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, Arkansas 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.
Arkansas’ Farmers Will Benefit from CTPA
Arkansas is the leading U.S. rice exporter, accounting for 46% of total rice exports. Yet as a result of tariff rates that approach 189%, U.S rice exports to Colombia are negligible.
The CTPA will establish duty-free quotas for U.S rice exports and phase out over-rate tariffs over 19 years. When fully implemented, CTPA could raise U.S. rice exports to Colombia to $200 million, a large share of which would certainly accrue to Arkansan rice farmers.
Estimated Increases in U.S. Exports in Sectors Important to Arkansas
- Poultry Products 72.3%
- Fabricated Metal Products 56.4
- Processed Foods 36.2
- Primary Metal Products 44.3
- Paper Products 27.9
- Cotton 10.5
EXPORTS
In 2006, Colombia was Arkansas’s 20th largest export market for goods, with exports totaling $33.7 million.
Colombia will eliminate tariffs immediately on many of Arkansas’s leading exports, including:
- Electric motors
- Steel
- Certain agricultural equipment
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Certain poultry products
- Soybeans
- Cotton
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 Arkansas’s non-textile and apparel imports from Colombia already enjoy.
Arkansas’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) 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.
(b) Approximately 70 percent of Arkansas’ industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(c) 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.
(d) 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