The impact that the crisis will have on companies related to the textile, leather and clothing sector in Central America is estimated to be explained, to a greater extent, by the expected drop in sales of carpets and curtains.
The "Information System for the Impact Analysis of Covid-19 on Business", developed by the Trade Intelligence Unit of CentralAmericaData, measures the degree of impact that the crisis will have on companies according to their sector or economic activity, during the coming months.
Panama appealed against the first instance ruling, which concluded that Colombia's restrictive customs control measures do not violate WTO rules.
From the statement of the Ministry of Commerce and Industries of Panama:
November 20th, 2018. The Ministry of Commerce and Industries (MICI) on behalf of the Government of Panama filed an appeal against the first instance ruling that found that the restrictive customs control measures implemented by Colombia do not infringe the rules of the World Trade Organization (WTO). In this appeal, Panama claims errors in the interpretation of the rules on import restrictions and customs valuation that were argued in Colombia's request for review of its compliance with the judgments in Panama's favor.
The WTO decided that Colombia has complied with a resolution that required it to remove tariffs and restrictions on imports of textiles, clothing and footwear from the Libre de Colón zone in Panama.
The conflict arose after a complaint by Panama after Colombia imposed a tariff on textiles and footwear from the Libre de Colón Zone. The dispute began more than five years ago.
The complicated situation happening in the country since mid-April has forced nearly 70% of SMEs in the textile and clothing industry to suspend their operations.
According to information from the Chamber of Industries of Nicaragua (Cadin), 30% of small and medium size textile and clothing companies that are producing are doing so at 25% of their capacity.The situation in the sector has led to the temporary suspension of eight out of ten workers.
The business associations of both countries started working on a joint plan to solve a problem that has been causing them damage for the last six years.
Representatives from the Chamber of Commerce, Industries and Agriculture of Panama (Cciap) and members of the Chamber of Commerce of Bogotá, initiated talks to develop a joint plan to end the conflict that has affected them since 2012.
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.
The Panamanian government has decided to increase, in some cases by up to 30%, import tariffs on several products, including flowers, cement and bituminous coal, most of which are imported from the South American country.
According to a Cabinet Decree published on January 10 in the Official Newspaper, the Panamanian government decided to modify several fractions of the National Import Tariff, taxing at 30% imports of roses, carnations, chrysanthemums, calla lillies, astomerias, gladiolas and "flor de confite" (Calyptronoma plumeriana (Martius) Lourteig), which mostly come from Colombia.
If the request by the Panamanian Ministry of Commerce and Industries is approved, a new tax of up to 40% could be established on the dividends distributed by Colombian companies.
The South American country has extended the tariff of 35% and 40% on imports of footwear and textiles, respectively, for two more years, further complicating the outlook for companies in the Colon Free Zone.
Up until November 2019, the Colombian government will continue to apply the 35% tariff for footwear and 40% for textiles that enter the country at a value equal to or lower than a predetermined threshold.
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."
A deferral has been made for a compliance panel which was requested by Panama to verify whether or not Colombia has complied with the WTO ruling in the dispute over Panamanian textile and footwear tariffs.
Laestrella.com.pa reports that "...Panama called on the World Trade Organization (WTO) to establish a panel to determine whether or not Colombia complied with the organization's ruling which put pressure on Bogotá to withdraw a tariff on imports of Panamanian textiles, clothing and footwear."
A WTO panel must now verify whether Colombia has complied with the ruling that forced it to suspend the collection of tariffs on imports of textiles and footwear coming from Panama.
With this new stage in the process being undertaken by both countries to try to resolve the tariff dispute, the final solution could be farther off than expected, since according to the World Trade Organization itself, the decision by the verification commission could take up to three months.
The South American country has until 22 January 2017 to implement the recommendations and rulings established by the Dispute Settlement Body of the WTO.
The announcement of the WTO comes after Colombia announced the replacement of the controversial mixed tariff by a threshold of $10 / kg for clothing and between $6 and $10 per pair of shoes, and the temporary application of maximum tariffs of 40% and 35%, respectively and above that threshold, a tariff of 15%.
Colombia is replacing the controversial mixed tariff with a threshold of $10 / kg for clothing and between $6 and $10 per pair of shoes, and will temporarily apply the maximum tariffs of 40% and 35%, respectively, and above the threshold, a tariff of 15%.
The Panamanian government has expressed its opposition to the new measures implemented by Colombia.The Minister of Commerce and Industry, Augusto Arosemena said the neighboring country"... can not adopt in parallel through supposed customs controls, measures which violate other obligations on market access and customs valuation, still less substantiate them using arguments that were rejected in two legal cases, as the supposed justification of enforcing laws on money laundering.
An end has been reached to the additional time period requested by Colombia to continue charging the 10% tariff on textiles and footwear coming from the Colon Free Zone, but it is not known whether they will continue to implement the measure.
The World Trade Organization (WTO) ruled in favor of Panama and ordered Colombia to stop charging the tariff, but despite this, the South American country extended the measure until November.