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, Colorado 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.

Colorado’s Computer and Electronics Manufacturers Will Gain from CTPA

Despite Colombian tariffs of 5-15%, U.S. computers and electronics products – Colorado’s top export – account for 60% of the total Colombian market. Nearly 100% of information technology products will receive immediate duty-free treatment under the CTPA, including computers and broadcast equipment, and the tariff reduction alone is expected to increase U.S. exports by 8%.

Estimated Increases in U.S. Exports in Sectors Important to Colorado

• Fabricated Metal Products 56.4%
• Beef Products 46.2
• Processed Foods 36.2
• Chemicals 22.6
• Computers & Electronics 8.0

EXPORTS:

In 2006, Colombia was Colorado’s 39th largest export market for goods, with exports totaling $11.7 million.

Colombia will eliminate tariffs immediately on Colorado’s leading exports, including:

• Computers and electronics
• Agricultural chemicals
• Medical equipment

Colombia also will eliminate tariffs immediately on many farm products, such as:

• Whey and certain dairy products
• Certain corn products
• Wheat

The Colombia TPA includes stronger protection of intellectual property rights benefiting Colorado’s software producers.

Premium U.S. Beef to Receive Immediate Duty-Free Access

Some of the biggest beneficiaries of the CTPA will be Colorado’s ranchers and its beef industry. Under the CFTA, Colombia agrees to eliminate immediately its tariff on USDA Prime and Choice beef products, which currently stands at 80%! Lower grade meats will receive limited duty-free access, and “above-quota” tariffs will be phased out over 10 years.

As a result of these and other Colombian concessions, groups such as the National Cattlemen’s Beef Association, the American Meat Institute, and the U.S. Hide, Skin and Leather Association have publicly supported the CTPA.

IMPORTS

The U.S.-Colombia TPA will make permanent the duty-free benefits that 93 percent of Colorado’s non-textile and apparel imports from Colombia already enjoy.

Colorado’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. The International Trade Commission estimates that U.S. exports of fabric mill products may experience a small increase in the long run.
(6) Column 1 multiplied by Column 2.
(a) Approximately 68 percent of the State’s electronic products will receive immediate duty-free treatment. For information technology product exports 100 percent will receive immediate duty-free treatment.
(b) For chemical products, Colombia will eliminate duties affecting 82 percent of Colorado’s exports immediately upon implementation of the Agreement.
(c) Approximately 70 percent of Colorado’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(d) More than 80 percent of Colorado’s industrial exports will receive immediate duty-free treatment under the Agreement.
(e) One hundred percent of U.S. exports of fabric mill products will receive immediate duty-free treatment under the Agreement.

For further information, contact Brigitte Schmidt Gwyn, Director, International Trade & Fiscal Policy 202.496.3263, bgwyn@businessroundtable.org