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, Ohio 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.

Ohio’s Auto Parts Manufacturers Will Benefit from CTPA Estimated Increases in U.S. Exports

The United States is the leading supplier of auto parts to the Colombian market, despite tariffs of 5- 15% on most parts (motor vehicles face higher tariffs of up to 35%).

The CTPA will eliminate immediately almost all 5% tariffs and phase out most of the higher tariffs over 5 years. The concessions will allow Ohio’s parts producers – the State’s largest manufacturing employers – to be even more competitive in this important South American market.

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

• Fabricated Metal Products 56.4%
• Motor Vehicles & Parts 43.8
• Processed Foods 36.2
• Chemicals 22.6
• Machinery 14.9
• Electrical Equipment 8.0

EXPORTS

In 2006, Colombia was Ohio’s 30th largest export market for goods, with exports totaling $117 million.

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

• Polymers and resins
• Electronics, including cash registers
• Certain consumer products

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

• Soybean meal and flour
• Certain corn products
• Wheat and barley

The U.S.-Colombia TPA will benefit U.S. retailers by removing restrictions on movement of goods among manufacturers, wholesalers, retailers, and consumers.

IMPORTS

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

Ohio’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.
(a) Approximately 70 percent of Ohio’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(b) Upon implementation of the U.S.-Colombia TPA, 68 percent of the State’s electrical and electronic equipment will receive immediate duty-free treatment.
(c) For chemical products, Colombia will eliminate duties affecting 82 percent of Ohio’s exports immediately upon implementation of the Agreement.
(d) Ninety-one percent of Ohio’s transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over ten years.
(e) 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.

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