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Tariff Preferences for Nicaraguan Apparel Would be Extended Through 2024 Under New Bill

Monday, June 24, 2013
Sandler, Travis & Rosenberg Trade Report

[Editor’s note: This article originally appeared in the June 13, 2013, issue of the Advisor, a weekly publication of the STR-TAP service, and is reprinted here with permission.]

Sen. Dianne Feinstein, D-Calif., has introduced legislation that would extend for an additional ten years the 100 million square meter equivalent tariff preference level on non-DR-CAFTA-originating cotton, manmade fiber and certain wool apparel from Nicaragua. This TPL is currently scheduled to expire at the end of 2014 but would be renewed through the end of 2024 if Feinstein’s bill is enacted into law.

The bill would also maintain the one-for-one purchasing rule that requires Nicaragua to export to the U.S. one SME of woven trousers made of U.S.-formed fabric of U.S.-formed yarn for every SME of apparel exports entered under the TPL. This provision would continue to apply only to the first 50 million SME of woven trousers entered under the TPL.

Nicaragua currently ships under the TPL about a quarter of its apparel exports to the United States in quantity terms and about 42% in value terms. The expiration of the TPL at the end of next year would create considerable hurdles for the Nicaraguan apparel industry and likely limit its future growth potential.

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