Today our free trade agreement with Colombia, passed by Congress last October, goes into effect. This agreement allows manufacturers to begin reaping the benefits of the Colombian market. The implementation of this agreement presents a major opportunity for manufacturers in the U.S. to expand their exports to Colombia, whose products mostly enter the U.S. duty-free already.
With a population of 46 million, Colombia represents a significant market for U.S. exports – the third largest in Latin America. Furthermore, Colombia’s GDP is $467 billion with expected growth of 4.7 percent this year. Until now the average tariff on U.S. products entering the Colombian market has been 15 percent, adding substantial cost to the purchase of U.S. goods in Colombia and therefore putting American goods at a severe disadvantage. With this FTA in force, U.S. competitiveness will be enhanced and our exports to Colombia will expand as a result of our new market access there.
Colombian duties on 80 percent of U.S. manufactured products will immediately be dropped to zero, with the remaining tariffs phased out over the next ten years. This means expected growth for manufacturers in the U.S. in the following key sectors: oil and gas machinery and services, plastics, construction and mining equipment, telecommunications equipment and services, information technology, safety and security, automotive parts and accessories, electrical power systems, building materials, food and beverage processing and packaging equipment, and medical and pollution control equipment.
We’re pleased that we now have a level playing field with Colombia but we can’t afford to just stop here. There are currently dozens of trade agreements being negotiated all over the world and we are party to only one. If we are going to meet the President’s goal of doubling exports then we need to do more. With 95 percent of the world’s consumers living outside of the U.S. we must continue to negotiate new free trade agreements to open new markets for manufacturers.
Jessica Lemos is director of international trade policy, National Association of Manufacturers.