effects in productive sectors that depend on imports to elaborate their goods. He noted that the challenge is not only to produce more, but to diversify. (I)
