U.S.-Colombia trade agreement in force

May 18, 2012

Last Tuesday marked the first day of the U.S. and Colombia Trade Promotion Agreement, or Colombia TPA, after years of political debate.

According to Ag Secretary Tom Vilsack, U.S. agricultural exporters will now receive duty-free access on more than half of the products we currently export to Colombia, and virtually all remaining tariffs will be eliminated within 15 years. Estimates show that the tariff reductions in the U.S.- Colombia TPA will expand total U.S. exports by more than $1.1 billion, supporting thousands of additional American jobs while increasing U.S. Gross Domestic Product by $2.5 billion.

“For agriculture, the agreement with South America’s third-largest economy achieves two key trade objectives for the United States: it immediately provides vastly improved access to Colombia’s market, and it levels the playing field with respect to third-country competitors,” Vilsack said in a statement.

“Last year, the United States exported $1.1 billion of agricultural products to Colombia. Under the agreement, American farmers and ranchers can expect to see their exports grow by more than $370 million, or more than one-third of the current total,” he added.

Colombia will immediately eliminate duties on wheat, barley, soybeans, soybean meal and flour, high-quality beef, bacon, almost all fruit and vegetable products, wheat, peanuts, whey, cotton, and the vast majority of processed products. The Colombia TPA also provides duty free tariff rate quotas on standard beef, chicken leg quarters, dairy products, corn, sorghum, animal feeds, rice, and soybean oil.

The agreement has had its share of controversy and delays in both countries. The agreement was signed in 2006 but was not brought to the U.S. Congress for approval until last year. It spent six years caught in the typical Democrat versus Republican battle, with heated discussion between human rights groups in both countries.

The Colombia TPA moved forward after Colombia agreed to a Labor Action Plan to strengthen protection for organized labor leaders. But according to the National Labor School, a labor union research center, the Colombian government has only implemented 28 out of the 37 commitments included in the labor plan.

According to news report in Bogata, Colombia, the agreement came to life last week with the arrival of 4,200 boxes of fresh-cut Colombian roses, carnations, astromelias, and the delivery of a high-end Harley-Davidson in Bogota. Six years after the agreement was first signed, both the flowers and the motorcycle entered the countries tariff-free under the bilateral pact. But celebrations were dampened when a bomb exploded on a busy commercial street in downtown Bogota. Though it is unclear whether the bombing is related to the agreement, it is a reminder that Colombia remains a nation in conflict.

But despite the conflicts, U.S. ag groups see more positives than negatives out of the pact.

Steve Wellman, president of the American Soybean Association and a soybean farmer from Syracuse, NE, says the pact expands a valuable and growing export market for American soybeans, meal, oil and products that require soy inputs like dairy, meat and poultry. “The agreement also helps us regain lost market share in Central and South America’s third largest economy. Last year, the U.S. exported more than $182 million in soybeans and soybean products to Colombia,” he said.

“In 2010, the president committed to double U.S. exports in five years. Two years later, we are on pace to meet that goal,” Vilsack said. — Traci Eatherton, WLJ Editor