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Colombia’s Textile, Apparel and Footwear Duties to be Reviewed at WTO

Tuesday, October 15, 2013
Sandler, Travis & Rosenberg Trade Report

The World Trade Organization has established a dispute settlement panel to examine allegations by Panama that Colombia’s import duties on textile, apparel and footwear products do not comply with WTO rules.

Effective March 1, 2013, Colombia implemented a new system under which imports of apparel, footwear and textile made-ups classified in HS Chapters 61, 62, 63 and 64 are subject to a 10% ad valorem duty as well as a specific duty of $5 per gross kilogram (for apparel, textile made-ups and footwear parts of heading 6406) or $5 per pair (for footwear). Prior to this mixed duty system, which is expected to remain in place until at least February 2014, most of these goods were subject to a 15% duty rate.

Panama alleges that Colombia’s new system violates WTO rules because it yields duties higher than those resulting from the ad valorem tariff bound in Colombia’s WTO schedule of concessions and thus appears to accord the affected imports treatment less favorable than that provided for in those concessions. It appears that Panamanian authorities are not concerned about exports of domestically-produced textiles, apparel and footwear to Colombia, which are likely marginal, but rather Asian goods shipped to the Colón free trade zone for subsequent exportation to other Latin American countries, including Colombia.

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