The Government of Colombia sanctioned Decree 414 of 2021 that modifies Decree 2153 of 2016 for a period of two years from the date of entry into force and in order to raise import tariffs on clothing, clothing, for the protection of local industry. With the entry into force of the decree, we consulted people linked to the sector.
The National Government signed decree 2598 on December 23, 2022, which imposes a 40% tariff on imported textiles such as: Breska, Zara, Pullandbear, H&M, among other brands, this is undoubtedly good news for the textile sector. Colombian🇨🇴, since this will allow a better national competition.
Establish a tariff of forty percent (40%) ad Valorem on imports of any origin from the most favored nation (MFN), for products classified in chapters 61 and 62 of the National Customs Tariff”, says the Decree*.
This textile and clothing sector aspires to have large numbers this 2023 and from now on the promotions come to light on the posters of these 100% national brands.
“Not only will promotions be offered that will be on the 30% discount on the purchase of garments, the most important thing, without a doubt, is to generate jobs in our country and the economy sector promotes 37 subsections of the economy,” Wilson explained. Vergara, Manager of a large shopping center in Bogotá
The prices and discounts will be carried uniformly in the more than 700 stores in the wholesale heart of textiles and clothing, where the best prices on garments for everyone will be found, with the purpose of continuing with the fluidity of sales. This commercial union has also designed a strategy for people who want to undertake this 2023, with lower prices they can do it, since daily more than 50 thousand people frequent this trade with the purpose of stocking their businesses, acquiring retail clothing and helping the country’s textile industry.
On the other hand, electronic commerce in Colombia grew by more than 40% since 2021 and has remained at the same percentage until this year, according to a report presented by the Colombian Chamber of Electronic Commerce (CCCE).
To avoid crowds and long lines, customers will be able to continue enjoying buying clothes over the internet, where the same discounts and promotions are handled. With this proposal, they seek to compete with the large digital platforms, which provide their services to people who prefer to receive their purchases from home, to expedite the time and comfort of their customers.
View from Huila
Eduard Martínez is an industrial engineer linked to the clothing industry as a businessman and as a maquiladora in some cases. Eduard gave us his point of view regarding this tariff, which he considers important as long as it does not include fabrics, because if so, we would not be doing anything.
With more than 30 years of experience in the sector, Eduard initially told a little about his participation in the business as a great businessman, the ups and downs of this industry that evolves according to how the international market does.
“I had a company for about 22 years, through different ups and downs, with more than 60 employees, in this case in Bogotá where I am from and then I reduced it, about four years ago we came to the city of Neiva and we have set up a company again, We are starting again,” he said.
In the first stage, he was dedicated to maquiladora, working for third parties, for big brands such as “Fuera de serie”, among others that in turn are changing according to how the market changes.
When asked about clothing in Huila, Eduard is clear that it is very incipient and almost by tradition, “let’s say that it is like very artisanal, whoever knows how to cook here has done it by tradition, they learned from their mother or grandmother And so it goes from generation to generation, but there hasn’t been an industry in Huila that has generated organized work through technology, there hasn’t been one,” he added.
He shares that in the case of the new company they have gone to look for qualified personnel even at the Seine, and there is no specialized worker who applies the technology, “it is almost time to start training them from scratch in the company itself,” he said.
They are in a training process with the new staff to teach them from an industrialized way. In the industry, what is needed in addition to technology is to have the tools that facilitate the process of the operational part.
They currently work three clothing lines; the feminine one that includes all the garments, the masculine one with more informal shirts and a third one that is knitted fabric that is the line of t-shirts.
Eduard Martínez is an industrial engineer graduated from the District University and has been linked to the clothing industry all his life, which is why he speaks with ownership of the business he knows.
Apart from his university education, he recognizes the contribution that Sena made to him, as well as Banco Andino, where he acquired financial training.
On the subject of the 40% tariff on imports of clothing, what is not clear is how far the scope goes, since he says that this 40% also applies to inputs and textiles and if so, for him “we would not be doing nothing, because most of the fabrics that are currently used are imported. If it only applies to imported clothing, it will be a benefit, since this would strengthen clothing companies in Colombia.”
What is clear is that if they want to make them competitive, they have to put them at the price levels that it costs to bring a garment or fabric from abroad. What the Colombian wants when he is going to buy a garment made in the country, is that that shirt or that pants, for example, be made with good quality fabrics.
In conclusion, for Eduard a lot of technology is required to compete with quality and as for the tariff it will not work if it covers the fabrics that need to be imported.
We must fight smuggling
For other people linked to the clothing industry, the tariff is positive, but it is useless if strong work is not done against smuggling. Otherwise, what really ends up being promoted is this illegal business that does so much damage not only to the textile industry in the country, but also to other sectors of the economy.
Nidia Patricia Dulcey Castañeda is a woman from Garzón with ties to the clothing sector with a degree as a fashion designer and a postgraduate degree in production management and with experience as a production manager for more than 12 years of “Fuera de Serie” and managed chain stores of clothing sales, there are about 22 years between one and the other in the business.
He says that he thinks totally different, compared to the tariff based on the experience in Fuera de Serie as one of the first importers, “as an importer you find yourself with a lot of corruption, there is no one who counts the garments that come in a container for example and it is Of course, they put up to 100,000 pieces in a container, who is going to count them? That is why I think that what the measure really favors is smuggling,” he said.
He adds that when implementing the measure they did not stop to ask themselves how much labor is needed, “it is not that the Colombian textile industry is bad, since we as garment manufacturers cannot cope with the demand that exists. What happens is that, from the schools, young people are not encouraged to work in this type of art. This job is frowned upon by young people who prefer to work on a platform and earn $70,000 pesos, the same as they would pay him to sit in front of a sewing machine, but he chooses the first.”
And to strengthen his concept, he says that, as micro-entrepreneurs, they generate nine to ten direct jobs and have not been able to grow due to a lack of qualified labor. “In just December, we stopped Billing about $10,000,000 pesos for not having someone to sew,” he added.
Another example of the incidence of smuggling is that they know that in Neiva there are those who sell a ready-made and finished shirt for $14,000 pesos and it only costs them that amount of fabric, so where do they come from and how do they bring these fabrics? they consider.
Similarly, with other examples of prices such as a zipper that costs $2,100 pesos in a store and is available for $600, Nidia Patricia maintains that this measure reminds her of when they told us about the economic opening that was more harmful than beneficial for the economy of the country. country.
Disloyalty
Another phenomenon that they have to face in the industry is disloyalty, for which Nidia Patricia Dulcey Castañeda, recounts that they gave a job to an elderly person who had been left without a contract and what she did was try to get the best worker she has in the moment that he has been in the company for more than a year and which they are training.
It is the thought of two businessmen from the clothing industry in Neiva who gave their points of view regarding the new tariff on clothing imports, which, like everything else, is done with good intentions, but must face a series of obstacles along the way.
In conclusion
Will it be possible to buy imported garments in Colombia?
That is the question that thousands of fans of various international brands with a great presence in Colombia and from different countries ask themselves.
Most of them agree that, despite the fact that the brand’s garments can be purchased, it will be practically impossible to acquire them due to the high costs they will have.
As detailed in the provision, a tariff of 40% will be established, depending on the value, on imports. In other words, products such as suits, overalls, coats, jackets, pants, dresses, skirts, skorts, baby clothes and shirts, whose material is wool, cotton or synthetic fibers, will increase in price, according to the decree.
Zara, H&M and Forever 21 are some of the most affected, among other things, because they are the ones that lead the ‘ranking’ of imported clothing and clothing in Colombia. According to Mall & Retail magazine, between January and October 2022, the total imports of three companies amounted to US$61 million (H&M), $59 million (Falabella) and US$17 million (Zara).