Kirk And Uribe Discuss US Colombia FTA

by Mike Godfrey, Tax-News.com, Washington

Friday, July 03, 2009

US Trade Representative Ron Kirk and Colombian President Alvaro Uribe met in Washington on June 29 to discuss the US-Colombia FTA, which remains unratified by the US more than two-and-a-half years after it was signed.

The US-Colombia FTA was signed in November 2006 by then President George W. Bush, but its path to final ratification was blocked by Congressional Democrats who cited concerns over lax protection of labor rights.

According to the USTR Office, the two men exchanged views during their meeting on next steps for “addressing concerns that have been raised regarding the ability of Colombians to exercise their fundamental labor rights.” However, despite the Obama administration’s new willingness to put the final seal on pending trade agreements, which also include FTAs with Panama and South Korea, progress in ironing out issues of concern to the White House and senior Congressional Democrats has been frustrating slow for those anxious to see trade tariffs eliminated. These concerns include, in the case of Panama, tax transparency, and in the case of South Korea, protecting the US auto industry against a feared flood of cheap Korean motor imports (perhaps defeating the purpose of a ‘free trade’ agreement).

The Colombia FTA is a comprehensive free trade agreement. When the Colombia FTA enters into force, Colombia will immediately eliminate most of its tariffs on US exports, with all remaining tariffs phased out over defined time periods.

The Colombia FTA also includes important disciplines relating to customs administration and trade facilitation, technical barriers to trade, government procurement, investment, telecommunications, electronic commerce, intellectual property rights, and labor and environmental protection.

According to the USTR Office, US firms will have better access to Colombia's services sector than other World Trade Orgnization members have under the General Agreement on Tariff and Trade. All service sectors are covered under the Colombia FTA except where Colombia has made specific exceptions.

Colombia's Congress approved the agreement and a protocol of amendment in 2007. Colombia's Constitutional Court completed its review in July 2008, and concluded that the Agreement conforms to Colombia's Constitution.

Colombia is currently America’s 27th largest goods trading partner with USD24.5bn in total bilateral goods trade during 2008. Goods exports totaled USD11.4bn; goods imports totaled USD13.1bn.

The top US export categories in 2008 were machinery (USD2.6bn), mineral fuel (oil) (USD997m), organic chemicals (USD974m) cereals (corn and wheat) (USD969m), and electrical machinery (USD950m).

The top export categories to the US in 2008 were machinery (USD2.6bn), mineral fuel (oil) (USD997m), organic chemicals (USD974m) cereals (corn and wheat) (USD969m), and electrical machinery (USD950m).

US foreign direct investment (FDI) in Colombia (stock) was USD5.6bn in 2007, a 21.2% increase from 2006. US direct investment in Colombia is primarily concentrated in the mining, and manufacturing sectors.