The Colombian government issued Administrative Order No. 1419 on August 6, 2019, announcing that it will increase tariffs on garment products in Chapters 61 and 62 of the tariff code starting from November 3, 2019. , a 37.9% tariff will be levied on garment products with a declared price (FOB) per kilogram equal to or less than US$20, and products with a price higher than this will be levied a 10% plus US$3 tariff.
The current tariff on Colombian garments is 15%. In addition, according to Administrative Order No. 1786 of 2017 (effective until November 2, 2019), the declared import price (FOB) Ready-made garment products equal to or less than US$10 per kilogram are subject to a 40.0% tariff.
This tariff measure was passed by the Colombian Congress and required the executive branch to implement it. However, some industry associations and even the Ministry of Finance still have objections to this, so at present Whether the executive order can be implemented as scheduled remains uncertain.
The Colombian Garment Manufacturing Association (Cccya) stated that the Colombian garment industry is facing the threat of cheap Chinese and African garment products smuggled into the Colombian market through illegal channels. It believes that this administrative The order should take effect immediately to protect the garment industry, which employs 600,000 people.
However, the Colombian National Association of Entrepreneurs (ANDI) and the National Association of Exporters (Analdex) believe that the law is unconstitutional, and Colombian Finance Minister Alberto Carrasquilla also agrees with the 2 associations. The opinion held that tariffs are administrative powers rather than legislative powers, and administrative agencies should be required to implement them without the approval of Congress. They supported that disputes over the order should be referred to the Constitutional Court for decision.
Before the announcement of the order, Colombian Minister of Commerce, Industry and Tourism José Manuel Restrepo also expressed reservations about the tax increase, believing that after the tax increase, domestic garment prices would increase by 25%. It affects nearly 50 million people across the country.
The Colombian National Chamber of Commerce (Fenalco) also opposes measures to increase tariffs on garments, believing that this move will instead encourage the already serious problem of cheap garments made in China. Regarding the issue of smuggled imports, no matter how taxes are increased, smugglers still do not need to pay any tariffs. On the contrary, the price difference between smuggled and legally imported goods will become wider, which may have the opposite effect of encouraging smuggling.
