U.S. – Colombia Free Trade Agreement
On October 21, 2011, President Obama signed legislation approving the U.S.-Colombia Trade Promotion Agreement – CTPA or more commonly referred to as FTA. However before the agreement can enter into force, Colombia must be able to demonstrate that it is in compliance with those obligations that will take effect on day one. The respective legislative and regulatory reforms that Colombia must put in place may take between 18-24 months.
The Colombia FTA is a comprehensive free trade agreement, which not only reduces tariffs but also includes important disciplines relating to customs administration and trade facilitation, technical barriers to trade, government procurement, investment, telecommunications, electronic commerce, intellectual property rights, and labor and environmental protection.
The U.S. International Trade Commission estimates that the elimination of tariffs and related barriers in Colombia will increase U.S. Gross Domestic Product by nearly $2.5 billion and U.S. merchandise exports by $1.1 billion. Over 80% of U.S. exports of consumer and industrial products to Colombia will become duty free immediately, with remaining tariffs phased out over 10 years. With average tariffs on U.S. industrial exports ranging from 7.4 to 14.6%, this will substantially increase U.S. exports. Key U.S. exports will gain immediate duty-free access to Colombia, including almost all products in the agriculture and construction equipment, aircraft and parts, auto parts, fertilizers and agro-chemicals, information technology equipment, medical and scientific equipment, and wood sectors.
The FTA would also open Colombia’s $134 billion services market to highly competitive American companies, supporting jobs for American workers in sectors ranging from delivery and telecommunications services to education and health care services.
Don’t wait until the FTA is implemented to start exporting to Colombia! The United States is already Colombia’s number 1 trading partner while Colombia is the United States' fourth-largest trading partner in Latin America. As a result, Colombia may already be a good market for you now. If you are interested in expanding into Colombia, please review our Doing Business reports and contact us to discuss how we can help you sell more to Colombia. If there are sufficient market opportunities, your goal should be to lay the groundwork now, by securing a representative, agent, or distributor in anticipation of implementation of the FTA.
For additional information on the benefits for the manufacturing and service sectors, you may visit: