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, Massachusetts 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.

Massachusetts’ Chemical Producers Stand to Gain from CTPA

Colombia is already an important market for U.S. plastics producers, accounting for one-third of vinyl chloride exports and 58% of propylene exports. Chemicals are Massachusetts-based companies’ largest export to Colombia, but currently face tariffs of 5% on their most important products.

CTPA will eliminate immediately the tariffs on these plastics, a move that is expected to increase U.S exports by 23%. For Bay State companies, that would equal nearly $3 million per year in additional exports.

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

• Fabricated Metal Products 56.4%
• Vegetables, Fruits, & Nuts 31.6
• Chemicals 22.6
• Machinery 14.9
• Computers & Electronics 8.0

EXPORTS

In 2006, Colombia was Massachusetts’s 42nd largest export market for goods, with exports totaling $36.4 million.

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

• Certain chemicals
• Certain paper products
• Computers and parts

The U.S.-Colombia TPA will permit U.S. financial services firms to establish subsidiaries or branches in Colombia and operate on a crossborder basis.

The CTPA will strengthen intellectual property rights protections for Massachusetts’ designers and manufacturers of software and other hitech products.

IMPORTS

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

Massachusetts’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. The International Trade Commission estimates that U.S. exports of apparel products may experience a small increase in the long run.
(6) Column 1 multiplied by Column 2.
(a) For chemical products, Colombia will eliminate duties affecting 82 percent of Massachusetts’ exports immediately upon implementation of the Agreement.
(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 Massachusetts’ industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(d) More than 80 percent of Massachusetts’ industrial exports will receive immediate duty-free treatment under the Agreement.
(e) Upon implementation of the U.S.-Colombia TPA, 54 percent of the State’s consumer products will receive immediate duty-free treatment. Tariffs on the remaining products will be eliminated in stages over 10 years.

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