Washington Council on International Trade
The U.S.-Colombia FTA Deserves a Vote!
Background: The U.S. and Colombian governments signed the U.S. Colombian Free Trade Agreement (FTA) in November, 2006. They additionally agreed to incorporate the labor and environmental provisions based on the bipartisan agreement on trade reached between Congress and the Administration on May 10, 2007. Worried that Congress would run out of time in the legislative session and eager to see the implementation of this agreement, President Bush sent the Colombia deal to Congress in April of this year. The precedent has been for the President to work with the House Speaker, ensuring that the body is prepared for the vote. However he did not do this with the Colombia bill, and House democrats accused the President of trying to force a vote on a trade bill against their wishes, as they did not have enough votes to successfully pass the agreement.
A day after receiving the Colombia FTA, the House Democratic leadership decided to schedule a vote to change the rules and suspend the 90 day clock to move the legislation thru Congress. The House passed the vote on this rule change, and the Colombia agreement is now stalled until the House Leadership decides it wants to consider the agreement. Under Trade Promotion Authority, or Fast Track, when Congress receives a trade agreement, Fast Track rules stipulate that the agreement must be voted up or down, without amendment, and establish a timeline of 90 day movement through the House and Senate for passage.
The result is that three pending Free Trade Agreements – Colombia, Panama and Korea – are now on hold indefinitely.
WCIT strongly urges Congress to allow the Colombia Free Trade Agreement to be voted on, according to the merits of the agreement, before the end of this year.
U.S. - Colombia Trade Facts
- The Colombia FTA would significantly level the playing field and provide greater access to the Colombian market for American business, farmers, ranchers, and workers.
- Currently, more than 90 percent of Colombian goods enter the U.S. duty-free, while U.S. exports face tariffs of up to 35 percent. Upon implementation of the agreement, over 80 percent of U.S. consumer and industrial exports to Colombia would be duty-free immediately.
| Tariff Changes Under Proposed FTA | ||
|---|---|---|
| Exported Product | Current Tariff | Tariff Under FTA |
| Apples | 15% |
0% |
| Cherries | 15% |
0% |
| Machinery Manufactures | 11% |
0% |
| Transportation Equipment | 13% |
0% |
| Frozen French Fries | 20% |
0% |
| Wheat | Up to 35% |
0% |
- Currently, no U.S. agricultural products enter the Colombian market duty-free, and these products face duties of up to 35 percent. Upon implementation of the agreement, 77 percent of U.S. agricultural exports will receive duty-free treatment.
- Since the agreement’s finalization in November 2006, American exports have faced over $1 billion in Colombian tariffs. The implementation of the Colombia FTA, and the elimination of most tariffs, is estimated to increase U.S. exports to Colombia by approximately $1.1 billion annually.
- More than 9,000 U.S. companies export to Colombia, of which 8,000 are small and medium-sized firms.
- Total U.S. exports to Colombia reached $8.6 billion in 2007, an increase of 27.6 percent from 2006.
- Colombia is the largest market for US agriculture exports in South America and is the fourth largest US trading partner in Latin America.
Washington - Colombia Trade Facts
| Washington's Top 10 Exports to Colombia (in $ thousands) | ||||||
|---|---|---|---|---|---|---|
| Rank | Commodity | 2006 | 2007 | 2008 | % Change 06-07 | % Change 07-08 |
| Total | All | 23,824 | 30,888 | 43,190 | 29.65 | 39.83 |
| 1 | Industrial Machinery, incl. Computers | 3,413 | 4,787 | 8,768 | 40.25 | 83.16 |
| 2 | Mineral Fuel,Oil, Etc. | 0 | 0 | 6,430 | n/a | n/a inf. |
| 3 | Edible Fruits, Nuts | 7,960 | 6,515 | 6,246 | -18.15 | -4.13 |
| 4 | Oil Seeds, Misc Grain, Etc. | 1,277 | 3,143 | 3,954 | 146.11 | 25.78 |
| 5 | Electric Machinery | 2,529 | 4,213 | 3,665 | 66.57 | -13.0 |
| 6 | Optic, Photo, Etc | 1,806 | 2,420 | 3,512 | 34.01 | 45.11 |
| 7 | Gums and Resins | 1,971 | 2,461 | 2,561 | 24.87 | 4.09 |
| 8 | Edible Vegetables and Certain Roots | 373 | 647 | 1,437 | 73.25 | 122.13 |
| 9 | Prep Veg, Fruits, Nuts and other Plants | 837 | 1,204 | 1,406 | 43.76 | 16.81 |
| 10 | Paper and Paperboard Products | 387 | 332 | 1,278 | -14.23 | 284.9 |
Why the Colombia FTA is Good For Washington State:
The FTA Will Open Up a Significant Market for Washington State Exports
- Washington State would be among the biggest beneficiaries of this trade agreement.The Colombia FTA would boost Washington State exports by making our goods more affordable to Colombians.
- As a comparison, since the implementation of the U.S.-Chile FTA in 2004, Washington State exports have increased by an impressive 1,676 percent. Since NAFTA was implemented in 1994, Washington State exports to Canada and Mexico have increased by 316 percent.
- In 2008, Washington State exports to Colombia totaled $43.19 million, an increase of 39.8% and 81% over 2007 and 2006 totals respectively. This is also a staggering 210% increase since 2002!
- It is projected that once duty-free status is implemented, Washington State exports to Colombia would increase between 8 and 37 percent over normal patterns.
The Colombia FTA Will Level the Playing Field:
- Current Colombian tariffs on transportation equipment are as high as 15 percent, and products will be immediately duty-free once the agreement is implemented. For computers and electronic products, over 99 percent of U.S. exports will receive immediate duty-free treatment.
- With machinery manufactures, seventy percent of infrastructure and machinery products, such as filtration equipment, pumps and compressors, and printing machinery, would be duty-free immediately. Most agricultural and construction equipment also receives duty-free treatment.
Important Materials
U.S. – Colombia Trade Promotion Agreement
Brief summary by the Office of the U.S. Trade Representative
Read. (pdf)