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Panama Files Complaint Against Colombian Textile Tax with WTO

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The World Trade Organization (WTO) has announced an official complaint from the country of Panama, requesting mandated consultations with Colombia. Panama alleges that Colombia has imposed taxes on imported textiles, apparel, and footwear that are above WTO guidelines.

Beginning in March of this year, Colombia has instituted a $5, flat-rate fee on any apparel imported to Colombia from outside countries, offering a compensatory reduction (from 15% down to 10%) on taxes of textiles and apparel. Apparel exporters in Panama’s Colon Free Zone have been negatively affected by the new arrangement, and have now drawn the flat-rate fee to official WTO attention.

Once a country with WTO membership has requested consultation with another, the second party has 10 days in which to respond, and must instigate discussions within 30 days of the request. The two countries then have 60 days to resolve their issue, after which both must either agree to an extension, or request a final decision from the WTO’s Dispute Settlement Body.

Last year, Panama exported goods worth $72 million to Colombia, the majority of which was apparel and footwear.

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