Renewing the Nicaragua Tariff Preference Level (TPL)

As I mentioned the other day, you generally don't tend to hear praise of CAFTA-DR unless is you are speaking about Nicaragua. Praise might be too strong of a work but you do read more positives about the effects of CAFTA-DR there than in the Northern Triangle or the other member states of CAFTA-DR.

One of the reasons is that Nicaragua qualifies for some additional support because of its impoverishment. One of the extra bonuses that the country receives is the Nicaragua Tariff Preference Level (TPL) which "allows a limited number of Nicaraguan-made garments to enter the United States duty free without regard to the source of the fabrics." The US and Nicaragua also have a fabric matching program that benefits workers, businesses and consumers (presumably) in both countries.

As a result, trade in apparel between the US and Nicaragua has increased since CAFTA-DR went into effect while it has decreased between the US and every other member of CAFTA-DR. The program is set to expire at the end of this year which would be a shame if the benefits that the op-ed cites are true. It seems like a program that the US and Nicaraguan governments should consider extending and that the US should consider expanding to other countries in the region. Obviously, doing so would probably disadvantage Nicaragua and might even water down the benefits to everybody to such an extent that perhaps the current single-country model is the best..