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, Mississippi 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.
Mississippi’s Farmers Will Benefit from CTPA
Mississippi is one of the leading U.S. state exporters of poultry, yet its exports to Colombia of certain chicken products, such as leg quarters, face tariffs of up to 164%.
The CTPA will phase out these high tariffs as well as eliminate non-tariff barriers to Mississippi’s products. For example, Colombia will not require its Ministry of Agriculture to inspect individual poultry facilities before accepting poultry shipments from Mississippi companies.
Estimated Increases in U.S. Exports in Sectors Important to Mississippi
- Wood Products 72.6%
- Poultry Products 72.3
- Fabricated Metal Products 56.4
- Processed Foods 36.2
- Chemicals 22.6
- Transportation Equipment 16.1
EXPORTS
In 2006, Colombia was Mississippi’s 33rd largest export market for goods, with exports totaling $22.2 million.
Colombia will eliminate tariffs immediately on Mississippi’s leading exports, including:
- Certain chemicals, including hydrogen peroxide
- Yarns and textiles
- Certain automotive equipment and parts
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Certain poultry products
- Rice
- Cotton
IMPORTS
The U.S.-Colombia TPA will make permanent the duty-free benefits that 93 percent of Mississippi’s non-textile and apparel imports from Colombia already enjoy.
Mississippi’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. The International Trade Commission estimates that U.S. exports of fabric mill products may experience a small increase in the long run.
(6) Column 1 multiplied by Column 2.
(a) For chemical products, Colombia will eliminate duties affecting 82 percent of Mississippi’s exports immediately upon implementation of the Agreement.
(b) 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.
(c) One hundred percent of U.S. exports of fabric mill products will receive immediate duty-free treatment under the Agreement.
(d) Forty-four percent of Mississippi’s paper exports will receive immediate duty-free treatment under the U.S -Colombia TPA. Duties on the remaining products will be eliminated in stages over 10 years.
(e) Approximately 70 percent of Mississippi’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