The U.S.-Colombia Trade Promotion Agreement (Colombia TPA) is a key building block in the U.S. strategy to advance free trade within the Western Hemisphere. The agreement 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 in the Colombian market.
Colombia is already an important market for America’s farmers and ranchers. In 2010, the United States exported $832 million of agricultural products to Colombia. Top U.S. exports were wheat, corn, cotton, soybeans, and corn gluten feed.
Upon implementation of the Colombia TPA, U.S. exporters will receive immediate duty-free treatment on products accounting for almost 70 percent of current trade. Currently, no U.S. agricultural exports enjoy duty-free access to Colombia.
Most Colombian applied tariffs range from 5 percent to 20 percent for agricultural products. 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 to 388 percent.
Under the Colombia TPA, Colombia will immediately eliminate its price band system, which affects more than 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.