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Restrictions on Cell and Vehicle Imports Along with Tariffs and Import Quotas for Ecuador

Article Summary:

Ecuador is issuing new tariffs and import quotas on over 100 products; items to be sanctioned with up to a 20% tariff include flat-screen televisions, paper, cardboard products, beer, and alcoholic drinks. Meanwhile, the government has also set forth restrictions on the importation of cellular phones and vehicles.

Photo Credit: El Comercio

Original Article Text From El Comercio via Google Translate :

Sharp Adjustments to Imports

The Government introduced an amendment to tariff and import quota of more than 100 products since last Friday. Through three resolutions (63, 66 and 67) the Committee of Foreign Trade (Comex) set the new measures.

The first document sets tariffs for products made from those TVs, snuff, paper, cardboard, hair clippers, combs, cameras, brushes, etc.. Another of those items which are covered by the measure of malt beer, sparkling wine, cider and other alcoholic drinks, such as creams, brandy and vodka, which went to pay a tariff ad valorem (on value) of 20 % to pay a fee of 1% mixed and $ 0.25 per degree alchólico. Within this measure are 20 spirits.

They are also in Resolution 63 and videor reproductores TVs, including 22-inch plasmas and 50 inches, which will pay ad valorem tariff of between 5% and 20%, plus a specific tariff of between USD 73.11 and USD 158 , per unit. The washing machines, meanwhile, rose 15% to 25% per unit, as determined by the document.

The other two resolutions provide for quota in value and units for 38 importers of vehicles (see note below shared) and 33 cell phones (including the inability to bring phones via courier / mail or passenger).

Among the buyers affected by this measure is Andrew (name withheld), who is set an annual quota of 296 units and $ 21 7679.31. “We already surpassed that quota (700 units in half a year) and what we will do is stop playing to sell what we have and stop. This forces you to make staff cuts from next week, because many affected by the measure “he said.

The importer said that between five and 10 small importers, as he also hit. It is considered beaten twice, as it ensures that the largest importers fees remain high, both in value and units. Conecel (Light), for example, has an annual fee of USD 79.5 million and a million units. While Otecel (Movistar), USD 24 million and 328 541 units. Neither company wanted to comment on the restrictive measure right now. Meanwhile, in the phone commercial sector, most known local resolutions. Of 10 businesses visited in Quito only three knew the new government standard.

Among the businesses affected is Bosmediano Caesar, who owns a local sales of cell phones, electronics and computers, located in the south of the city. Note that the measure will lower the supply of mobile phones and prices will rise immediately. In addition, such items become scarce in the market. Think seriously stop selling phones in view of the action taken by the Government. Another of the businesses affected is Fabian Sivinta, store manager Memory Digital, also located in the south of the city. They are sold phones and electronic equipment. According Sivinta, this measure is particularly detrimental to the mobile microimportadores. She says that before they could bring items in smaller quantities by courier at more affordable prices.

But with this step, it considers that favor, especially the big importers and large smugglers. “Since yesterday began to offer handsets that come without bill or warranty, because they are less expensive. The more forbids the government, the market appears more informal “he said. For Alexis Valencia, formerly of the Community of Andean Nations (CAN), the measure aims to restrict imports of cell phones and used as an excuse the issue of health advocacy for applying the exceptions under Article XX of GATT (Agreement General Agreement on Tariffs and Trade), which allows the imposition of measures to protect, among other things, the health of humans.

“I consider it an excuse, because the same reasoning could be prohibited import saving light bulbs, batteries, computers, ‘laptops’, among others. The article mentioned allows you to apply the measure to countries with which Ecuador has trade agreements. In this case is for Brazil, which has 100% preference for these items and in the first four months of this year captured 25% market share. Restriction 2009 The January 19, 2009 the President Rafael Correa announced the restriction imports for 627 subheadings.

The measure was taken to reduce USD 1 459 millions of imports, relative to 2008. Ecuador trade balance problems faced. Were removed in 2010. Viewpoint Ayala Luis Casanova. Cellular store manager Doctor ‘will affect the gain of the second half’ I have the local sales of mobile phones and accessories for 13 years. Here we work about nine people who report directly to the business. The move to restrict the import of phones it seems illogical, especially if one argues that imposed for environmental damage caused by debris from the phones. I recycle all the old batteries that come to me.

There are things much bigger than a cell phone that pollute more and do not know why these products are restricted. How can I leave without a job? Are restricting the bulk of my revenue, reaching the second half of the year. Fernando Cartagena. Cellular dealer ‘The biggest hit will be the users’ do not have a complete knowledge of the measure, but I can assure that those most affected and who will lose will be more users. We made ​​direct imports with prices much cheaper and open bands, cheaper than the big brands such as Claro and Movistar. We brought cheaper phones brought legally by Customs, equipment operators in major cost $ 500 but we were bringing to $ 300. These could offer reasonable prices because we were bringing in large quantities. If we now lower the quota, then you will not be profitable this business. Quotas for import vehicles since last Friday, the Committee of Foreign Trade (Comex) set a total of 38 national vehicle importers quotas on the number and amount dollars for foreign purchases of 16 subheadings. This is also regulated in the Resolution 66 of the entity, which was published last June 15 in the Official Gazette. There also stipulates that importers must comply with the two parameters together in order to nationalize the goods brought from outside. The measure, as in cell phones are set by environmental impact issues, will run until 31 December 2014.

According to Gloria Navas, president of the Automotive Business Association of Ecuador (AEADE), are assessing the impact of the measure “on the development of firms and especially on the workforce of the sector.” The directors guild He added that through the resolution are to decrease approximately 30% of the amount of imported vehicles in the country. In September last year the Government set for this and other sectors, the import licensing mechanism as a form to record purchases. Clemente Ponce, AEADE CEO, said in April that through them you wanted to reduce imports by 20% compared to 2010 purchases. In a tour conducted by this newspaper in dealerships indicated that precisely because quotas were being imposed on importers, but there was a document that endorse the measure. With regard to prices of the vehicles indicated that has not yet been determined whether they increase or whether it will drop the stock they have now on the market.

TRADE learned that tomorrow is a meeting between the country’s importers and Coordinating Minister for Production, Santiago Leon.

Link to Original Article:

From El Comercio

  • Robert in Canada

    The convoluted left wing backward looking type of thinking behind these new tariffs is why I have crossed Ecuador off my list of countries to move me and my business to.

    Good for Ecuador, maybe Ecuador will reach their goal of being a country of un-educated poor peasants with a small group of rich insiders at the top – like Cuba and Venezuela.

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