Ecuador lifts import quotas

PANAMA. Ecuador is going to eliminate the restrictions quotas that it imposes on Panama’s imports.

These mainly affect the re-exportation of clothes, shoes and electronic appliances from the Colon Free Zone, and limit the presence of these products in the Ecuadorian market.

The Ecuadorian government adopted these measures in January this year to protect its local economy as Panamanian products are more competitively priced than their local goods.

In a document sent to the Panamanian authorities, Ecuador said that it would eliminate all the measures adopted against the Colon Free Zone, which uses Ecuador as one of its main distribution centers.

The agreement will eliminate restrictions on more that 600 lines of products, which have been affecting world trade, particularly between Ecuador and the European Union, the United States and Colombia, among others.

Several countries, including Panama, took the case to the WTO because Ecuador did not want to scale down its import quota system on the grounds that the threat of a global financial crisis will have an adverse effect on its already shaky finances.

The Payment Balance Restriction Committee of the World Trade Organization (WTO) concluded that the quotas should be eliminated because they were affecting global commerce.

The Panamanian Commerce Minister, Gisela Alvarez de Porras, said that in the first phase of the dismantling process of the old system, the quantitative restrictions will be replaced with measures that take into account product prices.

The new measures are to be in place by September 1 this year.

Ecuador also agreed to be monitored by the WTO which will make sure that the dismantling of the quotas program is on schedule.

Colombia, one of the countries most affected due to its proximity to Ecuador, was pleased with the WTO decision and happy with the compromise achieved by all the parties.

During the consultation process, Panama pointed out the need for a timetable for elimination of the quotas.

Minister Porras said that the Free Zone would greatly benefit with this consensual effort between the public and private sector.

The Free Zone has experienced losses since Ecuador imposed the quotas system.