Colombia asks Ecuador to rethink tariff barriers

Santiago Meza

BOGOTÁ, Colombia - After Ecuador recently placed higher tariffs on 1,346 Colombian exports, the Colombian government announced that it will seek a negotiated solution rather than taking retaliatory measures.

Colombian exporters said that they will argue their case for removal of the tariffs at the Andean Community (CAN) and, as a last resort, at the World Trade Organization (WTO).

Calling the tariffs "unjustifiable and illegal," Colombian Trade Minister Luis Plata warned that Bogotá might impose similar restrictions and said, according to El Tiempo, that "the measure affects 38 percent of exports to [Ecuador], which last year were worth US$570 million."

Ecuador's Vice Minister of Foreign Trade Ramon Espinel told EFE that he would be willing to talk with the CAN about the new tariffs, which he said had been introduced to offset some of the effects of the Colombian peso's devaluation against the U.S. dollar.

The new tariffs apply mainly to consumer goods, and when Ecuador, which has a dollarized economy, introduced them on July 13, it argued that the slide in the value of the Colombian currency would upset the trade balance between the two countries. It seems, however, that Quito failed to follow the procedure laid down by the CAN.

Plata told El Espectador that "when a country thinks that it needs a tariff barrier, it puts its case to the CAN. Then the country harmed by the barrier can present its case, and the decision is made by the CAN. In this case, the barrier was unilateral."

According to Portafolio, both Colombia's government and its business community believe that Ecuador is wrong to argue that its economy is being damaged by a Colombian devaluation. Plata said, "Colombia is not devaluing. On the contrary, the peso is being revalued."

In the coming weeks, Colombian trade officials will attempt to hold talks with their Ecuadorian counterparts, although bilateral relations have been broken since Colombia's March 2008 cross-border raid on a FARC guerrilla camp.

Trade between the two countries last year was worth US$2.29 billion, with a surplus for Colombia of US$712.7 million.

Source: http;//infosurhoy.com

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