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, New Mexico 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.

New Mexico’s Chemical Manufacturers Will Benefit from CTPA

Chemicals have been New Mexico’s largest export to Colombia in six of the last eight years, yet New Mexico companies face Colombian chemical tariffs that average 8% and range up to 20%.

CTPA will make New Mexico’s chemical exports more competitive in the Colombian market by eliminating 82% of chemical tariffs immediately and phasing out the rest over 10 years. These changes are expected to raise U.S. chemical exports to Colombia by 22%.

Estimated Increases in U.S. Exports in Sectors Important to New Mexico

• Fabricated Metal Products 56.4%
• Non-Metallic Mineral Products 41.4
• Processed Foods 36.2
• Chemicals 22.6
• Petroleum & Coal Products 14.5
• Computers & Electronics 8.0

EXPORTS

In 2006, Colombia was New Mexico’s 58th largest export market for goods, with exports totaling $763,000.

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

• Semiconductors
• Certain chemicals, including calcium chloride
• Nickel alloys

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

• Prime and Choice cuts of beef
• Pecans
• Wheat and barley

The CTPA will strengthen intellectual property protections for New Mexico’s designers and manufacturers of semiconductors, computers, and other hi-tech products.

IMPORTS

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

Colombian Products Already Receive Broad Access to U.S. Market

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.

New Mexico’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.
(6) Column 1 multiplied by Column 2. * The International Trade Commission did not estimate the effects of the U.S.-Colombia TPA on exports of waste and scrap and used or second-hand merchandise.
(a) For chemical products, Colombia will eliminate duties affecting 82 percent of New Mexico’s exports immediately upon implementation of the Agreement.
(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) The vast majority of New Mexico’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