The removal of the 6% return on exports has not been compensated in practice by the laws that are intended to have a dynamic effect on foreign sales.
Elsalvador.com reports that two years after MPs approved three laws intended to replace the return of 6% on exports, known as "drawback", the exporters have been "Without a bowl and without the soup".
As set out in the FTA with the U.S., Canada and the European Union, Panama has three months to remove or replace these incentives.
Authorities from the MICI, the Panama Exporters Association (APEX) and the Union of Agro export of non-traditional products (Gantrap) are preparing a proposal, which must first be approved by the Cabinet Council and later by the National Assembly.
Last year, the Stock Exchange of El Salvador negotiated credit notes for $120 million, and so far in 2012, $37 million has been negotiated.
From a press release of the Exporters Corporation of El Salvador:
So far in 2012, the Stock Exchange of El Salvador (BVES) has negotiated $37 million in Public Treasury Credit Notes (PTCN) issued by the Government through the Ministry of Finance.
The regulation establishing export incentives for "draw back" substitutes is still pending approval in El Salvador.
During the inauguration of the Third Meeting of Exporters, the Exporters Corporation of El Salvador (Coexport) called on the Government to establish the dates for the entry into force of the regulations on the Law for the Promotion of Production, which establishes new incentives.
The Costa Rican rice sector is demanding that the government increases the controls for rice entering from Nicaragua.
Doubts about the true origin of rice coming into the country have led Costa Rican rice growers to request a review of rules of origin for imports, suspecting that the grain is entering in a triangular fashion.
Meanwhile, in Nicaragua, a country where rice production is insufficient to meet domestic demand, export of the grain is almost nonexistent, leading to suspicions that the rice is coming from other countries on the isthmus and then being transported to Costa Rica.
Foreign sales grew by 28% between January and March, compared to the same period last year.
Although it was feared that removing the government subsidy of 6% of export costs would reduce the pace of growth, to the surprise of businesses exports have actually risen.
The increase has been seen not only in traditional products like coffee and sugar, which have benefited from high prices in the international markets but also in non-traditional exports which grew by 37.6%.
The BMI and the Ministry of Economy presented the Export Guarantee Fund (FIDEXPORT).
According to the president of BMI, the FIDEXPORT aims to provide guarantees for short-term financing for export of goods and services required by companies exporting to Financial System institutions in El Salvador.
This fund can support all types of companies applying for exports seeking credit or working capital in order to produce and export goods and services with risk categories A1, A2, B and C1-level financial system.
The Costa Rican government is preparing an urgent proposal to solve its incompliance with trade regulations.
The proposal must be submitted by the end of September when the World Trade Organization's (WTO) Agriculture Group meets. However, first it needs to be negotiated with domestic rice growers and exporters.
Fernando Ocampo, Foreign Trade vice-minister, told Nacion.com that, "the proposal will take into account four considerations: compliance with WTO rules, consumer protection, support for growers and industry interests".
The U.S. Government extended Panama’s tariff benefits for apparel goods until September 2020.
In order to export textile goods with zero tariffs, Panama may not use more than 200 million meters of fabric imported from other nations, informed the Commerce Ministry.
Prensa.com reported that although textile companies see this extension with good eyes, they demand additional production incentives for their industry.
The ‘Drawback’, a 6% incentive for Salvadoran exporters, was removed on January 1st.
Exporters gathered at Coexport (Salvadoran Exporters Corporation) complain that the current proposal for promoting exports does not include a compensation for the removal of the incentive. They appreciate the inclusion of their suggestions for greater support to new exports, as well as increasing the number of exporting companies.
The government proposed a new strategy to promote exports, which includes 21 different programs.
One of the programs will provide bonds for companies implementing responsible labor practices, while another will reward companies producing under environmental rules.
Héctor Dada, Economy Minister, told Laprensagrafica.com that "we are not focusing just on increasing exports, but on fostering the production of exportable goods.
In January 2010 the Salvadoran Government will present its new policies for fostering exports and investment.
The plan includes the creation of a development banking system, in which the Multi-sector Investment Bank would be used to make public credit available to the productive sectors.
"As for the policies fostering exports and investment, ... he said that the current draft includes administrative and credit measures, as well as tax incentives and support for modernizing and innovating", reported Elsalvador.com.
3% will be removed in January 2010 and another 3% in June of the same year, announced the Government.
This was achieved after negotiations between treasury minister Carlos Cáceres and the export sector.
In the negotiations, the State committed to creating "...an exports promotion policy in compliance with international regulations", reports Laprensagrafica.com.
The export subsidy incentives for Panamanian companies, which would have expired in 2009, were extended until 2015.
The incentives for the Official Registry of Panamanian Industry were extended until 2015 by the World Trade Organization, which attracts business investment.
The president of the Union of Panamanian Industries, Valerio De Sanctis, told the media: "There are a number of tax advantages in return for profit reinvestment and an investment at the industry level by the company. This increases employment."