Nicaragua has been proposed to maximize the advantages of the DR-CAFTA, is also working to expand trade with Mexico through NAFTA with Canada and through negotiations, which together with the other countries of Central America are taking out.
Furthermore, Nicaragua is currently working on bilateral talks with Venezuela, Bolivia, Argentina and Brazil for access to these markets and become a springboard for taking advantage of markets in the South. Nicaragua is committed to become the link between North and South.
At this time Nicaragua has existing free trade treaties with the following countries: United States of America, Central America and Dominican Republic (DR-CAFTA), Mexico and Taiwan. Is in final stage negotiations with Canada and has begun negotiations with the European Union.
To date, the DR-CAFTA in Nicaragua has had its main impact in the area of Free Zones in the textile sector.
By DR-CAFTA Nicaragua has:
- Engaging in business with the largest market in the world: USA
- Encourage the attraction of investment capable of creating new work places
- Search for the successful insertion into the globalized world markets
What was achieved in the zones?
In textiles and clothing were found a unique and differentiated treatment, privileged in relation to the rest of the region. Nicaragua receives a portion of all privileges granted to the countries of Central America. But on the other hand, in addition to the exports of those products that comply with the rule of origin entering the U.S. market duty-free entry into force of the Treaty, Nicaragua was the only country that received the benefit of TPL allows preferential access to the market in the United States of America for clothing made with fabric or yarn originating from countries not part of the DR-CAFTA. This benefit covers a total of one hundred million square meters equivalent per year and lasts for 9 years after entry into force of the Treaty. In TPL is intended to expand existing industry and use it as a tool to move from a basic industry to a more vertically integrated value-oriented, fashion and design.
Earnings above will have a positive impact in the industry, allowing a transition period during which efforts will focus investment towards complementing the textile industry (production of fabric). This will result in increasing employment and generating greater added value to the economy. It will also enable the transition to the scheme of complete package, enabling the production of the garment and all its components and encourage investments in both processing zone regime as normal.
It is important to emphasize that the clothing sector is a very dynamic sector in our country in recent years, so that agreements reached at the same generous incentives to attract investment to increase employment, added value and contribute to the integration of sector.
Nicaragua was served after the DR-CAFTA negotiations with the preferential tariff arrangements "TPL" unique to our country. This benefit will allow preferential access to markets for United States of America for clothing made with fabric or yarn originating in the countries of the DR-CAFTA. Because the benefit of the TPL does not provide complete coverage of the country's exports, mathematical formulas are designed to distribute the allocations on an equitable, transparent and impartial. The annual total of TPL for the country (100 million) will be divided as follows: 70% is distributed among the established companies and 30% are allocated to new (less than one year of operation) and expansions of businesses established.
For the allocation of business clothing, considered the following criteria:
- Value of the exported product by category.
- Value of exported tariff category.
- Content job category exported.
In the case of textile companies, the allocation is based on the following criteria:
- Level of Integration.
- Amount of Investment.
- Level of Production
Administrative Scheme to regulate the profit of the TPL is the following:
MIFIC: Gives the regulations governing the administration of TPL for the whole textile apparel industry nationally.
CNZF: Approves the Regulations. Allocation of quotas to enterprises in accordance with the regulations.
Monitoring of implementation and policy management.
Technical Committee: Advises the CNZF, Textiles Monitoring Office Administrator.
Office Manager Textile (OAT): Supports the National Commission of Free Zones in the administration and operational implementation.
Regulation of TPL will aim:
- To regulate the procedures for distribution and administration of the tariff treatment provided for in Chapter 3 of the DR-CAFTA.
- Mechanisms of distribution through mathematical formulas.
- Sanctions.