Business Roundtable

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, Arizona 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.

Arizona’s Computer and Electronics Manufacturers Will Gain from CTPA

Despite Colombian tariffs of 5-15%, U.S. computers and electronics products account for 60% of the total Colombian market. With one of the largest computer and electronics industries in the country, Arizona is sure to benefit from the duty-free treatment provided by the CTPA, which is estimated to increase U.S. exports of these products by an additional 8%.

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

• Fabricated Metal Products 56.4%
• Non-Metallic Mineral Products 41.4
• Processed Foods 36.2
• Transportation Equipment 16.1
• Computers & Electronics 8.0

EXPORTS

In 2006, Colombia was Arizona’s 55th largest export market for goods, with exports totaling $9.8 million.

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

• Semiconductors
• Aircraft and related products
• Golf clubs and equipment

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

• Prime and choice cuts of beef
• Cotton
• Wheat and wheat products

The CTPA will strengthen intellectual property rights protections for Arizona’s designers and manufacturers of software, semiconductors, and other hi-tech products.

IMPORTS

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

Arizona’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 Arizona’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(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) For chemical products, Colombia will eliminate duties affecting 82 percent of Arizona’s exports immediately upon implementation of the Agreement.
(d) Ninety-one percent of Arizona’s transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over ten years.

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