🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

Ukraine, Ecuador seek import restrictions at WTO

Published 03/26/2009, 09:25 AM
Updated 03/26/2009, 09:32 AM

* Ukraine, Ecuador cite balance of payments problems

* IMF to assess balance of payments for WTO committee

By Jonathan Lynn

GENEVA, March 26 (Reuters) - Ecuador and Ukraine are trying to restrict imports through temporary waivers from World Trade Organisation agreements, documents on the WTO website show.

Their efforts are further evidence of the way the global recession is disrupting world trade, which the WTO now forecasts will shrink by 9 percent this year, the biggest contraction since World War Two.

They also show, in the run-up to next week's G20 summit, how protectionist pressures are simmering, even though the waivers would be legal under WTO rules giving special treatment to countries with balance of payments problems.

Ecuador's request will go to the WTO's Committee on Balance of Payments Restrictions on April 22 and 24, which will seek confirmation from the International Monetary Fund (IMF) that the Latin American oil exporter does have payments problems.

Ukraine, which joined the WTO last year, said in a request filed earlier this month that it intended to impose a 13 percent surcharge on imports, except for goods of critical importance, for six months, including motor vehicles, clothing, sugar and other foods, and some building materials and iron.

"A temporary surcharge has been introduced in the situation of significant reduction in foreign currency reserves only with a view to restore the balance of payments," it said.

But last week the government, which saw the IMF suspend an emergency loan programme last month after Ukraine broke some of the conditions amid paralysing political disputes, said it would restrict the surcharge to cars and refrigerators.

It submitted a bill on the measure to parliament on Thursday and a vote is likely on March 31.

Trade sources said Ukraine might withdraw its request to the WTO altogether.

Last week the former Soviet republic said its current account deficit had more than doubled to $12.9 billion in 2008.

Ecuador's measures, filed last month, are more far-reaching. It said it was imposing extra tariffs on some goods and import quotas on others, affecting 8.7 percent of different groups of imported products, or "tariff lines".

Ecuador said it expected a balance of payments deficit of $2.69 billion this year, including a current account deficit of $3.24 billion and a trade deficit of $3.47 billion.

It said its non-oil trade balance had deteriorated in 2008 and it expected a further, larger deterioration this year.

Ecuador adopted the U.S. dollar as its legal currency in 2000 after a crippling financial crisis. The rapid deterioration of the balance of payments has raised concern that leftist President Raffael Correa could be forced to drop the dollar, throwing the country's monetary system into chaos.

The last country to use the WTO's balance of payments waiver was Bangladesh, in 2007. Other countries that have used it are Nigeria, Bulgaria, Sri Lanka, Tunisia, Pakistan, Slovakia and Romania. (Additional reporting by Sabina Zawadzki in Kiev; editing by Tim Pearce)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.