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Deal is expected to strengthen US-Colombian economic ties, says USTR

WASHINGTON, DC – 11/27/06 – The US has signed a free-trade agreement (FTA) with Colombia, the 10th such agreement passed under the president's trade promotion authority, which is set to expire in July 2007.

Both countries now will submit the agreement to their respective legislatures for approval.

The agreement “will offer new opportunities for US-based businesses, manufacturers, farmers and ranchers" and “provide Colombia with permanent access to the US market, which will aid in sustaining real growth, creating more jobs and attracting new investment," said John Veroneau, Deputy US Trade Representative.

Veroneau (above, standing left) signed the agreement on behalf of the US with Colombian Minister of Trade, Industry and Tourism Jorge Humberto Botero in Washington.

The new agreement is expected also to support Colombia's "reform-minded government," which has “promoted policies to combat narcotics trafficking, reinforce democratic institutions and generate economic development,” said US Trade Representative (USTR) Susan Schwab when the agreement was reached by both countries' trade negotiators earlier in 2006.

The pact faces some obstacles, however. Some members of Congress have indicated they would not vote in favor of the pact unless it is rewritten to contain more protections for labor rights and the environment, and because of sensitivities that imports of Colombian sugar might threaten US sugar producers.

Private-sector sources are reported to have said that getting Congress to approve the Colombia FTA would be more difficult than securing approval of a US-Peru trade agreement because Colombia has a history of blocking union organizers.

Both the Colombian and Peruvian FTAs must be acted on by the House Ways and Means and Senate Finance committees before they can be considered by the full Congress. 

In the wake of the recent midterm US elections and the change in political control of Congress in January 2007, incoming Ways and Means Democratic Committee Chairman Charles Rangel has said that he plans to raise worker rights issues when the accords come before his committee.

Hernando José Gomez, Colombia's chief trade negotiator, has said he expects the Colombian congressional approval process to be finished by January 2007, after which Colombia would submit the agreement to its constitutional court for review, according to news reports.

Trade agreement negotiations began with Colombia in May 2004. An agreement between trade negotiators was initialed in February.

Colombia currently benefits from the Andean Trade Preference Act (ATPA), which also provides trade preferences to Peru, Ecuador and Bolivia. Under that agreement, which is set to expire at the end of 2006, many of Colombia's exports have been allowed to enter the US duty-free.

USTR Schwab said recently that supports an extension of expiring ATPA trade preferences for the four countries, adding that she supports congressional passage of the free trade agreements with both Columbia and Peru.

Rangel says he supports extending ATPA "to give investors, businesses and workers [in the Andean countries] the peace of mind they need to continue growing."

The new US-Colombia agreement would build on the ATPA by giving Colombian producers longer-term access to US markets, Schwab said.

According to a USTR fact sheet, under the agreement, more than 80% of US exports to Colombia – including high-quality beef, cotton, wheat, soybeans and soy meal, key fruits and vegetables, and some processed foods – would immediately become duty-free, and duties for the remainder of exports would be phased out over 10 years.

The US and Colombia also have worked to resolve food safety barriers to trade, including procedures for inspections of beef, pork and poultry, said Schwab.
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The agreement has been endorsed by several US trade groups including the American Farm Bureau Federation, National Association of Manufacturers and the National Council of Textile Organizations.

However, a California beef trade group has expressed concern that if the agreement passes Congress, the US market could be flooded with Colombia beef.

Other provisions of the agreement provide for duty- and quota-free access to both countries' textile markets, provided the products meet the agreement's rules of origin provisions and expand access for US providers to Colombia's services markets, such as in the financial sector.

In addition, the pact mandates greater protection in Colombia for intellectual property rights of such US products as computer software, music and videos and more protection for US patents and trademarks, and grants greater public access to Colombian government information about Customs regulations and requirements.

Under trade promotion authority (TPA) Congress either can approve or reject a negotiated trade agreement within time limits but may not amend the agreement.

In 2005, the US was Colombia's largest trading partner with two-way goods trade between the two countries amounting to $14.3 billion.

Congress currently is considering a foreign aid funding bill for the fiscal year that began October 1 that would provide $704 million for anti-narcotics activities in the Andean Region, with most of the funds to go for efforts in Colombia.

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