Free-Trade Agreement With Colombia Goes into Effect Next Month

After years of negotiations and months of ironing out the fine details, the United States–Colombia Free Trade Agreement will go into effect May 15.

That is good news for apparel and textile makers, whose goods will see tariffs eliminated on items made from regional yarns. Knit fabric follows a fiber-forward rule.

Many U.S. companies export yarns and textiles to Colombia, where they are converted into clothing and often sent back to the United States.
In 2011, U.S. apparel and textile exports to Colombia totaled $165 million, with most of that being textiles and yarns. The United States in 2011 imported $263.5 million in textiles and apparel from Colombia, with the bulk of that being apparel.

Implementation of the free-trade agreement was announced April 15, when President Barack Obama was in Cartagena, Colombia, for a three-day Summit of the Americas meeting.

One of the sticking points to getting the new free-trade agreement up and running were changes Colombia needed to make to assure that their labor leaders and union organizers received better treatment. Several labor leaders have been killed for their organizing efforts.

U.S. Trade Representative Ron Kirk said, “Colombia has successfully implemented the key elements of the Action Plan Related to Labor Rights, which the Obama administration negotiated to gain domestic support.”

Some of those elements include the Colombian government passing legislation to create a Ministry of Labor. It also approved legislation criminalizing interference in the exercise of labor rights and launched the doubling of its labor inspectors.

The Obama administration expects the new free-trade agreement will expand U.S. exports by $1.1 billion a year and increase the U.S. gross domestic product by $2.5 billion.

In 2011, the United States exported $14.3 billion in goods to the South American country. Colombia is a large importer of U.S. grain, and it exports a fair amount of tropical fruits to the United States.

Implementation of the U.S.-Colombia free-trade agreement comes shortly after the launch of the U.S.–South Korea Free Trade Agreement on March 15.. The U.S.–Panama Free Trade Agreement, which was passed by Congress last year along with the trade pacts with Colombia and South Korea, is still awaiting implementation.—Deborah Belgum