The FTA is not about winners and losers. This Agreement gives adequate periods of relief for businesses so that they may take the necessary actions to increase their competitiveness.
Colombian products with 0% tariff
- 99% of Colombian qualifying industrial and textile goods will become duty free upon the implementation of the FTA.
- 89% of Colombian agricultural goods will become duty free upon implementation of the FTA.
- Duties on many other tariff lines will be phased out over a period of up to 15 years, with some agricultural tariff rate quotas. While Colombia is expected to fill its new sugar TRQ, the FTA is likely to have a minor effect on U.S. imports and production of sugar and sugar containing products.
Key facts
The Colombia- U.S. FTA promotes trade in goods by eliminating tariff barriers, and by promoting the harmonization of technical regulations between both parties. As a result, FTA supports economic growth in both countries.
The FTA supports American jobs and improves American competitiveness since many American businesses use imports under this program as inputs to manufacture goods in the United States.
It is expected that the agreement will be effective in the second half of 2012, once Colombia accomplish all the agreement laws, regulations and policies. USTR is helping to accomplish these requirements as quickly as possible.
Colombia’s government is ensuring labor laws by promoting more protection rights for workers, to please and accomplish the strategic goals of the bilateral Labor Action Plan.
The USTR General Counsel, Tim Reif said that the FTA with Colombia is “well on the road” and is likely to be the next FTA to see implementation -GBD event on the pending FTAs.
United States Trade Representative Ron Kirk said “USTR has already started the work necessary to bring these agreements into force as soon as possible”- September 2011.
Colombia asked assistance in its labor to upgrade its workers rights from both the International Labor Organization and U.S. government. Mr. Kirk said:“It feels like they are absolutely meeting both the letter and spirit of what we asked them to do”.
Colombian products with 0% tariff
ATPDEA
The approval of the FTA extends the Andean Trade Promotion and Drug Eradication Act, ATPDEA, which was renewed until July 2013. The tariff preferences that many Colombian products have had shall be maintained with the FTA and therefore, sectors such as flowers, apparel, tobacco, cocoa, plastics and leather manufacturing, among others, shall be benefited.
In fact, both the ATPDEA preferences as well as the others that were agreed upon, shall be maintained over time, given that their persistence shall not be subject to unilateral U.S. Government and Congress decisions.
Agreements texts
The FTA is an agreement that generates opportunities for all Colombians, as it contributes to the creation of quality jobs and the improvement of the national economy’s performance. It benefits the exports sector, which will be able to sell its products and services under favorable conditions in the U.S. market.
The subjects that were negotiated were market access, in its two aspects (industrial and agricultural), intellectual property, investment regime, Government acquisitions, conflict resolution, competency, e-trade, services, environment and labor, among others.
The text of the agreement is embodied in one preamble and 23 chapters. The chapters cover aspects that reflect the general agreed-upon disciplines, many of which are common in multilateral and bilateral negotiations, and incorporate particular elements obtained by Colombia as well as by the United States in the negotiation.
For more details on the agreement, visit the Ministry of Trade, Industry and Tourism website at: http://www.tlc.gov.co/
FAQs about TLC
Colombia has been working to strengthen the export of services and several of these sectors are in the Productive Transformation Program (PTP). The FTA will eliminate barriers that distort trade and impose discriminatory treatment, as well as tariffs for digital products, among which includes software, video, and image and sound recordings, among other items.
Engineering, architecture, accounting, and other similar services will benefit with the FTA since these branches received concessions. One of the major gains in this chapter is that it is not mandatory to establish "local presence" in the territory of the other country in order to
provide a service. Thus, telemedicine, call centers, accounting services, and data processing services, among others, will greatly benefit.
Given the close relationship between the outflow of Colombians to the U.S., as well as the growth of bilateral trade in goods and services, the most representative states for trade in professional services are New York, New Jersey, California, Texas, Florida, and the District of Columbia. It was precisely this identification of states which prompted the establishment of specific commitments to facilitate the provision of professional services
Mutual recognition of degrees is an issue that complements trade and has been strengthened through other agreements. However, in the FTA it was established that the two countries will pursue this theme with their respective authorities and develop standards for the licensing and certification of professional service providers. Through a letter accompanying the Chapter on Services, the U.S. committed to review the state-level measures requiring permanent residency or citizenship for professional engineering, accounting, architecture, legal, nursing, dentistry, general medicine, and paramedic services.
The FTA has included the creation of a working group on professional services, which provides a permanent framework for the professional bodies of the two countries to perform the relevant work on mutual recognition and standards for licensing Although the FTA has identified engineering and architecture as priorities, others, such as health services and consultancy, can use this framework in the future as a means to promote agreements on these matters.
Colombian service providers may do so in four ways. The first is by "cross-border supply," which is where the service moves. In this case, neither the consumer nor the provider must move to the other territory. Is includes such things as conducting consultancy, receiving calls to an attention or call center, and providing advice via telemedicine. The second method is known as "consumption abroad," which occurs when the consumer moves to another country to receive the service. This includes such things as tourism. The third method is known as "commercial presence," which is when capital moves, such as through a subsidiary of a company. This is related to foreign direct investment and is covered in the Investment Chapter. Finally, the fourth method is known as "presence of natural persons," in which the service provider moves, temporarily, to another country to provide the service. This includes such things as training or repair services.
For the full implementation of the FTA, there will be two phases to facilitate air travel between Colombia and the United States. The first phase will be up in 2012, during which time each party will increase to 21 frequencies on routes already in operation. The second phase will be to approve new routes without limitations. As noted above, from January 1,
2013, the open skies agreement shall enter into force. Currently, Colombia and the United States share more than 200 weekly scheduled flights, which represents 37% of Colombia’s international air market.
Absolutely! Under the agreement, there will be an extension of competition through the establishment of banks and insurance companies, via branches that are built with capital in the country. Additionally, in the insurance sector, cross-border trade is allowed, with the exception of compulsory insurance, that which is related to social security and that which is to be taken by public entities. Another highlight is the preservation of the Government’s discretion to control capital flows for the purpose of macroeconomic stability. Similarly, the power for policymakers to design and regulate the social security system was retained.
This is a very functional system that will allow online control of the entry of products so that once a quota is complete the respective tariff will apply. Using this tool will help to prevent injury to domestic industry.