After Grupo Lala decided to close the operations of its dairy production plant in Costa Rica, a debate began over whether Dos Pinos' dominance in the local market was due to protectionist policies or to the brand positioning, quality and price of its products.
Currently, transporting goods by sea between Central American countries can increase freight costs by at least 60% compared to the land option, which represents an obstacle to changing the way goods are transferred in the region.
As a result of the closure of the Penas Blancas customs crossing, on the border between Costa Rica and Nicaragua, some businessmen in the region had to resort to the sea route in order to deliver their orders.
Since January 1, 2020, Nicaraguan authorities have been charging $25 for the electronic processing of the Single Central American Transit Declaration, a cost that exceeds by 233% what was paid until the end of 2019.
Until December 31 last year, the General Directorate of Customs Services (DGA) charged $7.5 for the Single Central American Declaration in Transit (DUCA), but with the new provision of the authorities, the cost increased by $17.5 for 2020.
The costs incurred by businessmen in Nicaragua, because of excessive procedures and low efficiency of foreign trade systems is 25% additional to the value of the goods, while in El Salvador and Costa Rica, amounts to 18% and 16%, respectively.
A study by the Economic Commission for Latin America and the Caribbean (ECLAC) specifies that the costs paid by businessmen in Nicaragua, because of excessive procedures and low efficiency of foreign trade systems is 25.3% additional to the value of the goods, followed by El Salvador with 18.3%, Costa Rica with 16.3%, Honduras with 15.8%, Guatemala with 14% and Panama with 9%.
The slowdown in domestic consumption in Costa Rica, together with the local currency depreciation, will cause customers to buy fewer high-end technology products.
In the report published by the Central Bank of Costa Rica (BCCR) called the October-2018 Economic Situation Report, it is explained that the slow increase in credit, imports of final consumer goods and tax collection are clear indicators of a slowdown in domestic demand. See full report.
The rise in fuel prices in recent years, together with the depreciation of the local currency has caused production costs to rise for domestic industry.
Between September 2015 and the same month in 2018, the average price of a barrel of imported fuel in the country went up from $54.9 to $83.7, which is equivalent to an increase of 52% in the last three years.
In Costa Rica, the law on incentives to import these types of vehicles has been in force for six months, but agencies are not able to take advantage of the exoneration because the Treasury has not yet adapted its customs computer system.
Although the "Law of Incentives and Promotion for Electric Transport" came into force six months ago, distributors are still facing obstacles to complete the importation processes under the new tax benefits scheme.
In the South American country a rule has been published that establishes that costs and expenses incurred during transportation of goods by air must be borne by the importers.
From a statement issued by the Foreign Trade Promotion Office of Costa Rica (PROCOMER):
On October 11, the Ministry of Transport and Communications (MTC) of Peru issued a rule that the costs and expenses incurred during transportation of goods by air will be borne by the importers.
Central American countries need to implement a series of improvements in customs procedures in order to meet the requirements of the agreement for the facilitation of international trade.
Within two years, as part of the commitments made in the 2001 Doha Round of the Bali Agreement, signed in 2013 by 160 nations belonging to the World Trade Organization (WTO), including Central America, governments will have to harmonize their customs systems ensuring trade facilitation. However, to date institutional progress on issues established by the Agreement such as simplification, harmonization and automation of procedures for international trade have not happened, particularly in relation to the requirements and formalities for import, export and transit of border freight.
The term of the decree allowing the border areas of Mexico to import goods at a significantly lower charge than in the rest of the country has been extended for three years.
According to the Mexican Finance Minister, Luis Videgaray, the decree was scheduled to end on Decemnber31 December, however, the term has been extended for another three years.
The World Trade Organization aims to reduce by half the costs added to products as they pass through customs offices.
An article in Elfinancierocr.com reports that "... all WTO members recognize that progress can be made in cutting costs associated with inefficiencies in order to make trade more efficient."
Under pressure from importers the government has lowered taxes for importing used motor vehicles, but diluted the reduction by increasing the notional taxable value.
Car dealers in Costa Rica are asking for the establishment of a new formula for calculating taxes on used vehicles.
Cars between 0-6 years old will incur a 30% selective excise tax with a tax burden of 53%, and those over 6 years old will incur a tax of 48% and have a tax burden of 73%.
From a press release from the Ministry of Finance in Costa Rica:
Sellers of used cars in Costa Rica believe there is discrimination in the way the Ministry of Finance estimates import taxes on cars.
According to Jose Carballo, president of the Costa Rican Automotive Chamber, the industry complains that 52% is charged for new vehicles, while used cars which are over six years old are charged 79%.
Operating Company dedicated to the manufacture of gluten-free and sugar-free products, OHNE brand. The OHNE brand has 8 product lines: square bread, sweet...
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