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The United States—Colombia Trade Promotion Agreement (TPA) entered into force on May 15, 2012. The TPA is a comprehensive free trade agreement that provides elimination of tariffs and removes barriers to U.S. services, including financial services. It also includes important disciplines relating to customs administration and trade facilitation, technical barriers to trade, government procurement, investment, telecommunications, electronics commerce, intellectual property rights, and labor and environmental protection. The International Trade Commission (ITC) has estimated that when fully implemented the tariff reductions in the TPA will expand exports of U.S. goods alone by more than $1.1 billion, supporting thousands of additional American jobs. The ITC also projected that when fully implanted the TPA will increase U.S. GDP by $2.5 billion.
Highlights of the U.S.-Colombia TPA
New Opportunities for U.S. Workers, Manufacturers, Farmers, and Ranchers: Over 80 percent of U.S. exports of consumer and industrial products to Colombia became duty-free upon entry-into-force, with remaining tariffs phased out over ten years. U.S. products that gained immediate duty-free access includes agricultural and construction equipment, aircraft and parts, auto parts, fertilizers and agro-chemicals, information technology equipment, medical and scientific equipment, and wood. More than half of U.S. agricultural exports became duty-free upon entry-into-force, with most remaining tariffs phased out over 15 years. Colombia eliminated duties on wheat, barley, soybeans, soybean meal and flour, high-quality beef, bacon, almost all fruit and vegetable products, peanuts, whey, cotton, and the vast majority of processed products. The TPA also provides duty-free access for specified volumes of standard grade beef cuts, chicken leg quarters, pork, corn, sorghum, animal feeds, rice, soybean oil, and dairy products through tariff rate quotas. Learn more here.
A Level Playing Field for U.S. Investors and U.S. Services Providers: The TPA ensures that U.S. companies in Colombia are protected against discriminatory or unlawful treatment, and provides a neutral and transparent mechanism for settlement of investment disputes. Colombia also agreed to eliminate a range of services barriers, including in the supply of cable television services, professional services, and portfolio management services. Learn more here.
Commitments to Protect Labor Rights: The TPA commits both Parties to adopt and maintain in their laws and practice the five fundamental labor rights as stated in the 1998 ILO Declaration on Fundamental Principles and Rights to Work. Both Parties are also required to effectively enforce – and may not waive – labor laws related to fundamental labor rights. All obligations in the labor chapter are subject to the same dispute settlement procedures and enforcement mechanisms as the TPA’s commercial obligations. In addition, in April 2011, the U.S. and Colombian governments also agreed on concrete steps under the Colombian Action Plan Related to Labor Rights to address long-standing issues of mutual concerns including violence against Colombian labor union members and inadequate efforts to bring the perpetrators of such violence to justice, and insufficient protection of workers’ rights. Since then, Colombia has made meaningful progress to implement the Plan, including passing laws that strengthen worker rights protections, hiring hundreds of new labor inspectors to expand labor law enforcement, hiring and training 100 new police investigators and over 20 new criminal prosecutors to focus on cases of violence against unionists, and taking enforcement actions to combat abusive third-party contracting, including the assessment of significant fines against violators. At the same time, more work remains to be done to fully implement certain aspects of the Action Plan, including collection of assessed fines, prosecution of recent labor homicide cases, and combatting newer forms of abusive contracting. The Obama Administration is working closely with the Colombian government to address these areas of concern. For a detailed update on the Colombian Action Plan Related to Labor Rights, click here.
Commitments to Protect the Environment: Both Parties also committed to effectively enforce their own domestic environmental laws and adopt, maintain, and implement laws, regulations, and all other measures to fulfill their obligations under covered multilateral environmental agreements. All obligations in the environment chapter are subject to the same dispute settlement procedures and enforcement mechanisms as the TPA’s commercial obligations.