Nicaraguan industrialists pay more than their competitors in other Central American countries for the Colombian raw material they consume.
The 35% charged for "patriotic duty" on imported products from Colombia is affecting the performance of the productive sector and taking away competitiveness from Nicaraguan in the region. The business sector is once again demanding the elimination of the tariff particularly for the materials purchased by industrial companies.
The agreement that allows Nicaraguan products such as food and construction materials to enter the island with tariff preferences up to 100% has come into effect.
The Ministry of Foreign Trade and the Ministry of Finance and Prices in Cuba has approved the entry into force of the trade agreement signed in March, in which tariff preferences of different grades are established on products such as food, construction materials, accessories and utensils.
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.
The guild is analyzing looking for new markets to buy raw materials for the manufacture of textiles, if the US does not renew the tariff preferences.
The Tariff Preference Level (TPL) expires on December 31 and if it is not renewed the Nicaraguan textile industry will be looking for new suppliers such as India, China and Chile, which have lower supply than in the United States.
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.
Due to a reduction of local production because of drought, the government has authorized, for the second half of the year, an increase in tax-free imports of red beans, rice and corn.
In the case of red beans, an additional 10,000 tons has been approved on top of the 20,000 authorized in June, while for rice the quantities will be defined in the coming days.
A statutory amendment will allow Brazil to use a World Trade Organization quota to export beef to the United States.
Nicaraguan producers and exporters have raised concerns about the possible impact of changes in trade policies which are being discussed by the U.S. Congress, which directly affect the export of peanuts, tobacco and meat, the latter product due to possible entry of beef from Brazil.
The government will manage 95% of the maize authorized to be imported duty free from any member country of the World Trade Organization.
"... The remaining 5% will be distributed under a "first come first served" basis until the available volume of each quota runs out," says an agreement of the Ministry of Development, Industry and Trade, as reported by Eleconomista.net.
The government will control 95% of the 20 tons of red beans that have been authorized for duty-free purchase from any country which is a member of the World Trade Organization.
The remaining 5% will be distributed "... on a first come, first serve basis, until the available volume of each quota runs out," says ministerial agreement 025-2014 as reported by Laprensa.com.ni .
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 Association of European Banana Producers has proposed extending the community production model until 2020 in order to face competition from Central America.
From a statement issued by the Costa Rican Foreign Trade Promotion Office:
European banana producers seek to strengthen position in light of Latin American exports
The Association of European Banana Producers (APEB) has advocated maintaining Community production , its acres and producer income until 2020, and notes that "they will take the necessary measures to counter the agreements of the European Union (EU) and Latin American countries that ignore the state of food security and the environment. "
The agreement approved by the National Assembly of Nicaragua allows entry into the Cuban market of products such as meat, milk, honey and black beans.
The agreement, which aims to extend preferential entry of goods into Cuba, includes tax treatments and sanitary and phytosanitary measures to be observed in the exchange of products.
"The agreement, which was approved by a vote by 81 MPs from both the ruling party and the opposition, had been sent "to emergency procedure" by the executive branch, headed by Daniel Ortega, revealed the National Assembly through its press service . "