Identifier
Created
Classification
Origin
09BOGOTA2248
2009-07-15 21:39:00
UNCLASSIFIED
Embassy Bogota
Cable title:
COLOMBIA IRKED BY ECUADORIAN SAFEGUARD DUTIES
how-toVZCZCXYZ0003 RR RUEHWEB DE RUEHBO #2248 1962139 ZNR UUUUU ZZH R 152139Z JUL 09 FM AMEMBASSY BOGOTA TO RUEHC/SECSTATE WASHDC 9764 INFO RUEHCV/AMEMBASSY CARACAS 2502 RUEHPE/AMEMBASSY LIMA 7794 RUEHLP/AMEMBASSY LA PAZ JUL PANAMA 3905 RUEHQT/AMEMBASSY QUITO 8493
UNCLAS BOGOTA 002248
SIPDIS
E.O. 12958: N/A
TAGS: ECON ETRD EINV EAGR ECIN CO
SUBJECT: COLOMBIA IRKED BY ECUADORIAN SAFEGUARD DUTIES
UNCLAS BOGOTA 002248
SIPDIS
E.O. 12958: N/A
TAGS: ECON ETRD EINV EAGR ECIN CO
SUBJECT: COLOMBIA IRKED BY ECUADORIAN SAFEGUARD DUTIES
1. On July 11 the Government of Ecuador instituted exchange
rate safeguards against Colombian imports covering 1,346
products. The GOE says it needs the safeguard to counter the
Colombian Peso devaluation caused by Colombian Central Bank
intervention. (NOTE: The peso has actually revalued in the
first semester of 2009 to the tune of 8.5%. END NOTE) The GOE
is also contemplating the application of Ecuador's ordinary
national tariff levels to several goods imported from
Colombia.
2. The GOC estimates the safeguard would affect 38 percent of
all exports to Ecuador. Other estimates indicate that 85
percent of all the products that fall under the safeguard
would experience tariff increases in the order of 20 to 30
percent. The safeguard will most heavily affect the
automotive, textiles and cosmetic sectors, while also
affecting assorted goods such as alcoholic beverages,
detergents, tiles, sugar, cereals, soaps, and plastics. The
GOC estimates these products valued USD 609 million in 2008
exports, with the automotive (USD 80 million) and textile
(USD 71 million) sectors being the most significant. Ecuador
is Colombia's third largest trading partner, after the U.S.
and Venezuela.
3. The GOC considers the measures illegal under Andean
Community (CAN) provisions since Ecuador did not receive the
aval of the CAN Secretary General prior to imposing the
duties. Trade Vice Minister Gabriel Duque told EconCouns
that the GOC is examining all response options, with an eye
toward maintaining "respect for appropriate institutions."
The firs option will likely be an appeal to the CAN
Secretariat to declare the safeguards illegal. If that is
unsuccessful, the Colombians will look at instituting a WTO
case or imposing retaliatory duties. The Colombian business
community is decidedly mixed about the latter option, being
nervous about engaging in a trade war over measures that most
regard as politically motivated. Duque emphasized that the
GOC would move cautiously in responding to the Ecuadorian
action, and if retaliatory duties were ultimately adopted,
they would be "mirror images" of the GOE measures.
Brownfield
SIPDIS
E.O. 12958: N/A
TAGS: ECON ETRD EINV EAGR ECIN CO
SUBJECT: COLOMBIA IRKED BY ECUADORIAN SAFEGUARD DUTIES
1. On July 11 the Government of Ecuador instituted exchange
rate safeguards against Colombian imports covering 1,346
products. The GOE says it needs the safeguard to counter the
Colombian Peso devaluation caused by Colombian Central Bank
intervention. (NOTE: The peso has actually revalued in the
first semester of 2009 to the tune of 8.5%. END NOTE) The GOE
is also contemplating the application of Ecuador's ordinary
national tariff levels to several goods imported from
Colombia.
2. The GOC estimates the safeguard would affect 38 percent of
all exports to Ecuador. Other estimates indicate that 85
percent of all the products that fall under the safeguard
would experience tariff increases in the order of 20 to 30
percent. The safeguard will most heavily affect the
automotive, textiles and cosmetic sectors, while also
affecting assorted goods such as alcoholic beverages,
detergents, tiles, sugar, cereals, soaps, and plastics. The
GOC estimates these products valued USD 609 million in 2008
exports, with the automotive (USD 80 million) and textile
(USD 71 million) sectors being the most significant. Ecuador
is Colombia's third largest trading partner, after the U.S.
and Venezuela.
3. The GOC considers the measures illegal under Andean
Community (CAN) provisions since Ecuador did not receive the
aval of the CAN Secretary General prior to imposing the
duties. Trade Vice Minister Gabriel Duque told EconCouns
that the GOC is examining all response options, with an eye
toward maintaining "respect for appropriate institutions."
The firs option will likely be an appeal to the CAN
Secretariat to declare the safeguards illegal. If that is
unsuccessful, the Colombians will look at instituting a WTO
case or imposing retaliatory duties. The Colombian business
community is decidedly mixed about the latter option, being
nervous about engaging in a trade war over measures that most
regard as politically motivated. Duque emphasized that the
GOC would move cautiously in responding to the Ecuadorian
action, and if retaliatory duties were ultimately adopted,
they would be "mirror images" of the GOE measures.
Brownfield