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Texas 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, Texas 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.

Texas’ Chemical Manufacturers Will Benefit from CTPA

In 2006, Texas companies exported nearly $850 million worth of chemicals to Colombia, accounting for half of total U.S. shipments to Colombia. Yet Texas 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 nearly $200 million from Texas companies alone.

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

  • Fabricated Metal Products 56.4%
  • Processed Foods 36.2
  • Chemicals 22.6
  • Machinery 14.9
  • Petroleum & Coal 14.5
  • Cotton 10.5

EXPORTS

In 2006, Colombia was Texas’s 16th largest export market for goods, with exports totaling nearly $1.7 billion.

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

  • Certain chemicals, including PVC
  • Oil exploration equipment
  • Electronics & semiconductors

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

  • Prime & Choice cuts of beef
  • Cotton
  • Certain poultry products

Energy demand is growing in Columbia and the CTPA provides the necessary regulatory transparency and investment opportunities to benefit Texas’ energy services firms.

IMPORTS

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

 

Texas’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. Estimated increase in exports for overall crop production calculated from detailed estimates by the International Trade Commission.
(6) Column 1 multiplied by Column 2.
(a) For chemical products, Colombia will eliminate duties affecting 82 percent of Texas’s exports immediately upon implementation of the Agreement.
(b) Approximately 70 percent of Texas’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 Texas’s electronic products will receive immediate duty-free treatment. For information technology product exports 100 percent will receive immediate duty-free treatment.
(d) Colombia will eliminate all tariffs on Texas’s petroleum and coal products in stages over ten years.
(e) Upon implementation of the Agreement, Texas 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 for the remaining products.

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

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