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Nicaraguan textiles may lose US tariff preferences
Aug '13
Textile industry of Nicaragua may lose tariff preferences in the US, which are up for renewal in 2014, as s senior US official has said that such an extension of tariff preferences is not necessary.
The textile industry of Nicaragua could compete globally and maintain its position in the market with or without the trade preferences, Walter Bastian, US undersecretary of Commerce, said at a press conference in Managua.
The Preferential Tariff Regime (TPL) awarded by the US to textile companies operating in Nicaragua’s free trade zones (FTZs) expires in December, 2014.
The TPL allows duty-free export of clothing made of yarns and fabrics from third countries, to US for a maximum of 100 million square meters per year.
The Government of Nicaragua and entrepreneurs of the textile industries are calling for an extension of the TPL until 2024.
The US undersecretary said the ultimate decision is in the hands of the US administration and it has not yet announced an official final position regarding the TPL.
The Nicaraguan Association of Textiles and Apparel (Anitec) estimates that without TPL the production costs would increase by 40 percent and will affect jobs in factories that operate in a free zone.
In 2012, Nicaragua exported more than US$ 890 million in clothing, according to an official data.
Nicaragua has over 215 free zone companies employing more than 103,000 people and these companies together contributed US$ 700 million in Gross Domestic Product, in 2012.
Free zones in Nicaragua are exempt from income tax for the first 15 years of operation and also from sales tax, capital gains, and real estate, among others.

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