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, Oklahoma 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.

Oklahoma’s Energy Companies and Manufacturers Will Benefit from CTPA

The United States already holds a 65% share of the Colombian oil and gasfield equipment market, which will continue to grow as Colombia expands its oil and gas sector. Yet Oklahoma companies currently face tariffs of 5-15% on drilling and exploration products in Colombia.

CTPA will eliminate immediately most of these tariffs, including offshore drilling and production platforms and machinery parts.

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

• Fabricated Metal Products 56.4%
• Processed Foods 36.2
• Plastics & Rubber Products 22.6
• Transportation Equipment 16.1
• Machinery 14.9
• Wheat & Wheat Products 11.2

EXPORTS

In 2006, Colombia was Oklahoma’s 20th largest export market for goods, with exports totaling $35.8 million.

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

• Electrical switches
• Oil and mineral exploration equipment
• Certain processed foods

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

• Wheat and barley
• Prime and Choice cuts of beef
• Certain pork products

Energy demand is growing in Columbia and the CTPA requires the regulatory transparency and investment opportunities necessary to benefit Oklahoma’s energy services firms.

IMPORTS

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

Oklahoma’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) Approximately 70 percent of Oklahoma’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(b) Ninety-one percent of Oklahoma’s transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over ten years.
(c) Upon implementation of the U.S.-Colombia TPA, 68 percent of the State’s electrical and electronic equipment will receive immediate duty-free treatment.
(d) Colombia will eliminate tariffs on 38 percent of Oklahoma’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