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, South 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.
South Dakota’s Farmers Will Gain from CTPA
South Dakota is the eighth-largest exporter of soybeans and soybean products in the United States, but its farmers currently face tariffs of 5-20% when selling their products in Colombia.
CTPA will immediately eliminate its 5% tariff on soybeans and 20% tariff on soybean meal and soybean flour, while phasing out tariffs on refined soybean oil over 5 years. As a result of increased market access, exports of soybeans to Colombia are expected to increase by 30-50%, depending on the type of soybean product.
Estimated Increases in U.S. Exports in Sectors Important to South Dakota
- Fabricated Metal Products 56.4%
- Processed Foods 36.2
- Corn 21.0
- Transportation Equipment 16.1
- Machinery 14.9
In 2006, Colombia was South Dakota’s 52nd largest export market for goods, with exports totaling $556,000.
Colombia will eliminate tariffs immediately on South Dakota’s leading exports, including:
- Certain processed foods
- Agricultural and construction machinery
- Certain minerals and ores
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Prime and Choice cuts of beef
- Soybean meal and flour
- Certain corn products
The CTPA will strengthen intellectual property rights protections for South Dakota’s designers and manufacturers of software, computers, and other hi-tech products.
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 South Dakota exports receive permanent and reciprocal access to the growing Colombian market.
South 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.
(6) Column 1 multiplied by Column 2.
(a) Approximately 70 percent of South 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) Ninety-one percent of South Dakota’s transportation equipment exports will receive immediate duty-free treatment. The remaining duties will be eliminated over ten years.
(c) Approximately 46 percent of U.S. exports of ores will receive immediate duty-free treatment under the U.S.- Colombia TPA.
(d) The vast majority of South Dakota’s exports of processed food products will receive immediate duty-free treatment under the U.S.-Colombia TPA.
(e) 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.
For further information, contact Brigitte Schmidt Gwyn, Director, International Trade & Fiscal Policy 202.496.3263, bgwyn@businessroundtable.org