WTO Publishes Trade Policy Review On El Salvador
Friday, February 12, 2010
The World Trade Organization’s (WTO's) latest Trade Policy Review on El Salvador
has commended the authorities on their efforts to liberalize trade but has warned
that fiscal privileges still distort economic incentives.
“El Salvador has continued to liberalize its trade regime since its
previous Trade Policy Review in 2003, and has made progress in modernizing customs,
eliminating unnecessary licensing requirements, enhancing the transparency of
technical regulations and SPS (sanitary and phytosanitary) measures, and strengthening the institutional
framework for competition policy and government procurement. As part of its
liberalization efforts, El Salvador has also entered into three new preferential
trade agreements and continues to assign high priority to deepening Central
American integration,” the WTO Secretariat’s report states.
However, the WTO said that economic growth has been "modest" and underpinned by remittances
from abroad. "In addition, the performance of the manufacturing sector has been
below expectations, notwithstanding El Salvador’s long-standing policy
of granting subsidies and fiscal privileges to exporters,” the report stated.
The WTO urged El Salvador to address the challenges it faces
by taking additional steps to liberalize its trade regime on an Most Favored Nation (MFN) basis and
reassessing its export strategy with a view to eliminating economic distortions.
The report along with a policy statement by the government of El Salvador,
formed the basis for the third Trade Policy Review (TPR) of El Salvador by
the Trade Policy Review Body of the WTO on February 10 and 12, 2010.