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Colombia's tariff change affects Chinese garment exports
Mar '13
The South American nation of Colombia has begun implementing its 1-year tariff adjustment policy from March 1, 2013.
Under the revised policy, the ad valorem tax on imports of clothing has been reduced to 10 percent from the earlier 15 percent. However, the policy also introduces an additional volume-based tariff of US$ 5/kg, initially for a period of one year.
The adjustment in tariff policy is intended to control the volume of apparel imports from other countries, especially China, and thereby protect the domestic industry that makes similar products.
The new tariff rates are applicable to China's knitted or crocheted garments and clothing accessories under Chapter 61, non-knitted or crocheted clothing and accessories under Chapter 62 and other textile products under Chapter 63.
China's exports to Colombia under chapter 61 to 63 totaled approximately US $321 million in 2012, an increase of 21.49 percent year-on-year in value, and an increase of 20.73 percent in volume.
According to statistics from Colombian customs, China was the largest exporter of garment and textile products that fall under chapters 61 to 63 to Colombia, followed by Ecuador and Indonesia.
Owing to weak demand in major markets of the US and the EU, several export enterprises had shifted their focus to Colombian market, as it being one of the emerging export markets.
The imposition of new volume-based tax would imply a levy of about 30 percent on about 300 grams of clothing, which not only nullifies the benefit of the 5 percent decrease in ad valorem tax, but imposes an additional burden on Chinese exporters.

Fibre2fashion News Desk - China

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