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Urgent Need for Early Approval of the Colombia Trade Promotion Agreement

The United States (US) and Colombia have agreed to a comprehensive trade opening agreement that will enhance economic growth and prosperity between the United States and Colombia. The Colombia Trade Promotion Agreement (CTPA) will generate opportunities for US goods and services exporters; help create jobs in the United States; foster economic growth in Colombia and contribute to efforts to counter narcoterrorism, which threatens democracy and regional stability.

It is in the interest of the United States and Colombia to secure early approval of the CTPA in order to maintain and enhance economic opportunities in both countries. The CTPA is an instrument that will provide certainty and stability in the bilateral trade and investment relationship for many years to come.

The United States and Colombia have advanced their commercial and investment relationship, moving from the current Andean Trade Promotion and Drug Eradication Act (ATPDEA), which provides unilateral trade preferences in the US market, to a wide-ranging trade agreement.

ATPDEA has been a win-win program, as the CTPA will be. ATPDEA has proven to be a key element in the US counternarcotics and anti-terrorism strategy by promoting employment and export diversification in Colombia as an alternative to illegal activities.

US imports from Colombia in 2005 amounted to US$ 8,770 million, of which 53 percent, (US$ 4,653 million) benefited from ATPDEA preferences. In the first semester of 2006, US imports from Colombia under ATPDEA grew 33.1 percent to US$ 2,723 million.

On the other hand, the United States is the leading source of imports for Colombia. In 2005, Colombian imports from the United States reached US$ 8,450 million, growing 27.3 percent from the 2004 figure. In the first semester of 2006, Colombian imports from the United States totaled US$ 3,200 million, an increase of nine percent from 2005.

It is a fact that the more Colombia is able to export to the United States, the more Colombia will acquire from US producers. This is especially true in the textiles and apparel sector, which imports significant amounts of components and raw materials from the United States.

Moreover, the United States is Colombia’s leading supplier of boilers, machinery and mechanical appliances, organic chemicals, plastics, among other products.

The flower sector, one of the main beneficiaries of ATPDEA preferences, has created many jobs in rural areas in Colombia, mainly among women, while at the same time providing jobs and income to thousands of people in the United States.

Due to the fact that the ATPDEA preferences are scheduled to expire on December 31, 2006, it is paramount for Colombia and the United States to avoid any disruption in the conditions granted to Colombian exports—through these preferences—and which, at the same time, have benefited US producers.

Since 1991, the United States has supported Colombia, through unilateral programs to combat drug production and drug trafficking, offering trade opportunities to develop and strengthen legitimate industries. Soon the CTPA will reduce and eliminate barriers to trade and investment between Colombia and the United States.

The CTPA must be approved in the United States and Colombian Congresses as soon as possible. However, since it is not clear whether the CTPA can be implemented before January 1, 2007, it is vital to ensure the maintenance of benefits to Colombia and the United States that the ATPDEA has provided and that the CTPA will strengthen. This can be accomplished through a temporary ATPDEA extension until the CTPA’s entry into force.

We ask our friends in the United States for their support in seeking early Congressional approval of the CTPA and a temporary extension of ATPDEA. The United States-Colombia trade and investment relationship will benefit immensely from this decision.

Issue Date

Author(s)

Minister of Commerce, Industry and Tourism, Republic of Colombia