International Trade Today is a Warren News publication.
Subscriber Login

Product Duty Rates for Korea, Colombia, & Panama FTAs Available

January 11, 2012 by Barbara Chaves|Top News

This is a reminder that the International Trade Administration, Office of the U.S. Trade Representative, and the Commerce Department all have useful information regarding the free trade agreements with Korea, Colombia, and Panama that are awaiting implementation. ITA has a tool that allows users to search each of the pending FTAs by tariff number to see the resulting duty rates over time for qualifying goods. USTR has information on the pending FTAs by sector, as well as fact sheets, legal texts of the three agreements with duty rates, and the implementing legislation. Commerce also has overviews of each.

Sign up for a free preview to unlock the rest of this article

If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.

Start My Free Preview

(See ITT’s Online Archives 11100617 for previous summary of these FTA tools.)

On October 21, 2011, the President signed all three FTA implementing bills and since then, officials from the U.S., Korea, Panama, and Colombia have been working on implementation. See ITT’s Online Archives 11102103, 11112862, 11120624, 11122116, 11122219 for summaries of the President’s signature and USTR updates on FTA implementation progress. None of the three FTAs have yet been implemented.)

ITA Tariff Tool Has Year-by-Year Duty Rates, Etc. for Each FTA

With the ITA’s FTA Tariff Tool, users can see the current and future tariffs applied to their qualifying products, as well as the year in which those products would become duty-free. As the tariff rates are for qualifying goods, each tariff-specific page includes a link to the rules of origin (such as tariff-shift rules for originating goods) and any product-specific rules of origin.

The database covers both exports and imports under the pending FTAs. For example, U.S.-originating exports of vitamin B12 under the KORUS would become duty-free in the first year, from the current duty of 6.5%; and imports of certain South Korea-originating paints and varnishes would become duty-free in the first year, from a current duty of 3.6%.

In addition, by combining sector and product groups, trade data, and the tariff elimination schedules, users can also analyze how various key sectors are treated under the pending FTAs.

Expect to add ag & textile products in coming months. Currently, the database focuses on tariff and trade information for industrial products, with little information on agricultural and textile products. ITA sources state that they expect to add tariff and trade data for agricultural and textile goods to the FTA Tariff Tool within the next couple of months. Once the agricultural and textile goods are added, then the product coverage will be complete (i.e., the tariff tool will cover the entire tariff schedule).

Will add actual phase-out dates once FTAs implemented. Additionally, once ITA receives word on the official implementation dates of the three agreements, it plans to update the tariff tool to show the actual years of the tariff phase outs.

FTA Tariff Tool is available here.

(The site provides the same information for already implemented FTAs. In addition, it has a disclaimer which states that while every effort has been made to ensure accuracy, the actual tariff classification and assessment of duties is up to the customs authorities in the U.S. or the FTA partner countries. See ITT’s Online Archives 11082402 for previous summary of ITA’s FTA tariff tool.)

Complete FTA Texts and All Duty Rates (Including Ag and Textiles) from USTR

The USTR site has the complete text of each of the three pending FTAs as well as the text of the implementing legislation and supporting documentation for each.

Under the legal text of each FTA, there is tariff information for all affected products, national treatment and market access information (including base rates and tariff-reduction staging categories), rules of origin, trade facilitation information, etc. For example:

KORUS Complete Final Text: (partial list of contents follows)

Colombia TPA Complete Final Text: (partial list of contents follows)

Panama TPA Complete Final Text: (partial list of contents follows)

Information by Sector Available on USTR Site

For each of the pending FTAs, USTR also provides information by sector that profiles the current trade and tariff environment for U.S. exporters, summarizes the sector-specific market access results of the agreements (including the overall duty rate reduction schedule for the sector), assesses foreign competition in that market, and describes non-tariff barriers addressed by the agreement for exporters in each sector.

USTR information on the pending FTAs available here.

Many Duty Rates Would Go to Zero Immediately, Others Phase Out over 10 Years

According to Commerce’s overview of each FTA, many duty rates would go to zero immediately with others phasing out over 10 years as follows:

KORUS. Within five years of enactment of the U.S.-South Korea Free Trade Agreement (KORUS), over 95% of bilateral trade in consumer and industrial products would become duty free and most remaining tariffs would be eliminated within 10 years. For agricultural products, KORUS would immediately eliminate or phase out tariffs and quotas on a broad range of products, with almost two-thirds (by value) of Korea’s agriculture imports from the United States becoming duty free upon enactment. KORUS also addresses non-tariff barriers and has provisions on cross-border services, telecommunications, and electronic commerce.

Panama TPA. Under the U.S. Panama Trade Promotion Agreement, over 87% of U.S. exports of consumer and industrial products to Panama will become duty-free immediately, with remaining tariffs phased out over 10 years. U.S. products that will gain immediate duty-free access include information technology equipment, agricultural and construction equipment, aircraft and parts, medical and scientific equipment, environmental products, pharmaceuticals, fertilizers, and agro-chemicals. U.S. agricultural exports will also benefit. Panama will immediately eliminate duties on high-quality beef, frozen turkeys, soybeans, soybean meal, crude soybean and corn oil, almost all fruit and fruit products, wheat, peanuts, whey, cotton, and many processed products.

Colombia TPA. Under the U.S.-Colombia Trade Promotion Agreement, over 80% of U.S. exports of consumer and industrial products to Colombia would become duty free immediately, with remaining tariffs phased out over 10 years. Key U.S. exports would gain immediate duty-free access to Colombia, including almost all products in the agriculture and construction equipment, aircraft and parts, auto parts, fertilizers and agro-chemicals, information technology equipment, medical and scientific equipment, and wood sectors.

Commerce information available here.