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, Minnesota 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.

Minnesota’s Farmers Will Gain from CTPA

Minnesota is the third-largest exporter of soybeans and soybean products in the United States, but its farmers currently face tariffs of 5- 20% when selling their products in Colombia.

CTPA will immediately eliminate its 5% tariff on soybeans and 20% tariff on soybean meal and soybean flour, while phasing out tariffs on refined soybean oil over 5 years. As a result of increased market access, exports of soybeans to Colombia are expected to increase by 30-50%, depending on the type of soybean product.

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

• Fabricated Metal Products 56.4%
• Processed Foods 36.2
• Corn 21.0
• Machinery 14.9
• Computers & Electronics 8.0

EXPORTS

In 2006, Colombia was Minnesota’s 27th largest export market for goods, with exports totaling $86.1 million.

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

• Fork lift machinery and parts
• Water filtration & purifying equipment
• Certain processed foods

The CTPA will eliminate tariffs immediately on 80 percent of U.S. consumer and industrial goods, which will benefit companies like 3M, which produces over 55,000 products.

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

• Wheat and barley
• Soybean meal and flour
• Certain corn products

IMPORTS

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

Minnesota’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.
(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) 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) Approximately 70 percent of Minnesota’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(d) More than 80 percent of Minnesota’s industrial exports will receive immediate duty-free treatment under the Agreement.
(e) The vast majority of Minnesota’s exports of processed food products will receive immediate duty-free treatment under the U.S.-Colombia TPA.

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