Colombia, Balancing the Scales

By April 10, 2008Trade

The House Committee on Ways & Means’ report on H.R. 5264, the Andean Trade Preference Act, provides a good, brief history of the original ATPA (P.L. 102-182) passed in 1991, a law which granted preferential trade benefits to Bolivia, Colombia, Ecuador and Peru in the form of duty-free treatment of eligible products coming into the United States. The program was expanded by the Andean Trade Promotion and Drug Eradication Act (P. L. 107-210) on August 6, 2002 — giving another 700 products access to the U.S market.

Congress approved the latest extension of trade preferences, reaffirming Colombia’s ability to send its products to the United States without U.S. tariffs, by a voice vote in the House (February 27th) and unanimous consent in the Senate (February 28th).

So those who would delay a vote on the U.S-Colombia Free Trade Act are arguing, in essence, that it’s politically non-controversial to open even wider the U.S. market to Colombia’s exports, but a disaster to lower Colombia’s barriers to U.S. exports. Strains credulity, that argument.

From the additional (Republican) views section of the Ways & Means report:

[When] the United States went from providing one-way access to imports from Central American countries to a bilateral FTA in the CAFTA, our $1.3 billion trade deficit with those countries has changed to a trade surplus of $3.7 billion.

Congress has the opportunity to replicate that CAFTA success by passing the U.S.-Colombia Trade Promotion Agreement. The Democrat Leadership’s refusal to act so far on this Agreement means that the U.S.-Colombia trade relationship is one-sided to Colombia’s benefit. More than 99 percent of total Colombian exports to the United States are already duty-free (measured by tariff line) because of the preferences. By contrast only 2.7 percent of U.S. exports to Colombia are currently duty-free. More than 89 percent of Colombian agriculture exports to the United States are already duty-free (measured by tariff line) because of the preferences. No U.S. agriculture exports to Colombia receive duty-free treatment today. The average U.S. tariff paid by imports from Colombia in 2006 was only 0.1 percent because of the preferential access to the U.S. market. In contrast, the average tariff paid by U.S. exports to Colombia was 11.2 percent. The U.S.-Colombia Trade Promotion Agreement will reduce the average tariff faced by U.S. exporters by more than 68 percent, from an 11.2 percent average duty to 3.6 percent immediately upon implementation of the Agreement.

Our emphasis. As if we needed to emphasize the facts. It’s widely understood on Capitol Hill that the economic benefits of the U.S.-Colombia Free Trade Agreement will accrue to U.S. businesses and employees. It’s the political benefits that appear to be at debate.

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