U.S.-Colombia Free Trade Agreement Goes Into Effect May 15
A free-trade agreement between the United States and Colombia will go into effect on Tuesday, May 15. The U.S.-Colombia Trade Promotion Agreement (CTPA) will remove duties and tariffs on many of the goods exchanged between Colombia and the U.S., the Latin American country's largest trading partner.
The CTPA arrangement was part of a series of free-trade negotiations passed by Congress and signed by President Obama in October 2011. The deals with South Korea, Colombia and Panama were part of a program to double U.S. exports by 2015.
Colombia's agreement is will be the second one implemented after the historic measures were passed, the largest since the North American Free Trade Agreement (NAFTA) in 1993. The Republic of Korea-United States Free Trade Agreement (KORUS FTA) went into effect on March 15, while the Panama-United States Trade Promotion Agreement has yet to be implemented.
Duties on 80 percent of U.S. exports will be eliminated with tomorrow's implementation, with another 7 percent of exports becoming duty-free by 2017 and tariffs on the remainder eliminated by 2022. Meat and vegetables make up a majority of U.S. exports to Colombia, although cotton, textiles and technology products are also included.
According to the U.S. International Trade Commission (USITC), tariffs on apparel exports to Colombia ranged from 5 to 20 percent. USITC estimates that exports of U.S. goods will increase by more than $1.1 billion as a result of CTPA, with U.S. gross domestic product increasing by $2.5 billion. Consequently, many apparel manufacturers expect CTPA will result in increased textile exports to Colombia, the third-largest economy in Central and South America.
U.S. House of Representatives Speaker John Boehner called the agreement "an important moment for the prosperity" of both countries, noting that it is vital for America to maintain positive relationships with countries in Central and South America. Iranian President Mahmoud Ahmadinejad's visited several South American countries earlier this year, including Venezuela, Nicaragua and Ecuador, which Boehner said was an attempt by Iran to expand its influence in Latin America.
"The best defense against an expansion of Iranian influence in Latin America—and against the destructive aspirations of international criminals in the region—is for the United States to double down on a policy of direct engagement," Boehner said.
Related story: U.S. Free Trade Deals Passed, Textile Prices May Be Affected
Kyle A. Richardson is the editorial director of Promo Marketing. He joined the company in 2006 brings more than a decade of publishing, marketing and media experience to the magazine. If you see him, buy him a drink.