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Region: import, assemble, export

Monday, August 27, 2012

In recent months, there has been discussion about the possibility of third countries using the region as a place to assemble products, which can be exported duty-free to the United States, thanks to the provisions of the Central American free trade agreement.

At some point, the discussions could become reality, for sectors other than clothing and footwear, which use fabric and other inputs from third countries.

In order to qualify for duty-free treatment, the final product must be substantially different from the inputs.

The arrangement could work for South American fruits and vegetables, transformed into jams and sauces, which in many cases pay significant duties, when imported into the U.S.

A similar approach applies to products exported to China from Costa Rica, taking advantage of a free trade agreement between the two countries.