On Tuesday July 10, 2012, the Committee for the Implementation of Textile Agreements announced that it is reducing the 2012 tariff preference level (TPL) for Nicaragua to account for the shortfall in meeting the one-to-one commitment for cotton and man-made fiber trousers exported from Nicaragua to the United States pursuant to the Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR). The TPL can be beneficial to both U.S. textile mills seeking to source in Nicaragua as well as retailers and apparel manufacturing companies doing business in Nicaragua.

How Will the Reduced TPL Affect Sourcing?

The amendment to the 2012 TPL for cotton and man-made fibers exported from Nicaragua to the U.S. reduces the overall limit of qualifying trousers that can seek duty-free treatment pursuant to Annex 3.28 of the CAFTA-DR as implemented in General Note 29 of the Harmonized Tariff Schedule of the United States.

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