CITA Announces Reduction in Nicaragua TPL for 2013

The Committee for the Implementation of Textile Agreements has announced a reduction in 2013 TPL for Nicaragua to 98,447,866 square meters equivalent to account for the shortfall in meeting the one-to-one commitment for cotton and man-made fiber woven trousers exported from Nicaragua to the United States

Background: Annex 3.28 of the CAFTA-DR establishes a Tariff Preference Level (TPL) for non-originating apparel goods of Nicaragua. Section 1634(a)(2) of the Pension Protection Act references the exchange of letters between the United States and Nicaragua, which establishes the one-to-one commitment for cotton and man-made fiber trousers. Section 1634(c)(2) of the Pension Protection Act authorizes the President to proclaim a reduction in the overall limit in the TPL if the President determines that Nicaragua has failed to comply with the one-to-one commitment. In Presidential Proclamation 8111, the President delegated to CITA the authority to determine whether Nicaragua had failed to comply with the one-to-one commitment and to reduce the overall limit in the TPL.

In an exchange of letters dated March 24 and 27, 2006, Nicaragua agreed that for each square meter equivalent (SME) of exports of cotton and man-made fiber woven trousers entered under the TPL, Nicaragua would export to the United States an equal amount of cotton and man-made fiber woven trousers made of U.S. formed fabric of U.S. formed yarn. Any shortfall in meeting this commitment that was not rectified by April 1 of the succeeding year would be applied against the TPL for the succeeding year. For 2012, the shortfall in meeting the one-to-one commitment is 1,552,134 square meters equivalent. This amount is being deducted from the 2013 TPL, resulting in a new TPL level for 2013 of 98,447,866 square meters equivalent.