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, Nebraska 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.

Nebraska’s Corn Farmers Will Benefit from CTPA

Nebraska is the third-largest U.S. exporter of corn, with exports worth nearly a billion dollars in 2006. Yet Nebraska corn faces significant barriers in Colombia, with some tariffs as high as 195%!

CTPA will establish duty-free tariff rate quotas for yellow and white corn and animal feeds with 12-year phase-outs for all tariffs. All other corn products will receive duty-free treatment in Colombia within 10 years of implementation; concessions that could raise corn exports to Colombia by 21%.

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

• Beef 46.2%
• Processed Foods 36.2
• Chemicals 22.6
• Corn 21.0
• Machinery 14.9

EXPORTS

In 2006, Colombia was Nebraska’s 44th largest export market for goods, with exports totaling $5.6 million.

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

• Agricultural and construction machinery
• Certain chemicals, including fertilizers
• Certain processed foods

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

• Prime and Choice cuts of beef
• Certain pork products
• Certain corn products

The CTPA will permit Nebraska insurance companies to establish subsidiaries or branches in Colombia and operate on a crossborder basis.

IMPORTS

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

Nebraska’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. * Used or Second-Hand Merchandise includes donated clothing and other goods. The International Trade Commission did not estimate the effects of the U.S.-Colombia TPA on these products.
(a) For chemical products, Colombia will eliminate duties affecting 82 percent of Nebraska’s exports immediately upon implementation of the Agreement.
(b) Approximately 70 percent of Nebraska’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(c) Ninety-one percent of Nebraska’s transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over ten years.
(d) More than 80 percent of Nebraska’s industrial exports will receive immediate duty-free treatment under the Agreement.

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