Chemicals Sector

An Expert's View about Chemicals in Colombia

Posted on: 25 May 2012

The chemicals sector accounted for nearly $2.5 billion in U.S. exports to Colombia over 2008-10 (average) or 27.3 percent of total U.S. industrial exports to Colombia.

The U.S.-Colombia Trade Promotion Agreement Opportunities for the U.S. Chemicals Sector The U.S.-Colombia Trade Promotion Agreement would provide signicant commercial opportunities for U.S. exporters: • Colombia is the 14th largest market for U.S. chemicals exports. • Estimated duties paid on exports of U.S. chemical products to Colombia were nearly $480 million from 2008 to 2010. Tari elimination could allow U.S. rms to reinvest in technology and production improvements. • More than 86 percent of U.S. chemicals exports to Colombia would receive duty-free treatment immediately upon implementation of the U.S.-Colombia Trade Promotion Agreement; Colombian chemicals taris currently average 7.6 percent, ranging up to 20 percent. Chemicals Sector Overview U.S. Chemicals Exports to • The chemicals sector accounted for nearly $2.5 billion in U.S. Colombia Averaged $2487.4 exports to Colombia over 2008-10 (average) or 27.3 percent of 1 total U.S. industrial exports to Colombia. Million • Top U.S. chemicals exports to Colombia include organic chemicals, medications, polymers and resins, and fertilizers. $3,000 • The U.S. chemicals sector, which is highly integrated into the $2,500 world economy and global supply chains, accounted for 18 $2,000 2 percent of U.S. manufacturing production in 2009. $1,500 • U.S. SMEs exported nearly $825 million in chemicals, plastics, and 3 $1,000 rubber to Colombia in 2008. $500 • The U.S. chemicals sector employed over 1.4 million workers in 4 $0 2009. 2008 2009 2010 Improved Market Access for U.S. Chemicals Exporters to Colombia • Colombian chemicals taris currently average 7.6 percent, ranging from zero to 20 percent. 88% of U.S. Chemical Exports to • Over 86 percent of U.S. chemicals exports to Colombia would Colombia Would be Duty-Free Within receive duty-free treatment immediately upon implementation of 5 the trade agreement. 5 Years • Taris on an additional 2 percent of chemicals exports to 8% Colombia would be eliminated over ve years and tar 2%is on a 4% Immediate further 4 percent of chemicals exports would be eliminated over seven years. Taris on the remaining 8 percent of U.S. chemicals 5 Years, Linear exports would be eliminated in equal cuts over ten years. 7 Years 10 Years Selected Sub-Sectors: • Cosmetics: Colombia would eliminate its taris on 78 percent of 86% U.S. cosmetics exports immediately upon implementation of the trade agreement. Taris on an additional 4 percent of exports would be eliminated over ve years and taris on the remaining 18 percent of exports would be eliminated over ten years. 1 Global Trade Atlas. Calculation based on import data as reported by Colombia. The denition for chemicals used in this report, unless otherwise cited, is based on Harmonized System (HS) Chapters 28-40. 2 U.S. Department of Commerce, U.S. Census Bureau, within NAICS 325 and 326. Shipments used as a best available proxy for production. 3 U.S. Department of Commerce, U.S. Census Bureau, within NAICS 325 and 326. 4 U.S. Department of Labor, Bureau of Labor Statistics, within NAICS 325 and 326 (based on non-seasonally adjusted data). 5 Data based on three-year average for 2008-2010. In Millions USD • Plastics: Colombia would eliminate its taris on 75 percent of U.S. EU Could Gain a Tari Advantage plastics exports immediately upon implementation of the trade agreement. Taris on an additional 2 percent of exports would be In the Colombian Chemicals eliminated over ve years and taris on the remaining 23 percent Market of exports would be eliminated within ten years. 7 • Pharmaceuticals: Colombia would eliminate its taris on 97 6 percent of U.S. pharmaceutical exports immediately upon 5 implementation of the trade agreement. Taris on the remaining 4 3 percent of exports would be eliminated over ten years. EU 3 • Fertilizers and Agro-chemicals: Colombia would eliminate its US 2 tar MFNis on 100 percent of U.S. fertilizer and agro-chemical exports 1 immediately upon implementation of the trade agreement. 0 • Rubber: Colombia would eliminate its taris on 64 percent of U.S. rubber product exports immediately upon implementation of the trade agreement. Taris on the remaining 36 percent of exports would be eliminated over ten years. Key States Exporting to Colombia • Top U.S. states exporting chemicals to Colombia include: Texas, Florida, Louisiana, New Jersey, North Carolina, Georgia, 6 California, Illinois, and South Carolina. Foreign Competition in Colombian Market • Colombia signed trade agreements with both the EU and Canada in November, 2008. Additionally, Colombia has FTAs in force with the rest of the Andean Community, Chile, Mexico, El Salvador, Guatemala, and Honduras. Colombia grants some preferential access to MERCOSUR, CARICOM, Costa Rica, Nicaragua, and Panama. • Upon implementation of its agreement, EU chemicals exporters would enjoy a 3.8 percent average tari advantage over U.S. exports. However, if the U.S.-Colombia TPA is implemented at the same time, U.S. exports would have an immediate 7 1.1 percent average tari advantage over the EU. Other Key Commitments by Colombia for the Chemicals Sector Rules of Origin: The U.S.-Colombia Trade Promotion Agreement rules of origin allow only U.S. and Colombian originating goods to receive preferential tari treatment under the Agreement. The trade agreement rules of origin provide clear requirements for a good to be considered originating, including on goods wholly obtained or produced entirely in the territory of the United States or Colombia, as well as requirements on materials that are used in the production of the good. Intellectual Property Rights: The U.S.-Colombia Trade Promotion Agreement requires high levels of intellectual property protection and enforcement, consistent with U.S. and international standards, and will support the growth of trade in valuable digital and other intellectual property-based products. The Agreement will provide for enhanced protections for trademarks, copyrights, and patents, such as the implementation a Colombian electronic trademark application system and on-line database, prohibitions on the circumvention of technological protection measures used by copyright holders, as well as ensuring that the parties will provide robust patent and test data protection. Pharmaceutical Data Protection: Colombia has obligated itself to data protection for pharmaceuticals for ve years. Pharmaceutical companies can introduce new medicines in the Colombian market condent that their product will have both patent and data protections. 6 U.S. Department of Commerce, U.S. Census Bureau. 7 U.S. Department of Commerce calculations based on EU-Colombia FTA and U.S.-Colombia Trade Agreement tari commitments and Colombian 2010 Tari Schedule. Average Tari April 2011 The International Trade Administration - Your Global Business Partner The International Trade Administration (ITA) – a division of the U.S. Department of Commerce – strengthens the competitiveness of U.S. industry, promotes trade and investment, and ensures fair trade through the rigorous enforcement of our trade laws and agreements. ITA also utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. For more information on exporting to Colombia, please contact: • The ITA office of the U.S. Embassy in Colombia at office.bogota@trade.gov, or 011-571-275-2519, or by visiting our website http://www.export.gov/colombia. • The U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://www.export.gov/eac. For more information on the U.S.-Colombia Trade Promotion Agreement, please visit www.export.gov/fta/colombia and www.trade.gov/fta/colombia. For more information on industry-specific issues, please visit http://trade.gov/mas/index.asp.
Posted: 25 May 2012

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