(April 13, 2011) The United States has reached an agreement with Colombia on labor and judicial reforms that will open the door for U.S. congressional approval of the long-pending U.S.-Colombia Free Trade Agreement (FTA).
The Obama administration has worked closely with the government of Colombia and interested stakeholders, including members of Congress, to address labor concerns resulting in an agreed Action Plan Related to Labor Rights that will lead to greatly enhanced labor rights in Colombia.
Successful implementation of key elements of the action plan will be a precondition for the U.S.-Colombia agreement to enter into effect.
The U.S.-Colombia Trade Agreement will expand U.S. goods exports alone by more than $1.1 billion and give key U.S. goods and services duty-free access in sectors from manufacturing to agriculture. It will increase U.S. gross domestic product by $2.5 billion and support thousands of additional U.S. jobs.
Expanding Export Market
Colombia is an emerging economy that is providing California with a quickly expanding export market and opportunity for future collaboration. Since 2006, exports to Colombia have more than doubled.
In 2010, California exports to Colombia totaled just over $409 million. Colombia became California’s 34th largest export market, progressing from its 2009 place as the 35th largest market. This growth is indicative of the potential of California-Colombia trade.
California’s strongest to-Colombia exporting sector is computers and electronic products. With exports in this sector topping $146 million, computers and electronic products make up 35.8 percent of total California exports to Colombia. This is a 51.5 percent increase over exports from 2009.
In 2010, fabricated metal products exports dramatically expanded, growing from less than $4 million to almost $11 million. Chemical manufactures and machinery manufactures also showed strong improvement, as the second and third strongest export groups, respectively.
In November 2006, the United States and Colombia signed an FTA. Colombia’s Congress approved the agreement in 2007.
According to the U.S. Department of Commerce, International Trade Administration, the U.S.-Colombia FTA offers tremendous opportunities for California exporters.
When the FTA enters into force, 80 percent of U.S. consumer and industrial exports to Colombia will be duty-free immediately, including nearly all information technology products; mining, agriculture and construction equipment; medical and scientific equipment; auto parts; paper products; and chemicals. The remaining tariffs phase out over 10 years.
U.S. farmers and ranchers will also become much more competitive, benefiting from immediate duty-free treatment of 77 percent of current U.S. agriculture exports. Key U.S. agriculture exports—such as cotton, wheat, soybeans, high-quality beef, apples, pears, peaches, cherries and almonds—will be duty-free when the agreement enters into force. Colombia will phase out all other agricultural tariffs within 19 years.
The California Chamber of Commerce, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business.
New multilateral, sectoral and regional trade agreements ensure that the United States may continue to gain access to world markets, resulting in an improved economy and additional employment of Americans.
For further information, see www.calchamber.com/Colombia.
Staff contact: Susanne Stirling