Nicaragua: TPL for Textile Exports At Risk

A bill that is being analyzed by the U.S. Congress aims to reduce the level of tariff preference to only 6% of imports from Nicaraguan textile factories.

Monday, June 9, 2014

Although the possibility exists of an extension of the current Tariff Preference Level (TPL) until 2015, American congressmen have proposed that the benefit be granted only on cotton pants, which represent the lowest proportion of Nicaraguan textile exports to the United States.

"Álvaro Baltodano, Technical Secretary of the National Commission of Free Trade Zones, explained that those are the two options that are now in the United States Congress and ... are backed by the companies in the country which the Nicaraguan textile factories export to. 'A project which has a hundred percent guarantee such as the TPL, will benefit the textile and manufacturing industry in the United States and Nicaragua', claimed Baltodano.

"On December 31, 2014 the nine years of TPL benefits given by the United States to Nicaragua will expire, a term which has allowed the country to export clothing made from yarn and fabrics from third countries, for a maximum annual volume of hundred million square meters. Once expired, textile companies from the free zone will pay tax for exports, which would bring the cost up to 35%. The free zone industry exported U.S. $2.563 billion, 52% of total exports, in 2013. "



More on this topic

Nicaragua Overcomes Loss of US Preferences for its Textiles

August 2016

At the end of the first half of the year maquila textile exports to the United States grew by 13% compared to the same period in 2015.

Figures from the biannual report by the US Office of Textiles and Clothing (OTEXA) show that between January and June Nicaragua sold 255 million square meter equivalents (SME) to the United States generating revenues of $708 million.

"Nicaraguan Textile Companies Do Not Need TPL"

December 2014

The Under Secretary of Commerce in the United States sees no need for renewal of preferential tariff arrangements, which up to now have favored Nicaragua's textile industry.

Statements by the senior official of the Obama administration fell like a bucket of cold water over textile entrepreneurs, who claim that without the renewal of TPL, production costs will increase by up to 40%.

TPL Needed for Central American Textile Companies

November 2014

Nicaraguan businessmen have proposed that Central America as a whole operates a preferential tariff treatment in the US for imports of textiles in the region.

After trying to negotiate, through several formats, tariff preference levels (TPL), so far unsuccessfully, textile entrepreneurs are now appealing to the union of the region to address the issue with the US once again.

Tariff Preferences for Textiles At Risk

April 2013

The preferential system which allows Nicaraguan textiles made with raw materials from countries outside of the DR-CAFTA to enter the U.S. without tariffs will expire at the end of 2014.

"... By the end of next year the nine-year grace period given by the United States to Nicaragua will expire, a benefit known as tariff preference level (TPL) which allows the country to export clothing made from yarn and fabrics from third countries for a maximum annual volume of one hundred million square meters." noted an article in Laprensa.com.ni.

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