From this year these three products will be traded duty-free under the DR-CAFTA agreement.
The tariff reduction process that started with the entry into force of the free trade agreement with the United States and Central America has now reached completion for rum, flour and fats exported from Guatemala.
"...The first product is rum, which in 2006, when the trade agreement came into effect, had a tariff base of 40 percent.Last year, the import tax had reached 3.3 percent and this year it is zero.Other products that are in the same situation are the residues from the treatment of animals and plant fats (other than poultry, cattle and pigs) and flour from wheat or morcajo (meslin), according to the Ministry of Economy."
Most of the products which Nicaragua exports to the USA will continue to enjoy, for at least 10 years, tariff advantages compared to those products sold within the Transpacific Association Agreement.
From a statement issued by the US Embassy in Managua:
The Director of the Office of Bilateral Trade Affairs, Department of State, Robert D. Manogue, visited Nicaragua for the purpose of holding meetings with government cabinet members in charge of the portfolio of foreign trade and private sector members, with whom he discussed opportunities for Nicaragua to achieve greater economic prosperity.
Between January and October foreign sales in the sector amounted to $1.281 billion, 5.9% more than the $1.21 billion generated in the same period in 2013.
From a statement issued by the Nicaraguan agency for promoting and exporting (PRO-NICARAGUA):
Nicaragua is the second country in the framework of DR-CAFTA with the highest percentage of exports of textiles in 2014.
Arbitrators working under the framework of DR-CAFTA have ruled that Costa Rican exports within this trade agreement in El Salvador should receive the tariff preferences provided for in the text.
From a statement issued by the Ministry of Foreign Trade of Costa Rica (COMEX):
Defending the interests of the country as part of the effective administration of the treaty
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.
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.
Companies are preparing for the process of tariff reduction for imported goods and services from the United States under the FTA.
Starting 2015 various products will be able to come into Nicaragua from the U.S. tax free. Employers are now preparing for the tariff reduction process of the Free Trade Agreement between the U.S., Central America and Dominican Republic (DR -CAFTA).
Since the entry into force in 2006 of the DR-CAFTA, the tip in favor of the U.S. in the trade balance has multiplied by 5.
"The Central America to which President Barack Obama is coming to visit on on Friday is a region that maintains multiple communication vessels with the United States, including a growing trade relationship which in 2012 amounted to $40 billion, although very much in favor of the American power," reported Prensa.com.
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.
With the entry into force seven years ago of the Free Trade Agreement with U.S., Nicaragua's exports to the country have increased by 133%.
The country has become more attractive to investors, it sectors have become technical and Nicaraguan small and medium enterprises have managed to benefit from technical assistance programs.
The products that have been favored the most by the FTA signed by Central America and the Dominican Republic are green coffee, meat, seafood, sugar, textiles and cheese.
Nicaragua now has a surplus of $1 billion and trade with the country has grown by 75% in six years, thanks to the DR-CAFTA, overtaking Guatemala and the rest of the region.
Six years after coming into force and following record levels of growth in trade and investment, Nicaragua has become the region’s unlikely poster child for DR-CAFTA.
Baltodano notes that Nicaragua’s exports to the United States have grown 75 percent in the past six years – more than twice the export growth rate of Guatemala, which is in second place in Central America with 32 percent, and more than four times the export growth of Costa Rica, which joined the party late. Nicaragua now boasts more than $1 billion in trade surplus with the U.S., thanks in large part to CAFTA.
U.S. health authorities have granted sanitary approval for ready to eat products containing beef.
A press release from the Ministry of Foreign Trade reads:
In order to take advantage of the opportunities offered by the North American Free Trade Agreement between Central America and the Dominican Republic (CAFTA-DR), Costa Rica has carried out various tasks in order to be able to export traditional products with higher added value.
Between January and May sales grew by 25% compared to the same period in 2010.
The rise in sales to the U.S. was higher than to countries like El Salvador, Honduras and Guatemala, which increased by 19%, 17% and 13% respectively in the same period.
With the 25% increase, Nicaraguan exports went up from $381.1 million to $476.7 million. This increase in production is confirmation of a growth trend that has been seen for several months.
Ten Salvadoran companies exporting to the Dominican Republic have agreed to forego the 6% subsidy in order to solve the trade issue between the countries.
Dominican Republic trade authorities had indicated that they would retain duties on various Salvadoran products as a response to the protectionist policies El Salvador provides its exporters.
"Most companies that export to the Dominican Republic gave up the 6% subsidy several days ago in order to avoid this problem and try to solve this conflict," confirmed Héctor Dada, Salvadoran Economy Minister, to Laprensagrafica.com.
Despite DR-CAFTA, the Dominican Republic has retained customs duty on various Salvadoran products.
The Dominican Republic's director of Foreign Trade, Yahaira Sosa, indicated that the measures taken are a response to subsidies paid by El Salvador's government to its exporters.
"She explained that the decision to retain the tariffs on paper, card, plastics and juices seeks to ensure a level playing field for bilateral exchange," reports Elsalvador.com.
Costa Rica’s Minister for Foreign Trade met with her Dominican counterpart to explore solutions to the export tariff problems.
Since last year, Costa Rican electrical conductor exporters have been subject to import restrictions and denied preferential customs tariffs.
“The Costa Rican Ministry of Commerce (Comex) claims that this contravenes the free trade agreement signed between Costa Rica, the USA and the Dominican Republic,” writes Nacion.com.