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Detailed Fact Sheet
The U.S.-Colombia Trade
Promotion Agreement (CTPA) is a key building block in the U.S. strategy
to advance free trade within the hemisphere. In 2007, the
United States exported a record $1.2 billion of agricultural products to
Colombia, but those exports have faced close to $140 million in tariffs
over the past two years. The agreement achieves two
key trade objectives for the United States: it makes agricultural trade
a two-way street, and it levels the playing field with respect to third
country competitors in the Colombian market.
Upon implementation of the
CTPA, U.S. exporters will receive immediate duty-free treatment on
products accounting for more than half the value of current trade.
Currently, no U.S. agricultural exports enjoy duty-free access to
Colombia. In contrast, over 99.9 percent of Colombia’s current exports
already receive duty-free treatment into the U.S. market under the
Andean Trade Promotion and Drug Eradication Act (ATPDEA), legislation
passed through the Congress in 2002 and reauthorized through December
31, 2008.
Most Colombian applied
tariffs range from 5 percent to 20 percent for agricultural products,
and in many cases these tariffs restrict U.S. exports. Moreover, there
is no assurance that Colombia will not raise tariffs to its permitted
World Trade Organization (WTO) limits (or tariff bindings), which range
from 15 percent up to 388 percent.
Under the CTPA, Colombia will
immediately eliminate its price band system, which affects over 150
products, including corn, rice, wheat, oilseeds and products, dairy,
pork, poultry, and sugar. Under the current price band system, the
tariffs on these products vary with world prices and may reach up to
Colombia’s WTO bound rates.
Key Elements of the Agreement
Market Access. No products are
excluded from the CTPA. Liberalization of Colombia’s market will occur
through tariff elimination for all commodities combined with zero-duty,
tariff-rate quotas (TRQ) on commodities for which tariff elimination
takes place over longer periods. The agreement immediately eliminates
Colombia’s use of Andean Price Bands (variable tariffs), thereby
ensuring that Colombia stops applying high duties resulting from the
application of this mechanism. The United States will receive equal or
preferential treatment vis-à-vis third party competitors on all key
products under the agreement.
Tariff Elimination. Colombia
currently applies some tariff protection on all agricultural products.
Under the CTPA, tariff phase-outs range from immediate duty-free access
to a maximum phase-out of 19 years. Tariffs on 77 percent of all
agricultural tariff lines, accounting for over 52 percent of current
trade by value, will be eliminated on entry into force of the
agreement. Colombia will eliminate most other tariffs within 15 years,
including many within the first 5 years. As a general rule, virtually
all tariffs will be reduced in equal annual installments over the agreed
phase-out period, with the first tariff cut made on entry-into-force of
the agreement.
Tariff-Rate Quotas (TRQs).
For some products with longer tariff phase-outs, immediate duty-free
market access will be provided through the creation and annual expansion
of TRQs (providing duty-free access for a specified quantity of
imports). Annual TRQ growth is on a compound basis for U.S.
agricultural exports. .
Safeguards.
The CTPA includes volume-based
agricultural safeguards for a limited number of products covered by TRQs.
The safeguard triggers are set as a percentage of the growing TRQ
quantities. Increased tariffs resulting from the triggering of a
safeguard can only be maintained for the remainder of the year they are
invoked. The availability of using an agricultural safeguard expires
when the tariff for that product has been phased-out.
Sanitary and Phytosanitary
Measures. The
United States and Colombia have worked to resolve sanitary and
phytosanitary (SPS) barriers to agricultural trade. Colombia opened its
market on October 27, 2006, to all U.S. beef and products, other than
specified risk materials, from animals of any age.
Additionally, Colombia is finishing up a
science-based review of the U.S. surveillance and inspection system for
poultry with the goal of allowing imports of poultry products from all
states. Colombia also agreed to recognize the U.S. meat and poultry
inspection system as equivalent to its own system. The United States
and Colombia agreed to establish an SPS Committee to expedite
resolution of technical issues.
Export Subsidies.
The parties agreed not to use export
subsidies on products shipped into each other’s market except to compete
with third party export subsidies.
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Specific Products
Beef. In 2007, the United States
exported $386,000 of beef and beef products to Colombia. Colombia’s WTO
tariff bindings on beef range from 70 to 108 percent, with applied
tariffs ranging from 5 to 80 percent. Under the CTPA, the United States
secures immediate duty-free treatment on products most important to the
U.S. beef industry: high quality, USDA Prime and Choice beef cuts. All
other tariffs on beef and beef products will be eliminated within 15
years and earlier in a number of cases. For standard quality beef cuts,
the agreement provides for immediate duty-free access through a
2,100-ton TRQ with a 5 percent annual growth. Colombia will phase-out
the 80 percent out-of-quota tariff over 10 years after a 37.5 percent
cut at the beginning of the first year of implementation. Additionally,
the agreement establishes a 4,642-ton duty-free TRQ for beef variety
meats (offals) with 5.5 percent annual growth. Colombia will phase-out
the 80 percent out-of-quota tariff over 10 years with a 37.5 percent cut
immediately upon implementation of the agreement. If imports surge,
Colombia will have the right to use safeguards during the implementation
period on standard quality beef only.
The United States will establish a 5,250-ton beef TRQ with 5 percent
growth as part of the agreement. The U.S. 26 percent out-of-quota
tariff on beef will be phased out over 10 years. Additionally, if
imports surge during the implementation period, the United States will
have the right to use a volume-based safeguard that will impose higher
tariffs on additional over-quota imports. Other U.S. beef tariffs on
imports from Colombia are zero under the ATPDEA. The CTPA will continue
the zero-duty treatment of these products.
Pork. In 2007, the United States
exported $6.6 million of pork and pork products to Colombia. Colombia’s
WTO tariff bindings on pork range from 70 to 108 percent. Colombia’s
applied tariff rates range from 20 to 30 percent on some products, while
other products are subject to Colombia’s price bands with tariffs
ranging from zero percent up to the WTO bound rate, depending on world
prices. The agreement provides for tariff phase-outs on most key pork
products within 5 years, including immediate tariff elimination for
bacon and pork skin. All other pork tariffs will be eliminated within
10 years.
Under the ATPDEA, U.S. tariffs on imports from Colombia currently are
zero. The CTPA continues this zero-duty treatment.
Poultry.
In 2007, the United States exported $11.6
million of poultry and poultry products to Colombia. Colombia’s WTO
tariff bindings on poultry range from 70 to 209 percent. Colombia’s
applied tariff rates range from 5 to 20 percent on some products while
other products are subject to Colombia’s price bands with tariffs
ranging from zero percent up to the WTO bound rate, depending on world
prices. The United States secures a 27,040-ton TRQ at zero duty with 4
percent annual growth for chicken leg-quarters. Colombia will phase-out
the out-of-quota tariff of 164.4 percent for fresh, chilled and frozen
chicken leg-quarters and of 70 percent for processed chicken
leg-quarters over 18 years with a grace period during the first 6
years. Colombia will have access to a safeguard on chicken leg-quarters
in the event of an annual import surge during the 18-year tariff
phase-out period.
Colombia will also establish a zero-duty,
412-ton TRQ with 3 percent annual growth for “spent fowl,” typically
post-production layers. The 45 percent above-quota tariff on spent
fowl will be phased-out over 18 years. Colombia will have access to a
safeguard on spent fowl in the event of an annual import surge during
the 18-year implementation period.
The CTPA immediately eliminates tariffs on most
other poultry products and on the rest within 10 years.
Under the ATPDEA, U.S. tariffs on imports from Colombia currently are
zero. The CTPA continues this zero-duty treatment.
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Dairy.
In 2007, the United States exported
$6.6 million of dairy and dairy products to Colombia.
Colombia’s WTO tariff bindings on
dairy products range from 70 to 159 percent, with applied tariffs on
many products subject to price bands that can range up to the WTO bound
rates. Two tariff lines for whey will be eliminated upon entry into
force, while a third covering other milk protein concentrates will be
phased out over 3 years. Additionally, U.S. exporters will have access
to six product-specific dairy TRQs, all at zero duty. All of the dairy
TRQs will have duty-free quantities growing at a 10 percent annual
growth rate over the transition period. A 5,500-ton TRQ is established
for milk powder with an out-of-quota base tariff of 33 percent, phased
out over 15 years. A 2,310-ton TRQ for various cheeses has out-of-quota
tariffs of 20 and 33 percent, with these tariffs phased out over 15
years. Colombia will provide duty-free access for butter through a
550-ton TRQ and for ice cream through a 330-ton TRQ. Colombia will
phase-out the butter out-of-quota tariff of 33 percent and the ice cream
out-of-quota tariff of 20 percent over 11 years. Colombia will
establish a 110-ton yogurt TRQ and phase-out the 20 percent tariff over
15 years. Finally, Colombia will establish a 1,100-ton processed dairy
products TRQ and will phase-out the 20 percent tariff over 15 years.
Colombia will immediately eliminate or phase-out over 5 years all other
dairy tariffs.
The United States agreed to establish
TRQs for cheese (5,060 tons, out-of-quota tariffs phased out over 15
years); butter (2,200 tons, out-of-quota tariffs phased out over 11
years); processed dairy products (2,200 tons, out-of-quota tariffs
phased out over 15 years); ice cream (330 tons, out-of-quota tariff
phased out over 11 years), and fluid milk and cream (110 tons,
out-of-quota tariffs phased out over 11 years). Under CTPA, the United
States will continue to provide zero-duty treatment to dairy product
tariffs currently receiving zero-duty treatment under the ATPDEA.
Vegetables. In
2007, the United States exported $1.6 million of fresh and processed
vegetables and products to Colombia. Colombia’s WTO tariff bindings on
vegetables and products range from 70 to 102 percent, with applied
tariff rates ranging from 5 to 20 percent. The United States obtains
duty-free access on most vegetables and vegetable products in the CTPA
with tariffs for almost all others phased out over 5 years.
Potatoes and Products.
In 2007, the United States exported $1.6
million of potatoes and products to Colombia. Colombia’s WTO tariff
bindings on potatoes and potato products range from 70 to 102 percent,
with applied tariff rates ranging from 5 to 20 percent. All fresh
potato tariff lines and almost all processed potato lines, including
frozen fries, potato flakes, and potato chips, will receive immediate
duty-free access to Colombia upon entry into force of the agreement.
Under the ATPDEA, U.S. tariffs on almost all vegetables and vegetable
product imports from Colombia currently are zero. The CTPA continues
its zero-duty treatment. All other tariffs will be phased out within 10
years.
Fruits and Tree Nuts. In
2007, the United States exported $15.2 million of fruits and tree nuts
to Colombia. Colombia’s WTO tariff bindings on fruits and tree nuts
range from 20 to 140 percent, with applied tariff rates ranging from 5
to 20 percent. The CTPA provides immediate duty-free access to Colombia
for all U.S. fresh and processed fruits, including apples, grapes,
cherries, pears, stone fruit, and citrus, as well as all fresh and
processed tree nuts, such as almonds and pistachios.
Under the ATPDEA, U.S. tariffs on
imports from Colombia currently are zero. The CTPA continues this
zero-duty treatment.
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Dry Peas, Beans, and Lentils.
In 2007, the United States exported
$3.5 million of dry peas, beans, and lentils to Colombia. Colombia’s
WTO tariff bindings on dry peas, beans and lentils range from 15 to 178
percent, with applied tariff rates ranging from 5 to 60 percent.
Colombia will immediately eliminate tariffs on dried peas and dried
lentils. It will also provide immediate duty-free access for dried
beans through a 15,750-ton TRQ with 5 percent compound annual growth.
Colombia will phase-out the out-of-quota tariff of 60 percent over 10
years using a non-linear staging formula that includes a 33 percent cut
at the beginning of the first year.
Under the ATPDEA, U.S. tariffs on imports from Colombia currently are
zero. The CTPA continues this zero-duty treatment.
Wheat and Barley. In
2007, the United States exported $210 million of wheat and barley to
Colombia. Colombia’s WTO tariff bindings on wheat and barley range from
90 to 248 percent. Colombia’s applied tariff rates range from 5 to 20
percent on some grain types with some subject to Colombia’s price bands
with tariffs ranging from zero percent up to the WTO bound rate,
depending on world prices. Colombia’s tariffs on all wheat and wheat
products, as well as all barley and barley products, except feed barley,
will be immediately eliminated. Tariffs on feed barley will be
eliminated on January 1, 2009.
Under the ATPDEA, U.S. tariffs on barley imports from Colombia currently
are zero. The CTPA continues this zero-duty treatment.
Feed Grains
Yellow Corn. In 2007, the United
States exported $500 million of yellow corn to Colombia. Colombia’s WTO
tariff binding on yellow corn is 194 percent with applied tariff rates
subject to Colombia’s prices band system under which tariffs range from
zero percent up to the WTO bound rate, depending on world prices. Under
the agreement, Colombia will provide immediate duty-free access through
a 2.1-million ton TRQ with 5 percent annual growth. Colombia will
phase-out the out-of-quota tariff of 25 percent over 12 years.
White Corn.
In 2007, the United States exported $16 million of white corn to
Colombia. Colombia’s WTO tariff binding on white corn is 194 percent
with the applied tariff rate subject to Colombia’s price band system
under which tariffs range from zero percent up to the WTO bound rate,
depending on world prices. Under the agreement, Colombia will provide
immediate duty-free access through a 136,500-ton TRQ with 5 percent
annual growth. Colombia will phase-out the out-of-quota tariff of 20
percent over 12 years.
Sorghum. In 2007, the United States
exported $61,000 of sorghum to Colombia. Colombia’s WTO tariff binding
on sorghum is 132 percent with the applied tariff rate subject to
Colombia’s price band system under which tariffs range from zero percent
up to the WTO bound rate, depending on world prices. Under the
agreement, Colombia will provide immediate duty-free access through a
21,000-ton TRQ with 5 percent annual growth. Colombia will phase-out
the out-of-quota tariff of 25 percent over 12 years.
Animal Feeds and Pet Food. In 2007,
the United States exported $66 million of animal feeds and pet food to
Colombia. Colombia’s WTO tariff bindings on animal feeds and pet food
products are 97 percent. Colombia’s applied tariff rates range from 5
to 20 percent on some products while others are subject to Colombia’s
price bands with tariffs ranging from zero percent up to the WTO bound
rate, depending on world prices. Under the agreement, Colombia will
provide immediate duty-free access for various animal feeds through a
194,250-ton TRQ with 5 percent annual growth. The out-of-quota tariffs
for these animal feeds are either 10 or 25 percent. They will be
phased-out over 12 years.
Under the CTPA, Colombia will provide immediate
duty-free access for pet food through an 8,640-ton TRQ with 8 percent
annual growth. The out-of-quota tariff of 28 percent will be phased out
over 8 years.
Under the ATPDEA, U.S. tariffs on imports of all
feed grains from Colombia are currently zero. The CTPA continues this
zero-duty treatment.
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Rice.
In 2007, the United States exported $1.1
million of rice to Colombia. Colombia’s WTO tariff bindings on rice and
rice products range from 131 to 189 percent. Colombia’s applied tariff
rates range from 5 to 80 percent on some products, while tariffs on
other products are subject to Colombia’s price bands with tariffs
ranging from zero percent up to the WTO bound rate, depending on world
prices. Colombia will provide immediate duty-free access on rice
through a 79,000-ton TRQ (milled rice equivalent basis) with 4.5 percent
annual growth. Colombia will phase-out the 80 percent out-of-quota
tariff for rice over 19 years with a grace period during the first 6
years. A safeguard on rice will be available in the event of an annual
import surge. The rice flour tariff and tariffs for bran, sharps, and
other milled rice residues will be phased out over 5 years.
Under the ATPDEA, U.S. tariffs on imports from Colombia are currently
zero. The CTPA continues the zero-duty treatment.
Soybeans and Soybean
Products. In
2007, the United States exported $175 million of soybeans and soybean
products to Colombia. Colombia’s WTO tariff bindings on soybeans and
soybean products range from 75 to 150 percent. Colombia’s applied
tariff rates range from 5 to 20 percent on some products while other
products are subject to Colombia’s price band system with tariffs
ranging up to the WTO bound level, depending on world prices. Colombia
will immediately eliminate tariffs on soybeans and soy meal and flour.
Colombia will provide immediate duty-free access for crude soybean oil
through a 31,200-ton TRQ with four percent annual growth. Colombia will
phase-out the out-of-quota tariff of 24 percent for crude soybean oil
over 10 years. Colombia will phase-out its 24 percent tariff for
refined soybean oil over 5 years.
Under the ATPDEA, U.S. tariffs imports from Colombia are currently
zero. The CTPA continues this zero-duty treatment.
Peanuts and Peanuts Products.
In 2007, the United States exported $93,000
of peanuts and peanut products to Colombia. Colombia’s WTO tariff
bindings on peanuts and peanuts products range from 70 to 155 percent.
Colombia’s applied tariff rates range from 5 to 20 percent on some
products while tariffs on other products are subject to Colombia’s price
band system with rates ranging up to the WTO bound level, depending on
world prices. Under the agreement, Colombia will immediately eliminate
tariffs on peanuts, peanut oil and peanut products.
The United States has agreed to phase-out tariffs on peanuts and peanut
products over 15 years. Under the ATPDEA, U.S. tariffs on Colombian
peanut oil imports are currently zero. The CTPA continues this
zero-duty treatment.
Sugar and Sweeteners.
In 2007, the United States exported $9.4
million of sugar and sweeteners to Colombia. Colombia’s WTO tariff
bindings on sugar and sweeteners range from 100 to 130 percent.
Colombia’s applied tariff rates range from 5 to 20 percent on some
products while other products are subject to Colombia’s price band
system with tariffs ranging up to the WTO bound level, depending on
world prices. Under the agreement, Colombia will provide immediate
duty-free access for glucose through a 10,500-ton TRQ with 5 percent
annual growth. Colombia will phase-out the out-of-quota tariff for
glucose of 28 percent over 10 years. Colombia will phase-out all other
tariffs on sugar and sweeteners within 15 years, and in many cases
fewer, including 9 years for high fructose corn syrup.
The United States agreed to provide Colombia
with a 50,000-ton TRQ for sugar and sugar products covered by the WTO
TRQ at zero duty, with the quantity growing at a 1.5 percent simple
annual growth rate. Colombia must be a net exporter to qualify to
export this duty-free tonnage. There is also a sugar compensation
mechanism under the agreement that enables the United States to provide
compensation in lieu of accepting duty-free imports under the zero-duty
treatment. The United States will provide no additional preferential
access and will not reduce the out-of-quota duty for sugar and sugar
products covered by the WTO TRQ.
Processed Products.
In 2007, the United States exported $44
million of processed products to Colombia. Colombia’s WTO tariff
bindings on processed products range from 70 to 143 percent, with
applied tariff rates ranging from 5 to 20 percent. Under the agreement,
most products will immediately enter Colombia duty-free. All others
will enter free of tariffs in 10 years or less. Additionally, Colombia
will provide immediate duty-free access for pet food through an
8,640-ton TRQ with eight percent annual growth. Colombia will set the
out-of-quota pet food tariff at 28 percent with an 8-year phase-out.
Under the ATPDEA, U.S. tariffs on imports from Colombia are currently
zero. The CTPA continues the zero-duty treatment.
Tobacco.
In 2007, the United States exported $654,000
of tobacco to Colombia. Colombia’s WTO tariff bindings on tobacco are
70 percent, with applied tariffs ranging from 10 to 20 percent.
Colombia will immediately eliminate tariffs on all tobaccos and tobacco
products.
Under the ATPDEA, U.S. tariffs on certain tobacco products, including
cigarettes, currently are zero. The CTPA continues the zero-duty
treatment. Additionally, the United States will establish a 4,200-ton
TRQ with zero duty for products included in the WTO TRQ. The TRQ will
grow at a 5 percent annual rate and the over-quota tariff will be
phased-out over 15 years.
Cotton.
In 2007, the United States exported $59
million of cotton to Colombia. Colombia’s WTO tariff bindings on cotton
range from 70 to 99 percent, with applied tariff rates of 10 percent.
Under the agreement, Colombia will immediately eliminate cotton tariffs.
The United States agreed to eliminate all cotton tariffs upon entry into
force of the agreement.
Agricultural Imports from Colombia
U.S. agricultural imports from Colombia were valued at $1.6 billion in
2007, largely unchanged from the previous year. Colombia’s shipments
are mostly limited to a few tropical and other horticultural products,
about half of which do not compete with U.S.-grown products. Raw coffee
beans with sales of $677 million, nursery products at $519 million, and
bananas at $157 million top the list and account for 90 percent of total
U.S. purchases from Colombia.
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