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Colombia Ignores WTO Ruling, Maintains Tariffs on Panama Imports

By: Julián Villabona Galarza - Aug 1, 2016, 4:21 pm
Colombia violates WTO ruling and maintains tariffs on Panama footwear and textiles (Pexels)
Colombia violates WTO ruling and maintains tariffs on Panama footwear and textiles (Pexels)

EspañolColombian Finance Minister Mauricio Cardenas and the Minister of Commerce Maria Claudia Lacouture announced Sunday, July 31 they will be maintaining tariffs on footwear and textiles imported from Panama to Colombia.

The decision reportedly goes against World Trade Organization (WTO) policy.

According to a WTO ruling, Colombia should have eliminated tariffs imposed against Panamanian products in 2012 — a decision made with the aim of protecting Colombian producers from the low price of textiles and footwear from the Colón, Panama. Since then, Colombia has charged a tax of 10 percent plus a fine of US $5 for each imported container.

According to the decree, the new measure will help combat money laundering and is therefore justified as protecting public morals.

Shoes enter Colombia from China and sell between 30 and 50 cents, but they must first pass through Colón. Colombian producers of shoes reportedly consider the 35 percent maximum tax allowed by the WTO to be insufficient for protecting their products from the competition of imported products.

President of the National Federation of Merchants of Colombia (Fenalco) Guillermo Botero Nieto said he thinks merchants are the most effected by the protectionist measure, as prices of footwear products and textiles will increase and thus discourage consumption.

Colombian businessmen reportedly said they will respect the agreements reached with Panama and the WTO, but requested a solution that doesn’t continue to affect different sectors of the economy.

Sources: El Tiempo, Portafolio

Julián Villabona Galarza Julián Villabona Galarza

Julián is a reporter with the PanAm Post with studies in Politics and International Relations from the University Sergio Arboleda in Colombia. Follow him: @julianvillabona.