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, North Carolina 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.
North Carolina’s Chemical Producers Stand to Gain from CTPA
Colombia is an important market for U.S. plastics producers, accounting for one-third of vinyl chloride and 58% of propylene exports. Chemicals and plastics are top North Carolina export to Colombia, but most products currently face tariffs of 5%.
CTPA will eliminate immediately the tariffs on plastics, a move that is expected to increase U.S exports by 23%. For North Carolina companies, that would equal nearly $15 million per year in additional exports.
Estimated Increases in U.S. Exports in Sectors Important to North Carolina
- Pork & Poultry 72.3%
- Fabricated Metal Products 56.4
- Processed Foods 36.2
- Chemicals 22.6
- Tobacco Products 19.1
- Machinery 14.9
EXPORTS
In 2006, Colombia was North Carolina’s 25th largest export market for goods, with exports totaling $154 million.
Colombia will eliminate tariffs immediately on North Carolina’s leading exports, including:
- Certain chemicals, including enzymes and chalk
- Certain plastics and resins
- Yarns and textiles
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Certain pork products
- Certain poultry products
- Cotton
The CTPA will strengthen intellectual property rights protections for North Carolina’s designers and manufacturers of software, computer equipment, and other hi-tech products.
IMPORTS
The U.S.-Colombia TPA will make permanent the duty-free benefits that 93 percent of North Carolina’s non-textile and apparel imports from Colombia already enjoy.
North Carolina’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. 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 North Carolina’s exports immediately upon implementation of the Agreement.
(b) Colombia will eliminate tariffs on 60 percent of U.S. plastics exports and 59 percent of rubber exports immediately upon the implementation of the Agreement.
(c) The International Trade Commission estimates that U.S. exports of fabric mill products may experience a small increase in the long run. One hundred percent of U.S. exports of fabric mill products will receive immediate dutyfree treatment under the Agreement.
(d) Approximately 70 percent of North Carolina’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(e) 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