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, Illinois 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.
Illinois’ Heavy Equipment Manufacturers Will Benefit from the CTPA
Illinois is home to some of the world’s best-known heavyequipment manufacturers, including Caterpillar, John Deere, and Navistar. With Colombia’s expected investment into its national transportation system, these companies – and their thousands of Illinois employees – stand to be some of the biggest winners from CTPA.
Currently, machinery exports to Colombia face tariffs of 5-15% – as much as $200,000 per large off-highway truck. CTPA will eliminate these tariffs immediately, potentially reducing the cost of Illinois products in Colombia by millions of dollars.
Estimated Increases in U.S. Exports in Sectors Important to Illinois
- Pork Products 72.3%
- Fabricated Metal Products 56.4
- Processed Foods 36.2
- Chemicals 22.6
- Corn 21.0
- Machinery 14.9
EXPORTS
In 2006, Colombia was Illinois’s 30th largest export market for goods, with exports totaling $214 million.
Colombia will eliminate tariffs immediately on Illinois’s leading exports, including:
- Road tractors
- Bulldozers and other construction equipment
- Certain chemicals
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Soybean meal and flour
- Certain corn and feed grains
- Certain pork products
The CTPA will strengthen intellectual property rights protections for Illinois’ designers and manufacturers of specialty chemicals, computers, and other high-value products.
IMPORTS
The U.S.-Colombia TPA will make permanent the duty-free benefits that 93 percent of Illinois’s non-textile and apparel imports from Colombia already enjoy.
Illinois’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 Illinois’ 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 Illinois’ exports immediately upon implementation of the Agreement.
(d) Under the U.S.-Colombia TPA, 91 percent of Illinois’ transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over ten years.
(e) The vast majority of Illinois’ exports of processed food products will receive immediate duty-free treatment under the U.S.-Colombia TPA.
For further information, contact Brigitte Schmidt Gwyn, Director, International Trade & Fiscal Policy 202.496.3263, bgwyn@businessroundtable.org