There are a number of alarming signals in advance of the 2nd round of negotiations of the EU-Ecuador FTA starting on 24 March. spiritsEUROPE continues to have concerns with Ecuador’s tariff and excise tax structures, which we believe are not compliant with Ecuador’s WTO obligations and should be addressed during the negotiations if ever Ecuador is willing to “join the club” of Colombia and Peru. A number of concrete issues emerged at the end of last year which must be addressed by the negotiators (see full position here).
Ecuador must ensure that its standards and labelling provisions do not act as technical barriers that limit and ultimately block market access for EU spirits. In September last year, Ecuador adopted new labelling requirements which require certain imported spirit drinks (whisky, vodka, rum, and tequila) to bear a country-specific front label detailing the name of the local importer. Plus, the front label must be applied at origin (rather than in-market in bonded warehouses where country-specific back labels are normally applied). Ecuador’s labelling rules therefore require special bottling runs, leading to disproportionate costs for producers.
Secondly, Ecuador has introduced technical standards which are not consistent with international practice and act as technical barriers to trade. Several examples can be cited: technical rules on the origin of the wood of the barrels used for maturation of rum; rules banning flavours in vodka, or rules only allowing liqueurs to be mixed with products of vegetal origin - which completely rules out of the Ecuadorian market liqueurs that contain foodstuffs such as cream or milk.
Last but not least, Ecuador should be reminded of its obligations to the WTO with regard to notification procedures.
