A group of Democratic senators proposed a law to eliminate tariffs on textile products from 14 Asian countries.
Textile imports from those countries currently pay up to 28% when entering the United States.
Should the proposal be approved, a very likely scenario, the Central American countries would lose the trade advantage obtained with the U.S. free trade agreement, as production costs are lower in Asian countries, because of lower social costs and cheaper energy.
Despite pressure from industry groups, the government of Costa Rica will not advance in the tariff harmonization of products considered "sensible".
The negotiation of the Free Trade Agreement between Costa Rica and China has raised alarm and protests from the Chamber of Industries and the Chamber of Food Industry, who request a 100% tax relief for central american trade in order to be competitive.
In addition to plastics, the European Union made concessions in chocolate, palm oil, fertilizers and chemicals.
According to the flexibility incorporated into the Association Agreement between Central America and the European Union, enterprises in the region may include materials from outside into products that are then exported to Europe under the tariff regime established in the Agreement.
The proposal of the European Union is to lower the current tariff from 176 to 114€ per ton between 2009 and 2019.
According to Nacion.com, "European Trade Commissioner Catherine Ashton acknowledged yesterday that a reduction of banana tariffs is 'inevitable' because that is the way it was established by judgments from the World Trade Organization (WTO)."
The proposal from the EU is similar to the one presented in 2008 in the OMC, extending to 10 years the time period for the reduction of the tariff from 176 to 95 euros per ton.
The Central American countries insist that the European Union should improve its proposal on the issue of the banana just as much as on the issue of sugar.
La Prensa Grafica publishes in its website: "The proposal of the European Union to settle the lawsuit maintains the objective of lowering the tariff by 62 euros per ton, which was agreed upon in 2008, but instead of reaching it in a step-by-step manner from here to 2016, it is postponed to obtain it gradually in 2019, thus, expanding the time period of tax exemption."
From the 11th to the 13th of February, advancement will be pursued regarding the integration of customs and the duties for bananas and sugar, issues still pending in the negotiations with the EU.
PrensaLibre.com publishes in its website: "The Vice President and Panamanian Chancellor, Samuel Lewis Navarre, declared that there still is not a concrete date scheduled for the next round that Central America and the EU will coordinate in an attempt to achieve progress in negotiations and to conclude the talks next May, as they have had anticipated."
The tariff reduction proposal presented by the EU within the framework of the negotiations for the Agreement of Association does not satisfy Central American
Nacion.com reports: "The Costa Rican Minister of Foreign Trade, Marco Vinicio Ruiz, did not provide details on the European proposal as they are still in negotiations and the Isthmus has to respond this week.
Mexico modified its tariff system for the northern and southern border, with 0% tariff for 1,342 goods and 5% for another 393.
According to the PrensaLibre.COM / EFE article: "The measure will be in place on January 1st 2009, and will remain active for 5 years, until the last day of 2013".
Sugarcane planted area in El Salvador for 2007/08 decreased 3,000 hectares compared to 2006/07, dropping to 57,000 hectares.
However, sugar recovery yields increased during the 2007/08 harvest mainly due to favorable weather conditions, according to a U.S. Department of Agriculture attache report posted Tuesday on the Foreign Agricultural Services Web site.
Central American coffee growers have agreed to stay out of the negotiations for a trade agreement with the European Union.
The best gain from the tariff removal would be for toasted coffee which only represent 1% of exports.
In addition, the EU continues to demand the implementation of a flexible rule of origin for coffee, while the Central American want the rule of origin for the grain to be strict, so that the origin of the coffee should be the place where it is grown and harvested.
The EU has committed to providing an offer for banana before December.
The European commitment was secured in the fifth round of negotiations for an Agreement of Association between the EU and Central America carried out from October 6 to 10 in Guatemala City, reported the Minister of Comex, Marco Vinicio Ruiz.
The objective of banana negotiations is to reduce the tariff or duty that the EU charges on this fruit which is at 176 euros ($222) per tonne.
The US extended the tariff benefits and market access to textile and tuna companies for two more years - until September 2010.
These commercial advantages were established in 2000 in an expansion of the so called Caribbean Basin Initiative (CBI).
The extension of these benefits was included in the Farm Bill which was passed by the American Congress last June. The bill is a package of internal agricultural aid.
At Tuesday's opening of the fourth round of Central America-Europe trade talks in Brussels, Europe granted preferential treatment to a list of Central American products and consolidated 99 percent of its offer.
Johanna Hill, spokesperson for the Central Americans and chief negotiator for El Salvador, said Costa Rica, the country that sells the most to Europe, insists that current access is not reflected in the offer.