U.S.-Colombia Trade Agreement to Take Effect May 15, Reduce Tariffs
The U.S.-Colombia Trade Promotion Agreement will take effect on May 15, 2012, the U.S. Trade Representative office announced. That follows completion of work by the U.S. and Colombia to review each other’s laws and regulations related to the implementation of the Agreement, as well as Colombia’s important steps to fulfill the Action Plan Related to Labor Rights, it said. U.S. Trade Representative Ron Kirk exchanged letters with officials from the government of Colombia in which each country confirmed that it had completed its applicable legal requirements.
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Effective May 15, more than 80 percent of U.S. exports of consumer and industrial products to Colombia will become duty-free, including agricultural and construction equipment, building products, aircraft and parts, fertilizers, information technology equipment, medical scientific equipment, and wood. Also, immediately more than half of U.S. exports of agricultural commodities to Colombia will become duty-free, including wheat, barley, soybeans, high-quality beef, bacon, and almost all fruit and vegetable products, USTR said. (U.S. goods exports to Colombia in 2011 were $14.3 billion. The U.S. International Trade Commission estimates the Agreement will lead to an increase in U.S. GDP of $2.5 billion.
The U.S.-Colombia trade agreement’s implementing bill was approved on October 12, 2011 (See ITT's Online Archives 11101002).
Other details of the agreement include (here):
- It will provide significant new access to Colombia’s $180 billion services market.
- Over 80 percent of U.S. exports of consumer and industrial products to Colombia will become duty free immediately, with remaining tariffs phased out over 10 years. Average tariffs on U.S. industrial exports ranging from 7.4 to 14.6 percent.
- There will be more protection for Intellectual Property Rights: The Agreement provides for improved standards for the protection and enforcement of a broad range of intellectual property rights, consistent with U.S. and emerging international standards of protection and enforcement.
- Both parties commit to effectively enforce their own domestic environmental laws and adopt, maintain and implement laws, regulations, and all other measures to fulfill obligations under covered multilateral environmental agreements.
- U.S. suppliers are granted rights to non-discriminatory treatment in bidding on procurement opportunities offered by a broad range of Colombian government agencies.
- There will be a level playing field for U.S. Investors.
Average Colombia tariffs on U.S. industrial exports before and after full implementation of the agreement:
- Metals and Ores 9.2% 0%
- Infrastructure and Machinery 11.1% 0%
- Transportation Equipment 12.7% 0%
- Autos and Auto Parts 7.4% 0%
- Building Products 13.2% 0%
- Paper and Paper Products 12.5% 0%
- Consumer Goods 14.6% 0%
The U.S. Chamber of Commerce hailed the agreement, saying U.S. exports to Colombia have risen four-fold over the past decade. Given the Colombian economy’s rapid growth, the agreement’s elimination of trade barriers is projected to spur significant business opportunities and job creation, it said (here).