CAFTA Multilateralism and the Tuna Industry
Sardimar and Calvo Group are involved in a dispute over tariffs generated by the implementation of the multilateral treaty imposed by the US-Central America Treaty.
Monday, April 20, 2009
The Spanish-owned Calvo Group has a tuna processing plant in El Salvador from which it exports to Costa Rica - among other places - having paid the country a customs duty of 15% until January 2009, and afterwards taking advantage of CAFTA benefits by not paying the tariff for tuna in oil and paying 2.2% for tuna in water. This will obviously hurt the local sales of Costa Rican-owned Sardimar, which is protesting, stating that the situation violates the provisions of the General Treaty of Central American Integration since Calvo Group operates in a free trade zone in El Salvador and is exempt from most national and municipal taxes and Sardimar considers this a subsidy in disguise.
Costa Rica will import raw alcohol from Brazil to dehydrate it and re-export it to the US with zero-tariff, in accordance with DR-CAFTA rules.
Costa Rica's government closed the case after ensuring that Calvo did not incur in dumping affecting the country's tuna industry.
Costa Rica exporters still have a lot of work to do in order to benefit from the FTA, despite the fact that since January 1st their products can enter the US with zero tariff.
Nicaragua is one of the countries which has benefited the most from the Free Trade Agreement.
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