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Louisiana and Colombia – A Growing Partnership

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, Louisiana 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.

Louisiana’s Farmers Will Benefit from CTPA

Louisiana is the third-largest U.S. rice exporter, with $136 million worth of total rice exports. Yet as a result of tariff rates that approach 189%, U.S rice exports to Colombia are negligible.

The CTPA will establish duty-free quotas for U.S rice exports and phase out over-quota tariffs over 19 years. When fully implemented, CTPA could raise U.S. rice exports to Colombia to $200 million, a large share of which would certainly accrue to Louisiana’s rice farmers.

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

  • Fabricated Metal Products 56.4%
  • Processed Foods 36.2
  • Paper Products 27.9
  • Chemicals 22.6
  • Transportation Equipment 16.1
  • Petroleum & Coal Products 14.5

EXPORTS

In 2006, Colombia was Louisiana’s 9th largest export market for goods, with exports totaling $630 million.

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

  • Certain chemicals
  • Unwrought aluminum
  • Certain processed foods

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

  • Cotton
  • Prime and choice beef cuts
  • Pecans and tree nuts

Colombia has agreed to eliminate barriers to foreign logistics services suppliers, which will allow increased access and the streamlining of operations for Louisiana’s shipping and transportation companies.

IMPORTS

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

Louisiana’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. Estimated increase in exports for overall crop production calculated from detailed estimates by the International Trade Commission.
(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) For chemical products, Colombia will eliminate duties affecting 82 percent of Louisiana’s exports immediately upon implementation of the Agreement.
(c) The vast majority of Louisiana’s exports of processed food products will receive immediate duty-free treatment under the U.S.-Colombia TPA.
(d) Colombia will eliminate all tariffs on Louisiana’s petroleum and coal products in stages over ten years.
(e) Approximately 70 percent of Louisiana’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

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