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, Georgia 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.
Georgia’s Electrical Equipment Manufacturers Will Benefit from CTPA
Colombia was Georgia’s 4th largest market for electrical equipment in 2006, and plans by the Colombian government to develop several electricity generation projects will help ensure that demand for Georgia products continues to grow. However, Georgia faces tariffs of 5-15% on key electrical products.
CTPA will eliminate many of these tariffs immediately and provide Georgia companies with a strong competitive advantage in this potentially lucrative market.
Estimated Increases in U.S. Exports in Sectors Important to Georgia
- Poultry Products 72.3%
- Processed Foods 36.2
- Paper Products 27.9
- Chemicals 22.6
- Transportation Equipment 16.1
- Cotton 10.5
EXPORTS
In 2006, Colombia was Georgia’s 32nd largest export market for goods, with exports totaling $126 million.
Colombia will eliminate tariffs immediately on Georgia’s leading exports, including:
- Textiles
- Certain chemicals
- Certain processed foods and beverages
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Certain poultry products
- Cotton
- Peanuts
The CTPA will liberalize Colombia’s market for express delivery services, which are in high demand from a wide range of industries. Provisions on customs trade facilitation will also help express delivery companies provide better services to their customers.
IMPORTS
The U.S.-Colombia TPA will make permanent the duty-free benefits that 93 percent of Georgia’s non-textile and apparel imports from Colombia already enjoy.
Georgia’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) Forty-four percent of Georgia’s paper exports will receive immediate duty-free treatment under the U.S Colombia TPA. Duties on the remaining products will be eliminated in stages over 10 years.
(b) 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.
(c) For chemical products, Colombia will eliminate duties affecting 82 percent of Georgia’s exports immediately upon implementation of the Agreement.
(d) Approximately 70 percent of Georgia’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
For further information, contact Brigitte Schmidt Gwyn, Director, International Trade & Fiscal Policy 202.496.3263, bgwyn@businessroundtable.org