US-Colombia FTA Impact Unclear, But Exporters Eye Opportunity, Says CRS Report
The U.S. benefits of the U.S.-Colombia Trade Promotion Agreement remain unclear two years after the pact went into effect, but agriculture exporters continue to tout the agreement as a means to open the Colombian market, said a Feb. 14 Congressional Research Service (CRS) report on the agreement. The Colombian government has over the past ten years entered into numerous free-trade agreements (FTAs) with European blocs, Latin American countries and Canada, the CRS report said. The U.S.-Columbia pact could help to improve U.S. access to the liberalizing market, say exporters.
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“Prior to passage of the agreement, U.S. exporters were concerned that they were losing market share in the Colombian market as a result of passage of free trade agreements that Colombia has negotiated with other countries,” said the report. “Some U.S. exporters were especially concerned about the Colombia-Canada free trade agreement that entered into force in August 2011. U.S. wheat producers estimated that the falling U.S. share of the Colombian wheat import market was declining even further as a result of the implementation of Colombia’s FTA with Canada.”
Following the immediate elimination of 80 percent of tariffs on U.S. exports of consumer and industry products to Colombia when the agreement went into effect in 2011, Colombia will eliminate an additional 7 percent of tariffs on U.S. exports by 2016. The majority of remaining tariffs will also be eliminated by 2021. Agricultural tariffs will be phased out over three to 19 year periods. “Prior to the FTA entering into force, Colombia applied some tariff protection on all agricultural products,” said the report. “The trade agreement provides immediate duty-free access on 77 percent of all agricultural tariff lines, accounting for 52 percent of current U.S. exports to Colombia. Colombia will eliminate most other tariffs on agricultural products within 15 years.”