U.S.-Colombia Free-Trade Pact Negotiated

After days of intense negotiations, the United States and Colombia agreed upon a free-trade deal that will eliminate tariffs and quotas on most goods and services.

The free-trade agreement is good news for U.S. apparel manufacturers who are guaranteed that the clothing they make in Colombia will continue to receive duty- and quotafree status if it meets the rules of origin as negotiated under the Andean Trade Promotion and Drug Eradication Act, which expires at the end of 2006.

ATPDEA was designed to help Peru, Colombia, Ecuador and Bolivia divert their economies away from drug production and trafficking.

Polo Ralph Lauren now makes about 40 percent of its childrenswear in Colombia, giving it an annual $6 million savings by avoiding tariffs, company executives said. Apparel imported from countries that don’t have a free-trade agreement with the United States, such as China, pay an average textile duty of 16 percent.

The agreement was announced on Feb. 27 in Washington, D.C. By this summer or fall, Congress is expected to approve the Colombia free trade agreement as well as a Peruvian free trade agreement concluded in December.

“An agreement with Colombia is an essential component of our regional strategy to advance free trade within our hemisphere, combat narco-trafficking, build democratic institutions and promote economic development,” U.S. Trade Representative Rob Portman said in a statement. The Bush administration began free-trade talks with three of the Andean countries—Ecuador, Peru and Colombia—in May 2004. Negotiations are ongoing with Ecuador. Bolivia has participated as an observer in the free-trade negotiations and could be part of a free-trade agreement at a later date.

Two-way trade between Colombia and the United States was $14.3 billion in 2005.

Colombia’s apparel exports to the United States totaled more than $618 million in 2005. —Deborah Belgum