January 27, 2021

Panama appeals WTO ruling in favor of Colombia in tariff dispute

Panama appeals WTO ruling in favor of Colombia in tariff dispute

The Government of Panama reported today that it filed an appeal against a ruling in the first instance of the World Trade Organization (WTO) in favor of Colombia in the framework of the tariff dispute that both countries have maintained for more than a decade.

"Panama maintains its position that the customs measures imposed by Colombia on textiles and footwear represent barriers to trade that directly affect the commercial relationship between both countries," the Ministry of Commerce and Industries (MICI) said in a statement.

A panel of WTO experts ruled on October 5 that Colombia had complied with a previous resolution that required it to withdraw tariffs and obstacles to imports of textiles, clothing and footwear from the Colon Free Zone (ZLC). ), the largest in the continent located in the Panamanian Caribbean.

The panel's decision thus responded to two compliance procedures initiated by each of the countries involved in the conflict, which dates back to 2012, when Colombia began to apply 10 percent tariffs on footwear and textiles and a $ 5 charge. for each container coming from the ZLC.

In 2016, the WTO ruled in favor of Panama and forced Colombia to suspend the mixed tariff, but, according to the Panamanian Government, that rate was replaced by two decrees that tighten customs controls and make it more difficult to import footwear and textiles. coming from the free zone.

Panama requested in February 2017 before the WTO authorization to impose commercial sanctions on Colombia for 210 million dollars.

In the appeal announced on Tuesday, "Panama demands errors in the interpretation of the regulations on import restrictions and customs valuation that were argued in Colombia's request for compliance review," the statement said.

"Although these measures of customs control affect a minority group of products, the ICIM considers that trade must be fluid for all goods and that these should only be valued and controlled according to international standards that Customs of all countries must abide by. "added the ministry.

Employers in the Panamanian free zone ask the government to apply retaliatory measures (reciprocity) to Colombia since the ruling was heard last October and criticize his alleged passivity.

"The ICIM will continue to watch over Panama's best commercial interests both before the WTO and through diplomatic channels," the official statement concluded.

One of the effects of the tariff dispute is the suspension in Panama of the ratification process of a free trade agreement (FTA) with Colombia, signed by the two governments in 2013, after four years of negotiations.


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