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U.S. Announces Completion of Free-Trade Agreement with Colombia

U.S. Trade Representative Rob Portman (© AP/WWP)

By Bruce Odessey
Washington File Staff Writer

Washington -- The United States has reached a free-trade agreement (FTA) with Colombia, the second one with an Andean country, the Office of the U.S. Trade Representative (USTR) has announced.

In a February 27 press release, U.S. Trade Representative Rob Portman said the FTA would create export opportunities for both sides.

"The agreement will help foster economic development in Colombia and contribute to efforts to counter narco-terrorism, which threatens democracy and regional stability," Portman said.

Two-way trade between the two countries amounted to $14.3 billion in 2005.  Colombia is already the second-largest Latin American market for U.S. agricultural goods.

Deputy U.S. Trade Representative Susan Schwab told reporters in a February 27 teleconference that the FTA would provide U.S. exporters duty-free treatment in Colombia for all goods over time, protections for investors and intellectual property owners, expanded market access for services, and strong protections for workers' rights and the environment.

Under the Andean Trade Preferences Act (ATPA) nearly all imports from Colombia and other Andean countries already receive duty-free treatment in the U.S. market.  With the ATPA scheduled to expire later in 2006, however, an FTA would continue such treatment for Colombia.

Only sugar from Colombia would still face limits in the U.S. market under the FTA.  Under a tariff-rate quota (TRQ), Colombia could export 50,000 metric tons of sugar at a relatively low tariff, the level increasing 1.5 percent a year, Schwab said.  Any exports beyond the TRQ would face prohibitively high tariffs.

Colombian tariffs on all U.S. agricultural exports would be phased out over time, many over 15 years but over 19 years for rice, their most sensitive product, according to Schwab.

Colombia would provide immediate duty-free treatment for other U.S. agricultural goods including high-quality beef, cotton, wheat, soybeans, soybean meal, and key fruits and vegetables, she said.

In December 2005, the United States concluded negotiations for an FTA with Peru. (See related article.)

Schwab predicted the United States and Peru would sign that agreement in April and Congress could consider whether to approve it in the second half of 2006.

She said Congress could consider the Colombia FTA two months or so after the Peru FTA.  She said lagging FTA negotiations with Ecuador are scheduled to resume in March.

FTA negotiations with the three countries for an Andean Free Trade Agreement began in May 2004, with Bolivia at one time participating as an observer.  Schwab indicated that successive FTAs with Peru, Colombia and Ecuador would amount to the same thing.

Portman has testified to Congress that the administration is seeking to conclude several FTAs before the president's trade negotiating authority, called trade promotion authority (TPA) or fast track, expires in July 2007.  Under TPA, Congress restricts itself to approving or rejecting a negotiated trade agreement, within strict time limits and without amendments.

Negotiations are scheduled to start soon with South Korea and are under way with Ecuador, Panama, Thailand, the United Arab Emirates and the five countries of the Southern African Customs Union.  Portman has indicated the United States is interested in negotiating an FTA with Malaysia as well. (See related article.)

The USTR press release and a fact sheet summarizing the agreement are available on the agency’s Web site.

For additional information on U.S. policy, see Trade and Economics and Andean Region.