Before the attempts made by Colombia to delay the compliance with the World Trade Organization (WTO)´ ruling of eliminating the tariff tax on textiles and footwear from of the Colon Free Zone, the businesspeople of this business zone have asked the authorities to take measures of pressure against the neighboring country.
However, experts believe that Panama may not be in the best time to implement measures against Colombia because of the recent scandals of Panama Papers.
In 2012, Colombia began to apply tariffs of 10% on footwear and textiles from the Colon Free Zone, and a charge of $5 for each container, to prevent smuggling and money laundering, as was argued by the Colombian authorities.
The commercial movement of the ZLC has been affected, among other causes, due to the implementation of these duties.
According to the administration of the Colon Free Zone, in 2012, re-exports of textile and footwear were worth $1,475.3 million, while in 2015 it was $1,117.3 million, i.e., it has fallen by 24%.
Usha Mayani, President of the Association of Users of the CFZ has indicated on several occasions that the authorities should soon take a measure of retaliation against Colombia, since this would be the third ruling by the WTO that Colombia would not comply.
According to a statement from the Ministry of Commerce and Industries, Colombia would have brought before the dispute settlement body of the WTO its intention to expand the enforcement of the ruling ordering the elimination of violations of their tariff commitments on imports of textiles and shoes, asking for an additional period which was not specified, to comply with the recommendations issued in favor of Panama.
The decree that sets these tariffs will expire on 30 July, reason why Panama considers that what should follow is for Colombia to immediately comply with the ruling and its application of a term, would be a term of extension of a measure that already has been declared as infringing.
Before this situation, Mayani said that not only the CFZ users must be attentive to the response of the Government, but all the sectors of the country, since "if we all cannot defend the 7% generated by the CFZ, being a pillar of the economy, then all private companies of the country could be at risk".
He also sent a message to authorities that we should not fear the implementation of a retaliatory measure. "We must value what Panama offers, let´s not be scared for defending ourselves, because Panama is a unique country, however, it seems that we do not believe in ourselves".
He stressed that one of the fears might be what would happen with the investment of Colombians in Panama.
According to data of the Comptroller General, the investment of Colombia in Panama until 2014 amounted to more than $4,300 million, indicating an increase of 31% compared with the 2012.
Among the sectors that registered an increased Colombian investment was banking, commerce in the electric utilities, construction, food, hotels, and restaurants, among others.
For his part, Romel Adames, former Minister of Foreign Trade, said that we must differentiate between these measures and the measures which the country may take based on the decisions of the WTO.
He stressed that the retaliatory measures that could be implemented by Panama could be oriented towards public procurement, however, he explained that there are rulings of the WTO which allow us to apply tariff measures, for example.
However, he explained that when such measures are applied, both those autonomous as those of the WTO, relations between countries are altered towards the negative side, "While Colombia has been applying negative measures and Panama has not done anything about it".
"What the CFZ entrepreneurs must actually ask themselves is why Panama has not taken the corresponding measures," he said.
In his view, the Government should explain this situation or if it they do not consider that it is the appropriate time for what took place recently with the Panama Papers.
Severo Sousa, former President of the Association of Users, said that it is time to take stronger measures.