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North Dakota and Colombia – A Growing Partnership

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, North Dakota 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.

North Dakota’s Farmers Will Benefit from CTPA

North Dakota is one of the leading U.S. exporters of wheat and barley, yet these products face Colombian tariffs that - because of a variable rate system - can reach up to 248%.

CTPA will eliminate immediately both the tariff band system and tariffs on wheat products and barley (except feed). CTPA also will eliminate upon implementation its 80% tariff on the most important beef products: USDA prime and choice cuts.

Estimated Increases in U.S. Exports in Sectors Important to North Dakota

  • Wood Products 72.6%
  • Fabricated Metal Products 56.4
  • Processed Foods 36.2
  • Transportation Equipment 16.1
  • Machinery 14.9
  • Wheat 11.2

EXPORTS

Exports In 2006, Colombia was North Dakota’s 29th largest export market for goods, with exports totaling $3.8 million.

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

  • Construction and excavation machinery
  • Polymers and resins
  • Certain wood products

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

  • Wheat and barley
  • Prime and Choice cuts of beef
  • Certain corn products

As demand for consulting, data processing, accounting, and other business services increases, the CTPA ensures that North Dakota’s business services providers will receive transparent and fair treatment.

Colombian Products Already Receive Broad Access to U.S. Market

In 2006, the average U.S. tariff on imports from Colombia was 0.2 percent, compared to average tariffs of 10 - 20 percent on U.S. exports to Colombia.

The U.S.-Colombia TPA will make permanent the duty-free benefits granted to Colombia under the Andean Trade Promotion and Drug Eradication Act and the Generalized System of Preferences programs and ensure that North Dakota exports receive permanent and reciprocal access to the growing Colombian market.

North Dakota’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. Estimated increase in exports for overall crop production calculated from detailed estimates by the 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. * Special classification products include donated clothing, food, and goods, Colombian goods repaired in the United States, as well as other miscellaneous products. The Department of Commerce and the International Trade Commission did not estimate the effects of the U.S.-Colombia TPA on these products.
(a) Approximately 70 percent of North Dakota’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(b) Upon implementation of the Agreement, U.S. exporters of agricultural products will receive duty-free treatment on products accounting for nearly 52 percent of current trade and will see all tariffs phased out forthe remaining products.
(c) Colombia will eliminate tariffs on 60 percent of U.S. plastics exports and 59 percent of rubber exports immediately upon the implementation of the Agreement.
(d) Ninety-one percent of North Dakota’s transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over ten years.

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

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