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, New Jersey 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.

New Jersey’s Chemical Manufacturers Will Benefit from CTPA

New Jersey is home to many large chemical companies, including Merck, Schering-Plough, and Johnson & Johnson. Yet these companies currently face tariffs averaging 8% - and ranging up to 20% - on their exports to Colombia.

CTPA will eliminate immediately 82% of chemical tariffs and phase out the rest over 10 years. These changes are expected to raise U.S. chemical exports to Colombia by 23%, which would equal an increase of $20 million from New Jersey companies alone.

Estimated Increases in U.S. Exports in Sectors Important to New Jersey

• Fabricated Metal Products 56.4%
• Processed Foods 36.2
• Fruits, Vegetables & Nuts 31.6
• Printing & Related Services 27.9
• Chemicals 22.6

EXPORTS

In 2006, Colombia was New Jersey’s 29th largest export market for goods, with exports totaling $144.5 million.

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

• Fluorescent light bulbs and other electrical equipment
• Plastics and resins
• Certain chemicals

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

• Fruits and berries
• Soybean meal and flour
• Certain corn products

The CTPA will strengthen intellectual property rights protections for New Jersey’s producers of chemicals, computers, and other hi-tech products.

IMPORTS

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

New Jersey’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. * The International Trade Commission did not estimate the effects of the U.S.-Colombia TPA on exports of waste and scrap.
(a) For chemical products, Colombia will eliminate duties affecting 82 percent of New Jersey’s exports immediately upon implementation of the Agreement.
(b) Approximately 70 percent of New Jersey’s 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) Forty-four percent of New Jersey’s paper exports will receive immediate duty-free treatment under the U.S -Colombia TPA. Duties 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