U.S. and Colombia Conclude Free Trade Agreement

In May 2004, the U.S. initiated FTA negotiations with three Andean nations (Colombia, Peru, and Ecuador). The U.S. concluded negotiations with Peru in December 2005. Negotiations with Ecuador are continuing. Bolivia has participated as an observer and could become part of the agreement at a later stage. (See ITT's Online Archives or 01/11/06 news, 06011105, for BP summary on the President's announcement that he intends to sign a FTA with Peru.)

Over 80% of U.S. exports of consumer and industrial products to become duty-free immediately. The USTR states that over 80% of U.S. exports of consumer and industrial products to Colombia will become duty-free immediately upon entry into force of the agreement, and an additional 7% will be duty free within five years. All remaining tariffs will be eliminated within ten years. Many products in key U.S. export sectors, such as agriculture and construction equipment, aircraft and parts, auto parts, fertilizers and agro-chemicals, information technology equipment, medical and scientific equipment, and wood will gain immediate duty-free access to Colombia.

Colombia has agreed to allow trade in remanufactured goods under the agreement, which will provide significant export and investment opportunities for U.S. firms involved in remanufactured products such as machinery, computers, cellular telephones, and other devices. Colombia will also join the World Trade Organization's Information Technology Agreement (ITA), which will remove tariff and non-tariff barriers to information technology products.

U.S. export of certain farm products and processed products to receive immediate duty-free treatment. According to the USTR, U.S. farm exports to Colombia that will receive immediate duty-free treatment include high-quality beef, cotton, wheat, soybeans, soybean meal; apples, pears, peaches, and cherries; and many processed food products, including frozen french fries and cookies. U.S. farm products that will benefit from improved market access include pork, beef, corn, poultry, rice, fruits and vegetables, processed products, and dairy products.

The U.S. and Colombia have worked to resolve sanitary and phytosanitary barriers to agricultural trade, including food safety inspection procedures for beef, pork, and poultry.

Duty and quota-free treatment for qualifying textiles and apparel. The USTR states that textiles and apparel will be duty-free and quota-free immediately if the products meet the agreement's rule of origin.

Verification of claims of origin or preferential treatment for textiles and apparel. The USTR states that Customs cooperation commitments between U.S. and Colombia will allow for verification of claims of origin or preferential treatment, and denial of preferential treatment or entry if claims cannot be verified.

Yarn forward standard; short supply determinations. The USTR states that the rules of origin are generally based on the yarn forward standard. Exceptions to the rules of origin will be handled through an expedited "short supply" determination process after entry into force, or through a similar process under the Andean Trade Preference Act (ATPA) before entry into force. The U.S. and Colombia agreed on 20 "short supply" items as part of the agreement. The agreement does not make use of tariff preference levels (TPLs).

Apparel de minimis provision; textile safeguard. A "de minimis" provision will allow limited amounts of specified third-country content to go into U.S. and Colombian apparel. A special textile safeguard will provide for temporary tariff relief, if imports under the agreement prove to be damaging to domestic producers.

Intellectual property rights. The agreement provides for improved standards for the protection and enforcement of a broad range of intellectual property rights, which are consistent with both U.S. standards of protection and enforcement, and with emerging international standards. Such improvements include protections for digital products such as U.S. software, music, text, and videos; protection for U.S. patents, trademarks and test data, including an electronic system for registration and maintenance of trademarks; and further deterrence of piracy and counterfeiting by criminalizing end-use piracy.

Customs procedures, combating illegal transshipment. The USTR states that comprehensive rules of origin will ensure that only U.S. and Colombian goods benefit from the agreement.

The parties agree to share information to combat illegal transshipment of goods. In addition, the agreement contains specific commitments to expedite the release of goods, special procedures for the release of express delivery shipments, and the ability of importers to obtain binding advance rulings governing eligibility for preferential tariff treatment, tariff classification, eligibility for duty drawback, country of origin marking and the application of quotas.

USTR press release (dated 02/27/06) available at http://www.ustr.gov/Document_Library/Press_Releases/2006/February/United_States_Colombia_Conclude_Free_Trade_Agreement.html.

USTR fact sheet (dated 02/27/06) available at http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2006/asset_upload_file485_9023.pdf.

USTR summary of FTA (dated 02/27/06) available at http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2006/asset_upload_file908_9024.pdf.