Panama files WTO complaint against Colombia on textile tax

20 Jun '13

2 min read

Panama has notified the World Trade Organization (WTO) of a request for consultations with Colombia regarding customs measures relating to the importation of textiles, apparel and footwear, the WTO said in a statement.

Panama has alleged that Colombia’s effective import tariff on textiles and clothing is higher than the maximum allowed as per its WTO membership agreement.

Beginning March 1 this year, Colombia has imposed an additional five dollars per kilo duty on apparel imported from other countries, including Panama, irrespective of the price of the imported product, while reducing the tariff on textiles and apparels from 15 to 10 percent.

The new duty is affecting apparel exporters from Panama’s Colon Free Zone, who are also opposing the proposed Colombia-Panama free trade agreement (FTA), negotiations for which ended recently.

Colombia would have to respond to the request for consultations within ten days and the discussions have to begin within 30 days after being notified, as per WTO procedures.

Unless both parties agree for extension, the consultations have to be completed within 60 days. If the issue does not get resolved during consultations, the parties may request the WTO for establishment of an expert panel under the Dispute Settlement Body of the WTO to resolve the dispute.

Panama has one of the highest economic growth rates in the Latin American region and the country’s economy registered a growth rate of 10 percent last year.

Panama exported US$ 72 million worth of goods, largely consisting of apparel and footwear, to Colombia in 2012.

Fibre2fashion News Desk - India

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