Search

 

Cablegate: Goe to Lower Tariffs On Inputs, Raw Materials, Capital

VZCZCXYZ0007
OO RUEHWEB

DE RUEHQT #2019 2492016
ZNR UUUUU ZZH
O 062016Z SEP 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7665
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 6864
RUEHCV/AMEMBASSY CARACAS PRIORITY 2667
RUEHLP/AMEMBASSY LA PAZ SEP 0706
RUEHPE/AMEMBASSY LIMA PRIORITY 1893
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 2751
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS QUITO 002019

SIPDIS

SENSITIVE
SIPDIS

TREASURY FOR MMALLOY AND MEWENS

E.O. 12958: N/A
TAGS: ECON ETRD EC
SUBJECT: GOE TO LOWER TARIFFS ON INPUTS, RAW MATERIALS, CAPITAL
GOODS

REFTEL: Quito 1794

1. (SBU) Summary: The GOE intends to reduce tariffs on inputs, raw
materials, and capital goods to increase production and
competitiveness and control rising prices. Tariffs on 1,957
products will fall from 5-20 percent to 0-5 percent. The private
sector has praised the plan but fear it could be accompanied by
increased tariffs on imported manufactured goods. End Summary.

2. (U) As part of a new economic policy to increase production and
competitiveness in the industrial and agricultural/fishery sectors
(and counter rising prices), the GOE presented a proposal August 21
to cut tariffs on inputs, raw materials, and capital goods to
COMEXI, a joint public sector/private sector trade committee.
COMEXI approved the proposal after the GOE agreed to reduce a few
more tariff lines at the request of the private sector. Tariffs on
1,957 products will be reduced from 5-20 percent to 0-5 percent. To
implement the proposal, President Correa must issue an executive
decree, which is expected within several weeks.

3. (U) The tariff reductions cover a wide range of products and are
expected to benefit numerous sectors, including textiles,
agriculture and fisheries, automotive, food and beverage, and white
goods. The cuts that have generated the most attention are those
for wheat and wheat flour (tariffs on these products will drop from
20 percent to zero for six months as part of an effort to maintain
bread prices in the face of rapidly rising international wheat
prices, reftel).

4. (SBU) Comment: The GOE's plan to reduce tariffs and further
open Ecuador's economy is a positive, market-oriented development.
However, according to the Executive Director of the Guayaquil
Chamber of Commerce, Teodoro Maldonado, the GOE told COMEXI that the
cuts would be accompanied by increased tariffs on some manufactured
goods to protect Ecuadorian industry. To date, the GOE has not
indicated what tariff lines it might increase. This type of
protectionist measure, if implemented, would reflect a strain of
thinking in the GOE that government intervention will help promote
local production. Maldonado reported that his chamber would resist
any tariff increase, but did not know how other parts of the private
sector might react. End Comment.

JEWELL

© Scoop Media

 
 
 
World Headlines

 

Gordon Campbell: On The Washington Riot And The Georgia Results
Hong Kong and Washington DC. On the same morning, the tyrants in power in Beijing and their counterpart in the White House have shown how they refuse to accept the legitimacy of any different points of view, and the prospect of losing power… More>>

WHO: Vaccination No Guarantee Of Virus Eradication

In the final World Health Organization (WHO) COVID-19 press conference of the year, on Monday, senior officials warned that the virus is 'not necessarily the big one', and that there is a real chance of another, more serious pandemic spreading ... More>>

Covid: Two Billion COVID Vaccine Doses Secured, WHO Says End Of Pandemic Is In Sight

The end of the pandemic is in sight but we must not let our guard down, the head of the World Health Organization (WHO) said on Friday, as he welcomed the news that the global vaccine partnership COVAX has lined up almost two billion doses of existing ... More>>

UN: Guterres To Seek Second Five-year Term
António Guterres will be seeking a second five-year term as UN Secretary-General, which would begin in January 2022.... More>>


UN Rights Office: Iran Execution Of Child Offender Breaks International Law

The execution of an Iranian man for a crime allegedly committed when he was 16 years old has been condemned by the UN Human Rights Office (OHCHR) and raised concerns over violations of his right to a fair trial. In a statement released on Thursday, ... More>>

UN News: Fighting Displaces Over 500,000 In Northern Mozambique, Reports UN Refuge Agency

Attacks by armed groups in Mozambique’s Cabo Delgado, Nampula, Zambezia and Niassa provinces have displaced more than 530,000 people, many of whom have been forced to move multiple times, the UN refugee agency (UNHCR) said on Friday. According to ... More>>