U.S., Colombia trade agreement to boost exports
April 6, 2011
WASHINGTON — With many implications for agricultural exports, the Obama administration has reached an agreement with the Colombian government on labor concerns that are a part of the U.S.-Colombia Trade Promotion Agreement. The agreement on the labor issues will help the legislation achieve congressional approval and pave the way for eliminating duties on many agricultural commodities.
The agreement on labor issues with the Colombia government has been titled the “Action Plan Related to Labor Rights,” and will lead to enhanced rights for Colombia workers. Overall, the trade agreement will expand U.S. goods exports by more than $1.1 billion and give certain U.S. goods and services duty-free access in sectors from manufacturing to agriculture. It is expected to increase the U.S. G.D.P. by $2.5 billion and support thousands of U.S. jobs.
“On behalf of G.M.A. and its member companies, I commend the efforts of both President Obama and Colombian President Santos in striking this accord, which is a significant breakthrough in moving toward the ultimate goal, ratification by Congress of the U.S. - Colombia Free Trade Agreement,” said Pamela G. Bailey, president and chief executive officer of the Grocery Manufacturers Association. “With some of the highest tariff rates in South America, to date Colombia has been a relatively small market for U.S. exports. However, with 45 million consumers, including a significant middle class, ratification of the Colombian F.T.A. would result in a significant increase in U.S. exports of food, beverages and consumer product.
“With many of our trading competitors having already completed F.T.A.s with Colombia, as well as with Korea and Panama, we urge the administration to move to the next step, submission to Congress for ratification of all three pending F.T.A.s (with Korea, Colombia, and Panama).”
In 2010 the United States exported $832 million in agricultural products to Colombia, and the agreement would eliminate duties on nearly 70% of U.S. farm exports, including wheat, barley, soybeans, soybean meal and flour, high-quality beef, bacon, fruit and vegetable products, peanuts, whey, cotton and many processed foods. It also eliminates nearly all remaining tariffs on U.S. farm exports within 15 years and immediately provides duty-free tariff rate quotas on standard beef, chicken leg quarters, dairy products, corn, sorghum, animal feeds, rice and soybean oil. It also gives the U.S. equal or preferred treatment against other competitors on key products.
In 2010, the U.S. exported $164 million of wheat and barley to the country as well as $103 million of soybeans and soybean products, and tariffs would be immediately eliminated on these products under the agreement. Additionally, the United States exported $202 million of processed products to Colombia, and most of the products will become duty-free immediately with the rest becoming tariff-free within 10 years. Overall, more than half of current U.S. farm exports to Colombia will become duty-free immediately.