Sunday, May 20, 2012

US Colombia Free Trade Agreement

US -- Colombia Trade Promotion Agreement. 

U.S. and Colombia have finally implemented the free trade agreement signed more than five years ago under Bush administration. Colombia is one of the strongest US all in the region but has a poor track record of dealing with trade unions. This was the primary reason which caused the delay. Its relationships with trade unions haven’t improved but the White House administration have pushed the lawmakers towards implementation of the agreement.

Under the free trade agreement, both countries can trade goods freely, without any kind of import duties or taxes. US exports can potentially increase to $1.1bn while Colombian exports to US can reach up to approximately $490mn.
Amazon Ad


Critics have voiced their concerns against the free trade agreements from both sides.

From U.S: Democratic members from Congress have argued that Colombia hasn't stopped its violent practices against trade union leaders and its members therefore labor is still exploited in the country. The agreement should not be implemented until Colombia can prove to the United States that it has taken all necessary steps to stop violence against trade unions.

From Colombia: Some Colombian trade unions have opposed the agreement saying that the country does not produce enough goods, therefore the deal will only benefit the US. If all import tariffs are removed then the demand for US goods will increase, which is bad news for Columbian industry.

Amazon Ad

Advantage U.S. 

[Source: Office of the U.S. Trade Representative (USTR)]

  1.  The free trade agreement can boost U.S. exports to Colombia by $1.1bn, create hundreds of jobs in this sector and will eventually increase the GDP by $2.5bn.
  2.  The U.S service industry will have access to the $116bn Colombian service market.
  3. Key US exports such as construction equipment, aircraft and parts, autoparts, I.T. equipment etc, will get immediate duty free access to Colombian markets.
  4.  Other remaining tariffs will be phased out over a period of 10 years.
  5. Some of the U.S. goods such as consumer goods, building products, transportation equipment, paper products, had to pay tariffs between 12.5% and 14.6%. Elimination of import duties will substantially reduce the prices of these goods which will increase their demand in Colombia significantly.

Your comments and feedback are always appreciated.
Sarfaraz A.K.
Half-Bridge (Return to main page)