Ecuador to raise tariffs to protect local markets

QUITO

Ecuador's government has decided to raise trade tariffs on some agricultural and other products, including liquors, cigarettes and technological equipment to protect local industry from competition, a trade committee official said on Wednesday.

The increase is part of policies by left-wing President Rafael Correa to promote local industry and reduce consumption of what the U.S.-educated economist and former finance minister has qualified as "lavish" goods.

The government resolution proposes tariffs of up to 30 percent and in the case of mobile telephones tariffs will increase to 15 percent, according to the COMEXI trade council, which is a joint state and private sector trade board.

"The COMEXI has decided to apply new tariffs on 567 subgroups," council representative for the private sector Patricio Donoso told Reuters.

Donoso said in some cases the decision would take the tariffs to the maximum level established within the regulations set by the World Trade Organization.

Some business groups reject a hike in tariffs because they believe it will dampen domestic demand -- one of the engines of Ecuador's economic growth. But the Correa administration want to reactivate local industry.