RESTRICTED
WORLD TRADE G/TRIMS/N/1/ECU/1
2April 1996
ORGANIZATION(96-1184)
Original: Spanish Committee onTrade-Related Investment Measures
NOTIFICATION UNDER ARTICLE 5.1OFTHE AGREEMENT ON
TRADE-RELATED INVESTMENT MEASURES
Ecuador
Thefollowing communication, dated 20March 1996, wasreceived fromthePermanent Mission
ofEcuador, withreference toparagraph 76oftheReport oftheWorking Party ontheAccession of
Ecuador (WT/L/77).1
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I. Description ofthemeasure anditsmain features
WithinthecontextoftheAndeanSubregionalPactandbyvirtueoftheprovisionsofChapterIV,
Section BoftheCartagena Agreement, on13September 1993, Ecuador together withColombia and
Venezuela signed theComplementarity Agreement fortheAutomotive Sector, withaviewtoadopting
acommon policy topromote specialization inthesector andtakeadvantage ofthewider subregional
market inarational manner andunder equitable competitive conditions.
Under theComplementarity Agreement fortheAutomotive Sector, theGovernment ofEcuador
requires vehicle assembly enterprises toincorporate apercentage oflocalcontent invehicles assembled
inthecountry.
Thispolicy hasbecome more flexible intheregional framework oftheAndean Pact, which
requires assembling enterprises toincorporate aminimum content ofmaterials produced inthesignatory
countries totheAgreement, rather thanofdomestic production.
1. Which isthecategory intheillustrative listunder which themeasure falls?
Under theAnnex totheTRIM Agreement, thecategory oftheillustrative listunder which
thismeasure fallsisNumber 1,paragraph (a).
2. IstheTRIM applied bytheGovernment under discretionary authority ormandatory legislation?
TheTRIM isapplied under ageneral law.
3. Where theTRIM isgeneral innature, whatarethecriteria fordetermining towhich enterprises
itapplies?
Themeasure applies toanynational orforeign vehicle assembly enterprise inEcuador.
1Theinformation inthisnotification waspreviously submitted byEcuador totheWorking Party onthe
Accession ofEcuador indocument WT/ACC/ECU/2 of17May 1995.G/TRIMS/N/1/ECU/1
Page2
4. Where theTRIM isapplied pursuant tomandatory legislation, doesthelegislation require the
measure tobeapplied tonewenterprises ornewinvestments ofexisting enterprises?
Therelevant Andean provisions apply toallexisting national orforeign assembly enterprises
inthecountry andtoanythatmaybeestablished inthefuture.
5. Whether compliance withthemeasure bytheenterprise is(a)mandatory orenforceable under
domestic laworadministrative rulings or(b)necessary toobtain anadvantage. Inthelatter case, the
nature oftheadvantage should bedescribed.
TheAndean provisions aremandatory andapply generally toallassembly enterprises inthe
country.
6. When theTRIM relates tospecific products, sufficient detail onthese products todefine the
scope ofthemeasure must beprovided.
Theminimum percentages tobeincorporated apply tovehicle assembly, divided intotwo
categories:
(a) Forcategory 1:Thecurrent requirement is35percent, which willincrease to
40percentfrom 31December 1995.
(b) Forcategory 2:Therequirement iscurrently 35percent.
7. ThedateofimplementationoftheTRIMandthenatureofanymodificationoftheTRIMeffected
within 180daysprior totheentry intoforce oftheWTO Agreement.
Themeasure hasapplied inEcuador sinceitwassigned. TheAgreement introduced theconcept
ofapercentage ofsubregional purchases, aformula forcalculating itandrequirements forthe
corresponding content.
8. Inapplying theTRIM, under previous legislation, isthere aprovision foritsphasing down
and/or elimination?
Noprovision hasbeenmade foritsphasing down and/or elimination.
9. Thedomestic law,regulation oradministrative guideline under which theTRIM isapplied;
acopyshould besubmitted totheSecretariat tobeavailable forinspection byinterested members.
AcopyoftheComplementarity Agreement fortheAutomotive Sector isannexed.2
10. ThelevelofGovernment applying theTRIM, thename oftheimplementing agency andany
information ontheprocedures governing itsapplication necessary toestablish itsnature andscope.
TheMinistry ofIndustry, Trade, Integration andFisheries (MICIP) isthebody responsible
forapplying andenforcing themeasure. TheMinistry requires areport every sixmonths byenterprise
andbycategory ofthepercentage ofsubregional purchases, andeachyearareport byspecialist audit
andcontrol entities, contracted directly byassembly andautopart enterprises.
2Copies ofthisdocument areavailable intheSecretariat forinspection byinterested delegations (Intellectual
Property andInvestment Division).G/TRIMS/N/1/ECU/1
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II. General information ontheprogramme inquestion
Thepolicy ofsupporting theautomotive sector pursued byEcuador falls under the
Complementarity Agreement fortheAutomotive Sector oftheAndean Pact, which wasconceived as
ameans ofpromoting thedevelopment oftheincipient regional automotive industry.