Starting from April the South American country will start implementing a timetable for elimination of the safeguard for balance of payments, reducing the current tariff levels from 15% to 10% and from 35% to 23.3%.
From a statement issued by the Ministry of Foreign Trade in Ecuador:
From April 2017 the schedule for dismantling of the safeguard measure will be implemented for balance of payments, reducing the current tariff levels from 15% to 10.0% and from 35% to 23.3%.In this regard, the reduction will apply to established customs declarations submitted from April 1, 2017.
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.
Factors such as production costs and labor, as well as security and economic stability seem to be more relevant to the textile companies that choose the country than tariff benefits.
The expiry on December 31 of the Tariff Preference Level (TPL) with the United States has not impacted the textile industry, as initially expected at least so far. According to the Nicaraguan Association of Textile and Apparel Industry (Anitec), the country still has attractive conditions for foreign investment in this sector.
Textile companies operating in free zones are preparing adjustments such as reductions in production lines in order adapt supplies in the event of the loss of tariff preference level, or TPL.
Although the timeframe for the expiration of the Tarriff Preference Level system with the United States is December 31, several companies are already starting to take steps to adjust their production in anticipation of the agreement not being renewed.
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%.
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.
In the first nine months of the year $15.9 million worth of footwear was exported, which is 26% more than in 2013.
The sector's competitiveness in terms of labor costs, incentives to industry, preferential access to key markets and strategic location of the country, are the main factors attributed to the growth in exports of Nicaraguan footwear.
The Investment Promotion Agency of Nicaragua, told Elnuevodiario.com.ni that "...
The country wants to take advantage of the tariff preferences it has to export shoes to the United States and the European Union so as to attract foreign investment to the sector and turn it into an export platform.
From a statement by Pro Nicaragua:
All footwear manufactured in Nicaragua has duty free access to the United States, the European Union and other important markets.
Analysis of the impact of the Trans-Pacific Partnership on the region.
The competition which sectors such as textiles could face is one of the elements raising questions among employers in the region, compared to the real benefits that could be accrued if Central America participates in the Strategic Economic Trans Pacific Partnership (TPP).
The presence of direct competitors, such as countries like Vietnam, in the textile sector, and the possibility of losing dominance in the American market due to trade rules that TPP countries must meet, is unsettling the productive sectors in the region and forcing a reckoning of the pros and cons of a possible entry to the block to be undertaken.
The possibility that the United States will not renew tariff preferences for Nicaraguan textiles at the end of the year is forcing the industry to prepare changes to their production schedule.
Although there is a possibility that the United States will grant an extension of the benefits of the Tariff Preference Level (TPL), if they are not renewed, starting January 1st, 2015 the Nicaraguan textile sector may no longer sell to United States products made from raw materials from countries that are not part of DR-CAFTA.
At the first meeting of the Council of the European Partnership Agreement - Central America raised the eventual accession of Croatia and topics related to denomination of origin.
From a press release issued by the Ministry of Economy and Commerce in El Salvador:
On June 27, in San Pedro Sula, Honduras, held the first meeting of the Association Council, the highest institutional body of the Association Agreement between Central America and the European Union, to oversee the fulfilment of the objectives of the Agreement and its application. This meeting was held between Ministers and senior officials, under the trade part of the Agreement.
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.
The president of the Dominican Republic has warned the U.S. government about the impact the Trans- Pacific treaty in the textile sector in the region.
From a statement by the Ministry of Foreign Affairs of the Dominican Republic:
On November 27, President Danilo Medina sent a communication to the President of the United States, Barack Obama, in which it reiterated its concern expressed during the meeting held in San José, Costa Rica, in May, in connection with the negative impact which could come from the Trans- Pacific Economic Partnership Agreement (TPP) on the textile and clothing industry in the signatory countries of the DR -CAFTA and the region, if certain special concessions that could cause changes in the management and values of hemispheric trade, and on a worldwide level.
The U.S. Undersecretary of Commerce stated that Nicaragua no longer needs tariff preferences for its textile industry.
Nicaragua's textile industry could lose tariff preferences in 2014, said an American official who believes that renewal is unnecessary .
"I think that this is an industry that could compete globally today and maintain its position in the market (...) with or without " those preferences, said Walter Bastian, U.S.
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.