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, Indiana 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.

Indiana’s Auto Parts Manufacturers Will Benefit from CTPA

The United States is the leading supplier of auto parts to the Colombian market, despite tariffs of 5- 15% on most parts (motor vehicles face higher tariffs of up to 35%).

The CTPA will eliminate immediately almost all 5% tariffs and phase out most of the higher tariffs over 5 years. The concessions will allow Indiana’s parts producers – one of the State’s largest manufacturing employers – to be even more competitive in this important South American market.

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

• Fabricated Metal Products 56.4%
• Primary Metal Manufactures 45.7
• Motor Vehicles and Parts 43.8
• Chemicals 22.6
• Corn 21.0

EXPORTS

In 2006, Colombia was Indiana’s 34th largest export market for goods, with exports totaling $46.8 million.

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

• Plastics and resins
• Certain construction and agricultural machinery
• Certain chemicals and pharmaceuticals

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

• Certain corn products
• Soybean meal and flour
• Certain pork products

The U.S.-Colombia TPA will benefit Indiana’s pharmaceutical companies by strengthening intellectual property rights protections.

IMPORTS

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

Indiana’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) For chemical products, Colombia will eliminate duties affecting 82 percent of Indiana’s exports immediately upon implementation of the Agreement.
(b) Approximately 70 percent of Indiana’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(c) 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.
(d) More than 80 percent of Indiana’s industrial exports will receive immediate duty-free treatment under the Agreement.
(e) Colombia will eliminate 60 percent of plastics exports and 59 percent of rubber exports immediately upon the implementation of the Agreement.

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