Panama has lost an appeal for sanctions against Colombia for failure to comply with a prior ruling on tariffs on clothing, textiles and footwear.
Colombia had initially imposed higher tariffs on garments textiles and footwear imports from Panama because it said the imports constituted “illicit trade” as they were imported at “artificially low prices” in order to launder money.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
In 2016 Panama won a judgement at the WTO to change the tariffs.
Colombia replaced the compound tariff with a 35-40% tariff on textiles, clothing and footwear valued at less than $10 per kilogram, which it argues puts it in compliance with the WTO tariff schedule.
Panama argued the changes did not go far enough to comply with WTO rules, and in a filing in February last year said it wanted to impose $210m of annual trade sanctions on Colombia as a result.
Colombia subsequently called for the WTO to form a panel to investigate its compliance.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThat panel, on Friday (5 October), rejected the claim.
“Panama has failed to demonstrate that the specific bond and the special import regime are inconsistent with the WTO Agreement, the panel concludes that Colombia has implemented the recommendations and rulings of the DSB in Colombia – Measures Relating to the Importation of Textiles, Apparel and Footwear to bring its measure into conformity with its obligations under the WTO Agreement.
“Having found that Panama has failed to demonstrate that Colombia has acted inconsistently with its obligations under the WTO Agreement, the panel considers that no recommendation under Article 19.1 of the DSU is necessary, and makes none.”
