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, Utah 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.
Utah’s Auto Parts and Aerospace Manufacturers Will Benefit from CTPA
Transportation equipment makers, such as Autoliv and Boeing, are some of Utah’s largest employers, accounting for 12% of all manufacturing employment in the State. Yet these companies face tariffs of 5- 35% when selling their products in Colombia.
CTPA will eliminate immediately 91% of all tariffs on transportation equipment and phase out the rest over 10 years. Auto parts producers in particular stand to gain, as exports of motor vehicle parts are expected to increase by 44%.
Estimated Increases in U.S. Exports in Sectors Important to Utah
- Fabricated Metal Products 56.4%
- Primary Metals 44.3
- Processed Foods 36.2
- Chemicals 22.6
- Transportation Equipment 16.1
EXPORTS
In 2006, Colombia was Utah’s 41st largest export market for goods, with exports totaling $6.7 million.
Colombia will eliminate tariffs immediately on Utah’s leading exports, including:
- Certain chemicals, including vitamins
- Various sporting goods
- Certain processed foods
Colombia also will eliminate tariffs immediately on many farm products, such as:
- Prime and Choice cuts of beef
- Certain dairy products
- Wheat and barley
The U.S.-Colombia TPA will permit Utah’s financial services firms to establish subsidiaries or branches in Colombia and operate on a cross-border basis.
IMPORTS
The U.S.-Colombia TPA will make permanent the duty-free benefits that 93 percent of Utah’s non-textile and apparel imports from Colombia already enjoy.
Utah’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.* 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 68 percent of Utah’s electronic products will receive immediate duty-free treatment. For information technology product exports 100 percent will receive immediate duty-free treatment..
(b) More than 80 percent of Utah’s industrial exports will receive immediate duty-free treatment under the Agreement
(c) Approximately 70 percent of Utah’s industrial equipment exports will receive immediate duty-free treatment. The remaining 30 percent of products will be duty-free within ten years.
(d) The vast majority of Utah’s exports of processed food products will receive immediate duty-free treatment under the U.S.-Colombia TPA.
For further information, contact Brigitte Schmidt Gwyn, Director, International Trade & Fiscal Policy 202.496.3263, bgwyn@businessroundtable.org