Last month marked the year anniversary of the U.S.-Colombia Free Trade Agreement (FTA). The agreement has allowed both American and Latin American businesses to benefit from the expanded opportunities to ship products duty-free between the two countries. For the first time last year, Colombia cracked the Top 20 most important trade partners for the entire U.S., as well as being the second most important trade partner in South Florida.
Many businesses are capitalizing on the now wide-open Colombian market and the duty-free access to the U.S. market. Which commodities are now top exports under the FTA?
What commodities are top exports from the U.S. to Colombia?
Per the U.S. International Trade Administration (ITA), “U.S. merchandise exports to Colombia totaled $14.3 billion in 2011, up 18% from 2010. Principal U.S. exports to Colombia in 2011 were machinery, mineral fuels, electrical machinery, organic chemicals, and plastic. The best-prospect sectors for non-agricultural goods and services include automotive parts, construction and mining equipment, electrical power systems, food and beverage processing equipment, information technology, medical equipment, transportation and infrastructure, and travel and tourism.”
What commodities are top exports from Colombia to the U.S.
Key exports from Colombia to the U.S. include: sugar, confectionery goods, textiles, tuna and dairy products.
Fast Facts, courtesy of USTR:
- “Colombia’s economy is the third largest in Central and South America.
- The FTA has provided significant new access to Colombia’s $166 billion services market, supporting increased opportunities for U.S. service providers.
- U.S. goods exports to Colombia in 2010 were $12.0 billion. Our economies are largely complementary in terms of the goods we ship each other. For example, Colombia is a large importer of grains from the United States while it exports a number of tropical fruits to our country. In addition, U.S. cotton, yarn and fabric exports to Colombia are used in many apparel items that Colombia exports to the United States.”
The FTA will remove significant barriers to U.S. goods from entering Colombia’s market:
- “Over 80 percent of U.S. exports of consumer and industrial products to Colombia have 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 percent, this will continue to increase U.S. exports.
- Key U.S. exports gained immediate duty-free access to Colombia, including almost all products in these sectors: agriculture and construction equipment, aircraft and parts, auto parts, fertilizers and agro-chemicals, information technology equipment, medical and scientific equipment, and wood.
- Many agricultural commodities also have benefited from the Agreement, as more than half of current U.S. farm exports to Colombia will become duty-free immediately, and virtually all remaining tariffs will be eliminated within 15 years. Colombia will immediately eliminate duties on wheat, barley, soybeans, soybean meal and flour, high-quality beef, bacon, almost all fruit and vegetable products, wheat, peanuts, whey, cotton, and the vast majority of processed products. The Agreement also provides duty free tariff rate quotas (TRQ) on standard beef, chicken leg quarters, dairy products, corn, sorghum, animal feeds, rice, and soybean oil.”
For anyone capitalizing on the import/export opportunities contained within the FTA, it is vital to remain in strict compliance. For more information on trade compliance in relation to this agreement, please see the following ITA guidelines.