The Presidents of the United States and Colombia announced at a joint press conference in Cartagena that a landmark Free Trade Agreement between the two nations will become effective on May 15, 2012, gradually exempting the vast majority of goods from bilateral trade taxes.

According to a statement from the US government, the trade agreement will eliminate tariffs and other barriers to bilateral trade, expand exports of US goods by more than USD1.1bn and boost US gross domestic product by USD2.5bn.

Under the pact, over 80% of US exports of consumer and industrial products to Colombia will become duty free immediately, with the remaining tariffs phased out over 10 years. Almost all sectors will benefit from a 0% tariff rate, which is to apply to: metal and ores; infrastructure and machinery; transportation equipment; auto and auto parts; building products; paper and paper products; and consumer goods. Presently, tariffs on US products range from 7.4% to 14.6%.

Many agricultural commodities also will benefit from the agreement, as more than half of current US farm exports to Colombia will become duty-free immediately, and virtually all remaining tariffs will be eliminated within 15 years. Colombia will immediately eliminate duties on wheat, barley, soybeans, soybean meal and flour, high-quality beef, bacon, almost all fruit and vegetable products, wheat, peanuts, whey, cotton, and the vast majority of processed products. The agreement also provides duty free tariff rate quotas on standard beef, chicken leg quarters, dairy products, corn, sorghum, animal feeds, rice, and soybean oil.

April 18, 2012

Source: Tax News

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