Colombia Trade Promotion Agreement
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The United States-Colombia Trade Promotion Agreement, in Colombia called Tratado de Libre Comercio (TLC) entre Colombia y Estados Unidos, is an international treaty that, once implemented, will regulate the trade and investment relationship between the parties in a comprehensive manner, with the aim of increasing trade and investment flows and contributing to the economic and social development of the signatory countries.
In May 2004, the United States initiated free trade agreement negotiations with Colombia, Peru, and Ecuador. The United States concluded negotiations with Colombia in February 2006 and the CTPA was signed on November 22 of 2006. After, based on "the New Trade Policy Template", a bipartisan agreement, both countries negotiated a Protocol of Amendment that was signed on June 28 of 2007.
Colombia’s Congress approved the CTPA and the Protocol of Amendment in 2007. Currently,the Agreement is undergoing a constitutionally mandated court review. The United States is seeking congressional approval of the CTPA in 2008.
Beyond market access and rules in trade in goods and, services , and investment, and government procurement, the agreement establishes disciplines in areas such as intellectual property, customs administration, competition, labor, environment investment, services, sanitary and phytosanitary measures, technical barriers to trade, trade remedies and dispute settlement procedures.
[edit] Congressional approval
[edit] Process in Colombia
The U.S.-Colombia Trade Promotion Agreement (CTPA), signed on November 22 of 2006, was submmited to the Colombian Congress by President Alvaro Uribe on November 30 of 2006. The Bill was debated and voted in a joint session on April 25 of 2006. The House Floor approved it on June 5 of 2007 (Yeas 85 Nays 10) and the Senate Floor vote on June 14 of 2007 (Yeas 55 Nays 3). Finally, the CTPA became public law - Ley 143 - on July 4 of 2007.
The Protocol of Amendment, signed on June 28 of 2007, was submitted to the Colombian Congress by President Alvaro Uribe on July 20 of 2007. The Bill was approved in a joint session on August 29 of 2007 and voted by the House Floor on September 25 of 2007 (Yeas 84 - Nays 3). After, the Senate Floor approved the Bill on October 30 of 2007 (Yeas 54 - Nays 16). Finally, the CTPA became public Law - Ley 1116- on November 21 of 2007.
The Agreement is undergoing a constitutionally mandated court review, according to Colombian regulations.
[edit] Process in the U.S.
President Bush sent legislation to implement the U.S.-Colombia Trade Promotion Agreement to Congress for its approval on April 7 of 2007.
The House of Representatives approved on April 10 of 2007, by a vote of 224 to 195, a resolution removing the requirement that legislation to implement the U.S.-Colombia Trade Promotion Agreement be acted upon by the House within a specified period of time. The vote allows House Democratic leaders to indefinitely postpone a vote on the CTPA Bill.[1]
[edit] The Importance of the U.S. - Colombia Trade Promotion Agreement (CTPA)
Video talking about the reasons for a FTA with Colombia - Under Secretary of Commerce, Mr. Chris. Padilla)[2]
Colombia is a proven partner of the United States in the Western Hemisphere because of its trade and investment potential; its democratic, free market values; and its unwavering fight against illegal drugs and terrorism.
The U.S.-Colombia Trade Promotion Agreement will significantly enhance both Colombia's and the United States' strategic agenda of economic progress, stability, and security in the Andean region.
The U.S.-Colombia Trade Promotion Agreement will significantly expand trade and employment in both markets, as Colombia is a commercially significant market and a complementary economy to the United States. It will transform a preferential trade relationship under ATPA into a reciprocal, permanent and comprehensive one.
The U.S.-Colombia Trade Promotion Agreement will drive new investment opportunities for U.S. companies in both countries behind a more certain and predictable environment, enhancing their competitiveness and ability to keep jobs in the region.
Political security and economic security are related and mutually reinforcing. The U.S.-Colombia Trade Promotion Agreement will strengthen bilateral ties and enhance Colombia's long-term economic and political security, a key strategic priority for the United States in the region.
The U.S.-Colombia Trade Promotion Agreement will strengthen positive labor and environmental policies in Colombia and improve enforcement through more accountability and resources. It will further advance labor rights and the protection of environment with the development of new export-oriented industries, like Colombia's flower industry.
Colombia concluded negotiations on a comprehensive trade agreement with the United States, including all relevant issues and economic sectors. The U.S.-Colombia Trade Promotion Agreement will further enhance U.S. efforts to advance regional and multilateral trade negotiations.
[edit] Realizing New Trade Potential in Both the U.S. and Colombia
The U.S.-Colombia Trade Promotion Agreement will significantly expand trade and employment in both markets, as Colombia is a commercially significant market and a complementary economy to the United States. It will transform a preferential trade relationship under ATPA/ATPDEA into a reciprocal, permanent and comprehensive one.
Building on ATPA/ATPDEA: Despite being a one-way preference program, ATPA has had a positive impact on two-way trade between Colombia and the United States Both U.S. imports and exports to/from Colombia grew by an average 8 percent per year between 1991 and 2007, creating thousands of jobs in both countries. Also, Colombia has been the largest market for U.S. exports at $ 8.6 billion representing 54 percent of U.S. exports to ATPA countries (Colombia, Bolivia, Peru and Ecuador) in 2007.
Significant trade: The United States is Colombia's largest trading partner both in exports and imports, as it accounted for 30 percent of Colombia's global trade in 2007. Colombia is the United States' third largest trading partner in the Western Hemisphere outside NAFTA. America’s two-way trade with Colombia reached $18 billion in 2007.
Complementary trade: Colombia - U.S. trade is highly complementary, reflecting different levels of development and different agricultural zones.
U.S. exports to Colombia are concentrated in high value-added manufacturing goods such as chemical products, computer and electronic products, machinery and equipment, while U.S. imports from Colombia are concentrated in oil and mining products, tropical agricultural commodities, and lower value added manufacturing products (apparel, plastics, metal and cement products).
Bilateral agricultural trade is also highly complementary due to the temperate vs. tropical zone agriculture of our two countries. The U.S. sells mainly grains (corn, wheat, soybeans) and cotton to Colombia, which in turn supplies the U.S. with tropical products like coffee, flowers, bananas and fruits. This has contributed to making Colombia the United States' 10th largest trading partner worldwide in agriculture and livestock products.
Large market with significant import potential: Colombia has the third largest population (47 million in 2007) and the fifth largest GDP ($171 billion in 2007) in Latin America. Colombia is U.S largest export market for agriculture products in South America. Although Colombia's economy is around 30% larger than Chile or the five CAFTA countries combined, its imports from the U.S. are less than half as large as U.S. imports by CAFTA countries. This is related to the fact that the average Colombian tariff on U.S. goods is 9.3%, with only 11% of U.S. imports by volume currently entering Colombia duty free. In addition, More than 9,000 U.S. companies already are exporting to Colombia, of which 8,000 are small and medium-sized firms.
Important supplier to U.S. companies and consumers: American consumers and companies already benefit significantly from Colombian exports. Already 92% of U.S. imported goods by volume from Colombia enter the U.S. market duty free, with Colombia being the United States' largest supplier of cut flowers and coffee, and the fourth largest in bananas. The Colombia’s flowers support a $2 billion U.S. florist industry and over 220,000 U.S. jobs.
[edit] Realizing New Investment Potential
A U.S.-Colombia Trade Promotion Agreement (CTPA) will drive new investment opportunities for U.S. companies in both countries behind a more certain and predictable environment, enhancing their competitiveness and ability to keep jobs in the region.
Foreign investment: The U.S. is the largest foreign investor in Colombia, with an estimated $6.1 billion in direct investment stock in 2007. This represents 31 percent of Colombia's global foreign direct investment. Colombia is home to more than 220 U.S. based firms, many of which have operated successfully in the country for decades.
Improved certainty and investment protection: As Colombia's largest foreign investor, the U.S. is positioned to best take advantage of the more stable and predictable investment environment under the CTPA. Not only will U.S. companies benefit from increased and permanent market access in both countries, but they will also gain from improved rules in investment and intellectual property.
An export platform: Key foreign investment sectors in Colombia are in manufacturing, financial services and mining products. Colombia's web of current and upcoming free trade agreements with Chile, Mexico, the Andean nations and MERCOSUR, and its preferential access to the European market make it a strong potential export platform for U.S. companies.
Opportunities for U.S. inputs and jobs: As increased investment transforms Colombia into an export platform, this will drive exports of U.S. inputs and increase U.S. jobs
Energy: Colombia is a significant and reliable source of energy for the United States. As a primary investor in Colombia's coal and oil sectors, the U.S. has enabled Colombia to become the largest U.S. foreign supplier of coal and its eighth largest supplier of oil and oil related products. The CTPA will provide incentives for new U.S. investments in Colombia's mining and energy sectors, including an estimated 47 billion barrels of oil yet to be developed.
Long-term growth: For Colombia, the increased investment stemming from a trade agreement with the U.S. will help drive long term GDP growth rates above the current level of 5-7 percent. This, in turn, will accelerate the reduction of the national unemployment rate, which is still around 10 percent.
[edit] What's New...
May 20, 2008 McCain: Colombia FTA Benefits U.S.
May 8, 2008 - Businessweek "Cheap Shots Over Free Trade"
May 7, 2008 - U.S. Senate "U.S. - Colombia Trade Agreement Good for American Jobs"
May 6, 2008 - Bloomberg "Canada Pushes Colombia Trade Agreement, as U.S. Deal Languishes"
[edit] CTPA impact on U.S. economy and State By State benefits
[edit] U.S. International Trade Commmission's report about the potential economy-wide and selected sectoral effects
"Colombian exporters generally face substantially lower tariffs in the U.S. market than do U.S. exporters in the Colombian market because most U.S. imports from Colombia enter free of duty either unconditionally or under other duty-free provisions. Because of this tariff asymmetry, the primary effects of the TPA will be improved U.S. access to the Colombian market and an increase in U.S. exports to Colombia. Nevertheless, the overall effect of the U.S.-Colombia TPA on the U.S. economy is likely to be small because of the small size of the Colombian market relative to total U.S. trade and production."
See the report at
USITC "U.S.-Colombia TPA: Potential Economy - Wide and Selected Sectoral Effects"
[edit] State by state benefits
[edit] On Agricultural goods
Alabama Alaska Arizona Arkansas California Colorado Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maryland Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New England New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania South Carolina South Dakota Tennessee Texas Utah Virginia Washington West Virginia Wisconsin Wyoming [3]
[edit] On Industrial goods
Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming [4]
[edit] Support The U.S. - Colombia Trade Promotion Agreement
Colombia: A Golden Opportunity
Colombia: A Case Of Continuous Progress
Protection of Labor Rights in Colombia [6]
USTR "Numbers You Need to Know" [7]
[edit] Colombia's Other Agreements and Preferences
World Trade Organization - WTO
Andean Countries and Mercosur Agreement
Colombia – Central American Countries (El Salvador, Guatemala and Honduras)
COLOMBIA'S ONGOING NEGOTIATIONS
[edit] See also
[edit] External links
- U.S. International Trade Commission Press Release
- Congressional Research Service Report on Andean Free Trade Agreement, including Peru TPA
- Colombia-United States Free Trade Agreement at Discourse DB
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