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40% Tariff on Clothing Imports: Colombian Government’s New Proposal

Arancel del 40 % para importación de confecciones: la nueva propuesta del Gobierno colombiano, EFE

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The Colombian government is considering a 40 % tax on clothing imports to stimulate domestic industry, an initiative that has caused controversy in the country because, according to some experts, it could be counterproductive.

A draft presidential decree issued Wednesday for consultation notes that a meeting of the Customs, Tariff and Foreign Trade Affairs Committee on 26 October recommended “taking tariff measures” on the import of clothing.

This measure seeks to “promote a balance in international trade, greater generation of added value, competitiveness, employment – especially for women – and productivity in the national clothing industry.”

Thus, the decree orders to modify another one of December 2021, “to establish a 40 % ad valorem tariff on imports of any most favoured nation (MFN) origin for products classified in chapters 61 and 62 of the National Customs Tariff”, which corresponds to textiles and their manufactures.

“This tariff on clothing imports will allow Colombia’s clothing industry to soar,” Colombian President Gustavo Petro said in a message on Twitter.

However, trade experts questioned the effectiveness of the measure.

“An industry that, with the dollar at 5,000 pesos, requires a 40 % tariff is in serious difficulties and not precisely because of imports,” explained the president of the National Association of Foreign Trade (Analdex), Javier Díaz Molina, on the same social media platform.

For economist Jorge Restrepo, associate professor at the Universidad Javeriana, the decree published for consultation is “inconvenient and untimely” because it “severely affects the consumer and will increase inflation”, adding that other countries will surely retaliate against Colombia.

The executive president of the Colombian-American Chamber of Commerce (Amcham), María Claudia Lacouture, considered that the “tariffs that raise clothing prices” add “more shadows to the economic scenario” of the country.

Lacouture, a former minister of trade, industry and tourism, said on Twitter that this measure is in addition to the tax reform “that impacts employment and increases food prices” in a country where the “unbridled dollar affects the entire economy”, to which “inflation and high (interest) rates” are added.

However, the Colombian Chamber of Clothing and Allied Industries thanked Petro “for betting on national industry and employment” and added: “when we import a garment, ultimately what we are importing are minutes of labour that are lost in our country.”  

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