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, Maine 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.
Maine’s Paper Mills Will Benefit from CTPA
Paper products are Maine’s leading export to Colombia, but currently face average tariffs of more than 12%. Upon implementation of the Agreement, Colombia will eliminate immediately tariffs on nearly half of all paper products and phase out the rest over 10 years.
By eliminating these barriers to trade, U.S. exports of paper products to Colombia are expected to grow by nearly 30%, or roughly $200,000 for exports from Maine alone.
Estimated Increases in U.S. Exports in Sectors Important to Maine
- Wood Products 72.6%
- Fabricated Metal Products 56.4
- Processed Foods 36.2
- Fruits & Vegetables 31.6
- Paper Products 27.9
- Transportation Equipment 16.1
EXPORTS
In 2006, Colombia was Maine’s 40th largest export market for goods, with exports totaling $2.6 million.
Upon full implementation of the TPA, Colombia will eliminate tariffs on Maine’s leading exports, including:
- Paper products
- Footwear
- Distilled spirits
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Blueberries
- Certain potatoes and potato products
- Lobsters
The Colombia TPA includes stronger protection of intellectual property rights benefiting Maine’s pharmaceutical and veterinary product producers.
IMPORTS
The U.S.-Colombia TPA will make permanent the duty-free benefits that 93 percent of Maine’s non-textile and apparel imports from Colombia already enjoy.
Maine’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.
(6) Column 1 multiplied by Column 2.
(a) Forty-four percent of Maine’s paper exports will receive immediate duty-free treatment under the U.SColombia TPA. Duties on the remaining products will be eliminated in stages over 10 years.
(b) Upon implementation of the Agreement, Colombia will immediately eliminate tariffs on 38 percent of U.S. steel exports and 77 percent of U.S. non-ferrous metals exports.
(c) Ninety-one percent of Maine’s transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over ten years.
(d) Approximately 70 percent of Maine’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