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, Maryland 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.

Maryland’s Farmers Will Benefit from CTPA

Poultry is Maryland’s leading agricultural export and accounts for more than one-third of total farm receipts. However, Maryland farmers face high barriers to sales in Colombia, including sanitary regulations and tariffs of up to 164% on certain products, such as leg quarters.

CTPA will phase out these tariffs and eliminate nontariff barriers to Maryland’s products. For example, Colombia will not require its Ministry of Agriculture to inspect individual poultry facilities before accepting poultry shipments from Maryland companies.

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

• Fabricated Metal Products 56.4%
• Processed Foods 36.2
• Printing & Publishing 27.9
• Chemicals 22.6
• Machinery 14.9
• Computers & Electronics 8.0

EXPORTS

In 2006, Colombia was Maryland’s 37th largest export market for goods, with exports totaling $28.5 million.

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

• Spice mixes and preparations
• Certain processed foods
• Certain chemicals, including those related to X-ray examinations

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

• Certain poultry products
• Soybean meal and flour
• Certain corn products

The U.S.-Colombia TPA will permit Maryland’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 Maryland’s non-textile and apparel imports from Colombia already enjoy.

Maryland’s Exports to Colombia Will Benefit from Duty Savings and Increased Acces 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 Maryland’s transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over 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) Approximately 70 percent of Maryland’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(d) For chemical products, Colombia will eliminate duties affecting 82 percent of Maryland’s exports immediately upon implementation of the Agreement.

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