Tariff Dispute: Colombia's New Offensive

The South American country decided to impose a tariff of 37.9% on clothing when its declared FOB price is less than or equal to $20, again affecting businessmen in the Colon Free Zone in Panama.

Wednesday, August 14, 2019

Decree Number 1416 of the Ministry of Commerce, Industry and Tourism of Colombia, dated August 6, 2019, specifies in its Article 1 that establishes "... a tariff of thirty-seven point nine percent (37.9%) on imports of products classified in chapters 61 and 62 of the National Customs Tariff, when the declared FOB price is less than or equal to 20 United States dollars per gross kilogram."

Article 2 stipulates that "... a tariff of 10% ad valorem, plus 3 United States dollars per gross kilogram, shall be applied to imports of products classified in Chapters 61 and 62 of the Arancel de Aduanas Nacional, when the declared FOB price exceeds 20 United States dollars per gross kilogram."

The Decree also stipulates that "... goods of Chapters 61 and 62 of the National Customs Tariff coming from a Special Customs Regime Zone, a Free Trade Zone or an International Logistics Distribution Center shall be subject to the provisions of this Decree at the time they are to be introduced into the rest of the national customs territory."

The tariff dispute between Colombia and Panama dates back years, even the case has been brought before the World Trade Organization (WTO), where the Panamanian government has filed appeals, as the rulings have concluded that the restrictive customs control measures adopted by Colombia do not violate WTO rules.

In response to the new offensive of the South American country, the Association of Users of the Colon Free Zone requested "... urgently to the administration of President Laurentino Cortizo "forceful" retaliatory measures against Colombia, for the new restrictions imposed on trade between the two countries."

Prensa.com reports that "... For this business guild, Colombia again incurs in the application of measures that harm trade with Panama. This situation directly affects the Colon Free Zone, despite the fact that on different occasions these actions that are discriminatory for our country have been upheld before the World Trade Organization"

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More on this topic

Tariff Conflict Between Panama and Colombia

March 2018

A little more than a month after the Panamanian government decided to raise import tariffs on various products as a measure of retaliation against the South American country, representatives from both governments reaffirmed their positions at a WTO hearing.

The outcome of the hearing will be announced by the WTO between August and September, according to the rules that govern the agency. 

Tariff Conflict between Panama and Colombia Continues

June 2017

The WTO has established a new compliance panel to verify whether or not the South American country has complied with the ruling mandating it to withdraw the tariff on imports of textiles and footwear from Panama.

The decision of the Dispute Settlement Body of the World Trade Organization (WTO) was made at the request of the Panamanian government, which requested a panel be established for a second time, arguing that the South American country continues to impose restrictions on the importation of the products in question "... and that it wanted the trade dispute to be addressed within the framework of the WTO."

Panama and Colombia FTAs to Negotiate Tariffs for CFZ

October 2013

Authorities from both countries will meet to find a solution to the conflict caused by the tariffs imposed on textiles and footwear from the CFZ.

"... The government of that country and Colombia will meet in the next few days in order to try to reach an agreement and resolve the situation over tariffs, which has caused losses to the Colon Free Zone (CFZ) in the Central American nation" , reported Portafolio.co.

WTO to Mediate Panama-Colombia Trade Dispute

October 2013

The World Trade Organization will form a panel to look into Panama's complaint over Colombian tariffs on textiles and footwear from the Colon Free Zone.

In August Panama asked the WTO to form an international panel.

At the request of Colombia it has not yet been defined who will make up the panel.

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