U.S. and Colombia Sign Free Trade Agreement (Congressional Approval Still Required, Etc.)
The Office of the U.S. Trade Representative has issued a press release announcing that on November 22, 2006, the U.S. and Colombia signed the U.S.-Colombia Trade Promotion Agreement (TPA). (International Trade Commission sources have previously stated that the term TPA is essentially interchangeable with the term free trade agreement (FTA).)
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According to the press release, the U.S.-Colombia TPA is a comprehensive agreement that will eliminate tariffs and other barriers to trade in goods and services between the U.S. and Colombia.
Many products from Colombia already enter the U.S. market duty-free under the Andean Trade Preference Act (ATPA)/Andean Trade Promotion and Drug Eradication Act (ATPDEA), which expires on December 31, 2006. USTR states that this new agreement would help Colombia expand its current access and lock in duty-free treatment for Colombian products. (See ITT's Online Archives or 11/20/06 news, 06112810, for recent BP summary of its expiration.)
Next Step in Implementing U.S.-Colombia FTA is Congressional Approval, Etc.
Now that the FTA with Colombia has been signed, the expected next step is for the President to formally submit the U.S.-Colombia FTA implementing legislation package (U.S.-Colombia FTA, implementing legislation, and statement of administrative action) to Congress. Congress would then have 90 legislative days to consider the U.S.-Colombia FTA implementing legislation, which cannot be amended.
It is expected that if U.S.-Colombia FTA implementing legislation is passed by Congress (both the House and Senate), it could then be signed into law by the President, who would subsequently issue a proclamation implementing the U.S.-Colombia FTA.
Highlights of the U.S.-Colombia FTA
According to an earlier summary by the USTR, the following are highlights of the U.S.-Colombia FTA (partial list):
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.
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.
Textiles and apparel will be duty-free and quota-free immediately if the products meet the agreement's rule of origin.
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 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).
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.
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.
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.
(See ITT's Online Archives or 08/29/06 news, 06082905, for BP summary of the President's notification to Congress of his intent to sign the U.S.-Colombia FTA.)
USTR Press Release (dated 11/22/06) available at http://www.ustr.gov/Document_Library/Press_Releases/2006/November/United_States_Colombia_Sign_Trade_Promotion_Agreement.html.