Guatemalan exporters report that President Trump's warning about export tariffs and taxes on remittances and transfers is raising doubts among U.S. buyers.
Uncertainty prevails among most Guatemalan businessmen after President Trump reacted to the provisional protection established by the Guatemalan Constitutional Court, which limits the functions of the Executive Branch to negotiate or sign any foreign policy agreement.
Guatemala's business sector responded with concern to President Trump's warning about imposing export tariffs and levies on remittances and transfers.
The announcement made by the president of the United States comes after the Guatemalan Constitutional Court issued a ruling in which it limits its foreign policy functions to the Executive, by granting a provisional injunction that prevents the negotiation or signing of any agreement.
Arguing that they should protect the local industry from dumping, the U.S. plans to impose temporary tariffs on imports of steel, textiles and footwear.
The tariffs that would be approved through the signing of presidential decrees would be valid for six months, which would be 15% for steel products, and 25% or 30% for imports of footwear and textiles.
Starting from June 30, 2018 products such as stomach, intestines and bladders from Nicaragua may enter the Asian country duty free.
From a statement issued by the Embassy of Taiwan in Nicaragua:
Managua, Wednesday, June 27, 2018.Under the provisions of the Second Free Trade Meeting of the current FTA between Taiwan and Nicaragua, as of June 30, 2018, Decision No. 6 will enter into force, which establishes that Taiwan can import the following bovine products tariff-free: stomach, intestines and bladders, from Nicaragua.
The US government's decision to set a 10% tariff on aluminum imports could have little impact on Central America, which in 2016 exported to the US $25 million worth of this metal.
The possible "trade war" that some US trade partners have warned about and which could be realised with the measure taken by the Trump administration, will be viewed from a distance in Central America.
Goods and services imported from the South American country will no longer incur the "patriotic" tax of 35%, which has been levied since 1999.
From a statement issued by the National Assembly:
With the unanimous approval this March 7, of the Bill Repealing the law creating the tax on Goods and Services of Colombian origin or provenance, Nicaragua opens the door to boosting investment and improving the business climate between the two countries.
January 1 saw the coming into force of a new nomenclature, which extends Tariff System Codes to 10 digits.
The implementation of the Sixth Amendment to the nomenclature of the Tariff Description and Coding System (SAC by its initials in Spanish) and the extension to more digits of codes for goods that are exported and imported was approved by the World Customs Organization (WCO) on June 27, 2014 in order to maintain, in terms of tariff nomenclature, a common language which facilitates international exchange.
Dairy products and some metalworking products, plastics, tires and wood were excluded from the trade agreement between Central America and China.
Bananas will not incur tariffs when entering South Korea for five years, pineapples for a period of seven years and pork for ten years.In addition to the terms of tariff reduction, the countries in the region unilaterally negotiated the exclusion of some goods produced locally.Guatemala announced that it will continue negotiations unilaterally.
Not fearing free trade, lowering tariffs and facilitating business development are some of the ingredients the Chilean export model that Central America could follow.
In an interview with Elfinancierocr.com, ProChile's director, Roberto Paiva, explained that one of the main reasons behind the success of his country's foreign trade model is the high degree of trade liberalization.Not only for having reduced tariffs, but also for"... 'having negotiated trade agreements. We have agreements with Europe and much of Asia. We don't yet have Africa.This opening not only lowers tariffs but brings us closer to the market and the business'. "
On January 1, 2017 the new nomenclature comes into force, which extends codes used in the Tariff System to 10 digits.
From a statement issued by the Salvadoran Association of Industrialists (ASI):
The Salvadoran Association of Industrialists (ASI) held on this day a conference with the aim of informing its members about the implementation of the Sixth Amendment to the nomenclature in the System for Tariff Description and Coding (SAC) and the enlargement to ten digits of the codes for goods that are exported and imported.
Central American coffee will incur 0% tariff in 10 years, while bananas, vegetables and baby vegetables will be shielded from the entry into force of the agreement.
In the fifth round of negotiations which will be held in Seoul from August 8 to 12 it is expected that progress will be made on the definitions for the treatment of 9% of the universe of products that have not yet been analyzed.
The partial scope agreement establishes that sales will not be made using quotas, but based on a list of goods approved by both countries.
The Nicaraguan business sector expects to capitalize on the marketing of products such asrum, cigars, motorcycles assembled in Nicaragua, timber and manufactured goods, and beans, among other things.
The Government and the private sector have laid the foundation for a strategy to follow to apply for formal admission to the agreement and to take advantage of, among other things, "country of origin".
The benefit of"country of origin"that can be taken advantage of by the member countries of the Transpacific Agreement allows the use of raw materials originating in another country to be used as if they were their own. This "... will be beneficial not only for the free zones themselves but also for SMEs."We are talking about the expansion of markets, because Nicaragua is coming to countries with which it does not have this free trade scheme" said the president of the Superior Council of Private Enterprise, Jose Adan Aguerri.
In light of the recent problems in the dairy trade between Nicaragua and Costa Rica, the Central American exporters union advocates eliminating barriers and facilitating trade.
Elsalvador.com reports that "...Taxes on perfumes in customs offices in Honduras, problems with entry of frozen goods into Costa Rica, meat and dairy going from Nicaragua into Honduras, beef and chicken from Panama to Costa Rica and impediments to the free marketing of milk and dairy products between Costa Rica and Nicaragua are some of the problems that are hampering business growth in the region. "
The Colombian government has reduced tariffs to 0 on imports of lentils, beans and garlic, and suspended the price band for crude and refined oils.
From a statement issued by the President of Colombia:
The National Government has approved a reduction to 0% on tariffs on the import of lentils, beans and garlic, and has temporarily suspended the price band for crude and refined oils, which will ease the cost of the food basket for Colombians during the first half of 2016.
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