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, Kansas 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.

Kansas’ Wheat Farmers Will Benefit from CTPA

More than 60% of all Colombian wheat imports come from the United States, despite a 12.5% tariff and stiff competition from Argentina, which receives preferential access for wheat in the Colombian market.

As the largest exporter of wheat, Kansas stands to gain from CTPA, which will provide unlimited duty-free access to Colombia for wheat immediately upon implementation of the Agreement.

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

• Beef Products 46.2%
• Processed Foods 36.2
• Chemicals 22.6
• Transportation Equipment 16.1
• Machinery 14.9
• Wheat 11.2

EXPORTS

In 2006, Colombia was Kansas’s 44th largest export market for goods, with exports totaling $28.6 million.

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

• Aircraft and parts
• Certain chemicals
• Certain processed foods

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

• Prime and choice cuts of beef
• Barley
• Certain pork products

Colombia agreed to significant reforms in its telecommunications market. Once the TPA is implemented, Kansas’ telecom companies will be able to interconnect with Colombia’s networks at nondiscriminatory and cost-based rates.

IMPORTS

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

Kansas’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. Estimated increase in exports for overall crop production calculated from detailed estimates by the 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) Upon implementation of the Agreement, U.S. exporters of agricultural products will receive duty-free treatment on products accounting for nearly 52 percent of current trade and will see all tariffs phased out for the remaining products.
(b) Ninety-one percent of Kansas’ transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over 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) Approximately 70 percent of Kansas’ industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(e) For chemical products, Colombia will eliminate duties affecting 82 percent of Kansas’ exports immediately upon implementation of the Agreement.

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