A controversial free trade agreement with Colombia took effect last week after several revisions by President Obama since he took office. For Latin America’s fourth-largest economy, the deal will allow producers of everything from cut flowers to textiles to agricultural commodities to ship their products tariff-free to the U.S.
The trade agreement, created under the administration of President George W. Bush, allowed more than 80% of U.S. exports of consumer and industrial products to Colombia to become duty-free immediately, while remaining tariffs will be phased out over 10 years. U.S. exports previously paid tariffs of between 7% and 15%.
PIERS sister company, The Journal of Commerce, recently reported that the free trade agreement with the South American country is expected to boost bilateral trade and tap into the emerging economy.
“This landmark agreement opens the door to new business opportunities, economic growth, and job creation in the U.S. and Colombia,” said Thomas Donohue, President and CEO of the U.S. Chamber of Commerce. “Rather than rest on our laurels, we must continue to push forward with a bold job-creating trade agenda.”
U.S. exports to Colombia have quadrupled in the last 10 years and hit $14 billion last year, according to the Chamber. Bilateral trade reached nearly $30 billion, and the U.S. bought about 38% of all Colombian exports, making it by far Colombia’s largest market.
According to the Wall Street Journal, the first products shipped tariff-free were crates of Colombian roses and other flowers that landed last Tuesday morning at Miami’s airport. Heading the other direction was a Harley-Davidson motorcycle, which previously paid a 15% tariff, that was due to be unloaded at Bogota’s airport, fresh off a factory floor in Kansas, a Colombian trade ministry official said.
The long-negotiated agreement was not without controversy. It had met with strong opposition from U.S. labor organizations for several years, which are worried about jobs being sent abroad and union-busting violence in Colombia. The Obama administration said in April that Colombia took the needed steps to improve labor conditions, the last hurdle to implementation of the agreement.
How do you plan to keep an eye on new trade developments in Colombia? PIERS offers comprehensive coverage of Columbian and other South American countries’ imports and exports for all modes of transportation including waterborne, rail, truck, air and pipeline. For more information on our international data visit www.piers.com/InternationalData and request a FREE sample.