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A U.S.-Colombia Trade Promotion Agreement (TPA) has the potential to increase both trade and investment between the United States and Colombia, improving on an already strong relationship. In particular, Alaska stands to gain from increased business ties, as the TPA will create jobs at home through increased export market access for both goods and services, reduced prices for manufacturers, and an improved investment environment.
Alaska’s Chemical Producers Will Benefit from CTPA
In 2006, chemicals accounted for nearly half of Alaska’s exports to Colombia, despite facing Colombian chemical tariffs that average 8% and range up to 20%.
CTPA will make Alaska’s chemical exports more competitive in Colombia by eliminating 82% of chemical tariffs immediately and phasing out the rest over 10 years; changes that are expected to increase U.S. exports by 23%.
Estimated Increases in U.S. Exports in Sectors Important to Alaska
- Fabricated Metal Products 56.4%
- Non-Metallic Minerals 41.4
- Processed Foods 27.9
- Chemicals 22.6
- Machinery 14.9
- Petroleum & Coal Products 14.5
In 2006, Colombia was Alaska’s 29th largest export market for goods, with exports totaling $5.2 million.
Colombia will eliminate tariffs immediately on Alaska’s leading exports, including:
- Certain seafood products
- Certain minerals and ores
- Excavation and construction machinery
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Certain diary products
- Potatoes and potato products
- Prime and Choice cuts of beef
Energy demand is growing in Columbia and the CTPA provides the necessary regulatory transparency and investment opportunities to benefit Alaska’s energy services firms.
Colombian Products Already Receive Broad Access to U.S. Market
In 2006, the average U.S. tariff on imports from Colombia was 0.2 percent, compared to average tariffs of 10 - 20 percent on U.S. exports to Colombia.
The U.S.-Colombia TPA will make permanent the duty-free benefits granted to Colombia under the Andean Trade Promotion and Drug Eradication Act and the Generalized System of Preferences programs and ensure that Alaska exports receive permanent and reciprocal access to the growing Colombian market.
Alaska’s Exports to Colombia Will Benefit from Duty Savings and Increased Access to Colombia’s Market
SOURCES & NOTES
(1) U.S. Department of Commerce.
(2) U.S. International Trade Commission, U.S. Department of Commerce, and U.S. Department of Agriculture. For some categories, Colombia’s duties range as high as 20 percent.
(3) U.S. International Trade Commission. The majority of Colombia’s exports have received duty-free treatment under the Andean Trade Promotion and Drug Eradication Act (ATPDEA) since 2002. In addition, Colombia also has received duty-free benefits under the Generalized System of Preferences (GSP) program since 1976.
(4) U.S. Department of Commerce.
(5) U.S. International Trade Commission. The International Trade Commission did not publish separate estimates for chemical, plastic, and rubber products.
(6) Column 1 multiplied by Column 2.
(a) Approximately 70 percent of Alaska’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(b) For chemical products, Colombia will eliminate duties affecting 82 percent of Alaska’s exports immediately upon implementation of the Agreement.
(c) The vast majority of Alaska’s exports of processed food products will receive immediate duty-free treatment under the U.S.-Colombia TPA.
For further information, contact Brigitte Schmidt Gwyn, Director, International Trade & Fiscal Policy 202.496.3263, email@example.com