While the majority of tariffs are levied on an ad valorem basis, Argentina also charges compound rates consisting of ad valorem duties plus specific levies known as “minimum specific import duties” (DIEMs) on products in several sectors, including textiles and apparel, footwear, and toys...and the government of Argentina has not formally extended them, they are still being charged.
Argentina imposes a growing number of customs and licensing procedures and requirements, which make importing U.S. products more difficult. The measures include additional inspections, restrictions on entry ports, expanded use of reference prices, import license requirements, and other requirements such as importer invoices being notarized by the nearest Argentine diplomatic mission when imported goods are below reference prices. Many U.S. companies with operations in Argentina have expressed concerns that the measures have delayed exports of U.S. goods to Argentina and, in some cases, stopped exports of certain U.S. goods to Argentina altogether.
In December 2010, Argentina reintroduced an import prohibition on used clothing, which is due to expire in 2015. In August 2012, the Argentine tax authority (Administración Federal de Ingresos Públicos or AFIP) issued Resolution 3373, which increased the tax burden for importers because the taxes are charged after import duties are levied. The value-added tax (VAT) advance rate rose from 10 percent to 20 percent on imports of consumer goods, and from 5 percent to 10 percent on imports of capital goods. The income tax advance rate on imports of all goods increased from 3 percent to 6 percent, except when the goods are intended for consumption or for use by the importer, in which case an 11 percent income tax rate applies.
Customs External Notes 87/2008 of October 2008 and 15/2009 of February 2009 established administrative mechanisms that restrict the entry of products deemed sensitive, such as textiles, apparel, footwear, toys, electronic products, and leather goods. While the restrictions are not country specific, they are to be applied more stringently to goods from countries considered “high risk” for under-invoicing, and to products considered at risk for under-invoicing as well as trademark fraud.
Ports of Entry
Argentina restricts entry points for several classes of goods, including sensitive goods classified in 20 Harmonized Tariff Schedule chapters (e.g., textiles; shoes; electrical machinery; iron, steel, metal and other manufactured goods; and watches), through specialized customs procedures for these goods.
Certificates of origin have become a key element in Argentine import procedures in order to enforce antidumping measures, reference prices (referred to as “criterion values”), and certain geographical restrictions. In August 2009, AFIP revised through External Note 4 the certificate of origin requirements for a list of products subject to non-preferential tariff treatment for which a certificate of origin is required. The products affected include certain organic chemicals, tires, bicycle parts, flat-rolled iron and steel, certain iron and steel tubes, air conditioning equipment, wood fiberboard, most fabrics (e.g., wool, cotton, other vegetable), carpets, most textiles (e.g., knitted, crocheted), apparel, footwear, metal screws and bolts, furniture, toys and games, brooms, and brushes. To receive the most favored nation tariff rate, the certificate of origin must be certified by an Argentine consulate or embassy. For products with many internal components, such as machinery, each individual part is often required to be notarized in its country of origin, which can be very burdensome. Importers have stated that the rules governing these procedures are unclear and can be arbitrarily enforced.
Brazil imposes relatively high tariffs on imports across a wide spread of sectors, including automobiles, automotive parts, information technology and electronics, chemicals, plastics, industrial machinery, steel, and textiles and apparel.
Brazil prohibits imports of all used consumer goods, including automobiles, clothing, tires, medical equipment, and information and communications technology (ICT) products as well as some blood products.
Import Licenses/Customs Valuation
U.S. footwear and apparel companies have expressed concern about the extension of non-automatic import licenses and certificate of origin requirements on non-MERCOSUR footwear to include textiles and apparel. They also note the imposition of additional monitoring, enhanced inspection, and delayed release of certain goods, all of which negatively impact the ability to sell U.S.-made and U.S.-branded apparel, footwear, and textiles in the Brazilian market.
In November 2011, the Ministry of Development, Industry, and Commerce implemented an 8 percent preference margin for domestic producers in the textile, clothing, and footwear industries when bidding on government contracts.
INTELLECTUAL PROPERTY RIGHTS PROTECTION
Egypt remained on the Watch List in the 2013 Special 301 Report. Piracy and counterfeiting continue to be serious problems, as does the lack of speed and effectiveness of processing trademark applications. Piracy of broadcast content via satellite television operations, lack of enforcement in major cases involving counterfeit apparel and other trademark violations, online piracy, entertainment software piracy, and book piracy remain concerns.
India maintains several export subsidy programs, including exemptions from taxes for certain export-oriented enterprises and for exporters in Special Economic Zones, as well as duty drawback programs that appear to allow for drawback in excess of duties levied on imported inputs. India also provides pre-shipment and post-shipment financing to exporters at a preferential rate. Numerous sectors (e.g., textiles and apparel, paper, rubber, toys, leather goods, and wood products) receive various forms of subsidies, including exemptions from customs duties and internal taxes, which are tied to export performance.
In February 2010, the United States submitted to the SCM Committee a formal request that the WTO Secretariat conduct a calculation of the export competitiveness of Indian textile and apparel products. The resulting calculation, published in March 2010, indicated that, with respect to textile and apparel products, India had met the definition of “export competitiveness” set out in Article 27.6 of the SCM Agreement. As a result, India must phase out export subsidies for those products over a period of eight years, in accordance with the SCM Agreement. Since the calculation, India has announced some reductions in duty drawback rates for textile products, as well as its intention to eliminate certain subsidy programs. However, India not only continues to offer subsidies to its textiles and apparel sector in order to promote exports, but it has also extended or expanded such programs and even implemented new export subsidy programs that benefit the textiles and apparel sector. As a result, the Indian textiles sector remains a beneficiary of many export promotion measures (e.g., Export-Oriented Units, Special Economic Zones, Export Promotion Capital Goods, Focus Product and Focus Market Schemes) that provide, among other things, exemptions from customs duties and internal taxes based on export performance.
In addition to the import tariff, there are a number of supplementary taxes and levies on imports. Apparel imports are subject to a 15 percent import duty, an Rs 75 (approximately $0.57) per unit Export Development Board Levy, a 12 percent VAT, a 5 percent Ports and Airports Levy, and a 2 percent NBT.
High tariffs in many sectors remain an impediment to access to the Thai market. The highest ad valorem tariff rates apply to imports competing with locally produced goods, including automobiles and automotive parts, motorcycles, beef, pork, poultry, tea, tobacco, flowers, wine, beer and spirits, and textiles and apparel.