Because yellow corn is imported from the United States at a price of $11 per quintal in Nicaragua and the cost of producing a quintal of sorghum locally is $12.5, competition for local producers is nearly impossible.
Nicaragua is part of the Dominican Republic-Central America-United States Free Trade Agreement, an agreement that allows yellow corn from the United States to enter the local market free of tariffs.
Following in Brazil's footsteps, Canada warned the WTO about the possibility of imposing compensation against the Costa Rican authorities' policy of raising the tariff on imported sugar from 45% to 73%.
Following an appeal filed by the importing company La Maquila Lama with the Costa Rican authorities, the government decided to reduce the additional tax on sugar purchased abroad from 34.27% to 27.68%.
With the reduction decreed by the Ministry of Economy, Industry and Commerce (MEIC), a decision that was published on August 18 in The Gazette, the total tax applied to imported sugar will be 72.68% (45% original plus 27.68% of the safeguard), which is slightly less than the 79.27% (45% original plus 34.27%), which was in force until before the enacted amendment.
In Costa Rica, sugar producers are asking the government to raise tariffs or entry taxes on imports, and importers are opposing, as this would raise the final price to the consumer.
In July 2019, the Sugar Cane Industrial Agricultural League (LAICA) asked the Ministry of Economy, Industry and Commerce (MEIC) to launch an investigation with the aim of imposing additional tariffs on imported sugar, arguing that purchases from abroad would damage local production.
As part of the FTA signed between the two countries, since January 1, 2020 beef and pork from the U.S. do not pay tariffs or taxes on entry into Costa Rica.
According to the Free Trade Agreement signed, the relief of beef and pork will be valid for 15 years, while the so-called black parts of the chicken, such as thighs and others, will be released until January 1, 2022, in this case for the term of 17 years.
Until 31 December 2019, yellow corn may be imported duty-free, and from 1 January 2020, a tariff rate of 40% will apply.
For the decision, the government argued in the decree published in the Gaceta that "... the production of meat, milk and eggs is produced, for the most part, from corn-based feed, which represents a little more than 65% of the total cost of meat production, especially in the production of chickens and pigs.
From January 2016 import tariffs will start to be phased out on chicken, rice and milk from the USA, reaching 0% in 2022 and 2025, under the DR-CAFTA agreement.
In Costa Rica local producers say they have been preparing for this for several years, but the country's loss of competitiveness due to high production costs and lack of action by the government to improve on this might prevent them from competing on equal terms.
High production costs, coupled with the progressive reduction in the tariff paid on yellow corn from the United States, are keeping sorghum producers in the country in a state of check.
With the gradual elimination of import yellow corn from the United States, established in DR-CAFTA, a 0% tariff will be reached in 2020, a rate which currently stands at 10.1%.
On October 1 there will be an auction in Panama of the duty free import of 2000 metric tons of nonfat dry milk, 17,000 tonnes of whole milk powder and 45,000 tonnes of maize.
Through the National Commodity Exchange (Baisa) the remainder of the 2014 trade promotion treaty (TPC) quota with the United States will be auctioned. The auction is scheduled to be start at 10:00 am.
The government has authorized a reduction from 40% to 0% tariffs on imports of corn until December 31, 2014.
From Cabinet Decree 27 of August 5, 2014 published in the Official Newspaper La Gaceta 27598-B:
"There is a need to temporarily modify the tariff duty on imported maize in order to reduce the cost of importing one of the main ingredients for the production of animal feed (...
The government has authorized the purchase of 9000 tons of red beans without tariffs until 31 October.
The permission granted by the Council of Ministers for Economic Integration (COMIECO) to the government of El Salvador will be valid until 31 October for the acquisition of up to 9000 tons of red beans from countries such as Colombia and Mexico.