Saturday, August 3, 2013

Ecuador to Compensate Exporters Hurt by End of U.S. Trade Preferences-

The Wall Street Journal - Wednesday, July 31, 2013 As of 3:36 PM EDT
 
    By Mercedes Alvaro 
 
QUITO, Ecuador--Ecuador's National Assembly approved a law late Tuesday to compensate exporters affected by the expiration of the U.S.-Andean Trade Preferences and Drug Eradication Act, or Atpdea.
The law was approved with 103 votes in favor and only one against. It will compensate exporters with about $23 million a year.

The law allows for the giving of tax-credit certificates to companies affected by the removal of the preferences. The certificates can be used to pay taxes or some debts with state-owned banks.
The government of President Rafael Correa has said that the impact of losing the preferences will be $23 million a year, while Ecuadorean exporters put the number at $26 million.

The Atpdea provides duty-free access to some U.S. imports from Ecuador. It originally was created to help four Andean countries in their efforts to fight drug production and trafficking, but currently Ecuador is the only remaining beneficiary of the preferences.

The Atpdea benefits expire Wednesday, and the application of tariffs for Ecuadorean products will start on Thursday.

The U.S. is Ecuador's top trade partner. Last year, the Andean country's exports to the U.S. totaled about $10.62 billion, which represents 45% of the country's total exports.

Last year Ecuador exported about $242 million under the Andean trade preferences to the U.S., 23% of the country's non-oil exports, including canned tuna, flowers and broccoli.

These three products accounted for about 90% of the Ecuadorean exports under the Atpdea.
According to the Ecuadorian Exporters Federation, known as Fedexpor, about 250 products and more than 200 companies will be affected by the loss of the preferences.
Read more: http://online.wsj.com/article/BT-CO-20130731-715304.html

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