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, Pennsylvania 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.
Pennsylvania’s Chemical Manufacturers Will Benefit from CTPA
Chemicals are one of the top exports to Colombia from Pennsylvania, with a value of nearly $24 million in 2006. Yet these products currently face tariffs averaging 8% - and ranging up to 20% - in the Colombian market.
CTPA will make Pennsylvania companies more competitive by eliminating immediately 82% of Colombian chemical tariffs and phasing out the rest over 10 years. As a result, U.S. chemical exports to Colombia are expected to increase by 23%. Fabricated
Estimated Increases in U.S. Exports in Sectors Important to Pennsylvania Metal
- Products 56.4%
- Primary Metals 44.3
- Processed Foods 36.2
- Chemicals 22.6
- Transportation Equipment 16.1
- Machinery 14.9
EXPORTS
In 2006, Colombia was Pennsylvania’s 29th largest export market for goods, with exports totaling $127 million.
Colombia will eliminate tariffs immediately on Pennsylvania’s leading exports, including:
- Certain chemicals, including activated carbon
- Cranes and other machinery
- Locomotives and parts
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Certain dairy products
- Certain poultry products
- Prime and Choice cuts of beef
The U.S.-Colombia TPA will permit Pennsylvania’s financial services firms to establish subsidiaries or branches in Colombia and operate on a cross- border basis.
IMPORTS
The U.S.-Colombia TPA will make permanent the duty-free benefits that 93 percent of Pennsylvania’s non- textile and apparel imports from Colombia already enjoy.
Pennsylvania’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) Ninety-one percent of Pennsylvania’s transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over ten years.
(b) Approximately 70 percent of Pennsylvania’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(c) For chemical products, Colombia will eliminate duties affecting 82 percent of Pennsylvania’s exports immediately upon implementation of the Agreement.
(d) Upon implementation of the Agreement, Colombia will immediately eliminate tariffs on 38 percent of U.S. steel exports and 77 percent of U.S. non-ferrous metals exports.
(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