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, Montana 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.
Montana’s Farmers Will Benefit from CTPA
Montana’s farmers are some of the leading U.S. exporters of wheat and barley, yet these products face Colombian tariffs that - because of variable rate system - can reach up to 248%.
CTPA will eliminate immediately both the tariff band system and tariffs on wheat products and barley (except feed). CTPA also will eliminate immediately its 80% tariff on the most important beef products: USDA prime and choice cuts.
Estimated Increases in U.S. Exports in Sectors Important to Montana
- Wood Products 72.6%
- Fabricated Metal Products 56.4
- Processed Foods 36.2
- Non-Metallic Minerals 22.6
- Machinery 14.9
- Wheat Products 11.2
EXPORTS
In 2006, Colombia was Montana’s 32nd largest export market for goods, with exports totaling $833,500.
Colombia will eliminate tariffs immediately on Montana’s leading exports, including:
- Certain metal products
- Semiconductors and computers
- Certain wood products
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Prime and Choice cuts of beef
- Wheat and barley
- Potatoes and potato products
As demand for consulting, data processing, accounting, and other business services increases, the CTPA ensures that Montana’s business services providers will receive transparent and fair treatment.
Colombian Products Already Receive Broad Access to U.S. Market
In 2006, the average U.S. tariff on imports from Colombia was 0.2 percent, compared to average tariffs of 10 - 20 percent on U.S. exports to Colombia.
The U.S.-Colombia TPA will make permanent the duty-free benefits granted to Colombia under the Andean Trade Promotion and Drug Eradication Act and the Generalized System of Preferences programs and ensure that Montana exports receive permanent and reciprocal access to the growing Colombian market.
Montana’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) Colombia will eliminate tariffs on 38 percent of the State’s steel products and 77 percent of non-ferrous metals immediately. The remaining tariffs will be eliminated over 10 years.
(b) Approximately 70 percent of Montana’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(c) Overall, more than 80 percent of U.S. industrial exports will receive immediate duty-free treatment, including many glass, concrete, and other non-metallic mineral products.
(d) 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.
For further information, contact Brigitte Schmidt Gwyn, Director, International Trade & Fiscal Policy 202.496.3263, bgwyn@businessroundtable.org