Environmental Goods Sector

An Expert's View about Environmental Technologies in Colombia

Posted on: 25 May 2012

The environmental goods sector accounted for over $215 million in U.S. exports to Colombia over 2008-10 (average) or 2.4 percent of total U.S. industrial exports to Colombia.

The U.S.-Colombia Trade Promotion Agreement Opportunities for the U.S. Environmental Goods Sector The U.S.-Colombia Trade Promotion Agreement would provide signicant commercial opportunities for U.S. exporters: • Colombia is the 24th largest market for U.S. environmental goods exports. • Estimated duties paid on exports of U.S. environmental goods to Colombia were over $66 million from 2008 to 2010. Tariff elimination could allow U.S. firms to reinvest in technology and production improvements. • Approximately 78 percent of U.S. environmental goods exports to Colombia would receive duty-free treatment immediately upon implementation of the U.S.-Colombia Trade Promotion Agreement; Colombian environmental goods tariffs currently average 9.9 percent, ranging up to 20 percent. Environmental Goods Sector Overview U.S. Environmental Good Exports • The environmental goods sector accounted for over $215 million to Colombia Averaged $215.8 in U.S. exports to Colombia over 2008-10 (average) or 2.4 percent 1 of total U.S. industrial exports to Colombia. Million • Top U.S. environmental goods exports to Colombia include pumps and compressors, valves, converters, surveying $230 instruments, generating sets, and turbines. $220 • The U.S. environmental goods sector generated approximately 2 $60 billion in equipment sales in 2009. $210 • The U.S. environmental goods sector employed approximately $200 400,000 workers in 2009, with an additional 1.3 million employed $190 3 in environmental services. $180 2008 2009 2010 Improved Market Access for U.S. Environmental Goods Exporters to Colombia • Colombian environmental goods tariffs currently average 9.9 81% of U.S. Environmental Good percent, ranging from zero to 20 percent. Exports to Colombia Would be Duty- • Approximately 78 percent of U.S. environmental goods exports to Colombia would receive duty-free treatment immediately upon Free Within 5 Years 4 implementation of the trade agreement. • Tariffs on an additional 3 percent of environmental goods exports 19% to Colombia would be eliminated over five years. Tariffs on the Immediate 3% remaining 19 percent of environmental goods exports would be eliminated over ten years. 5 Years, Linear Selected Sub-Sectors: 10 Years 78% • Air Pollution Control: Colombia would eliminate its tariffs on 81 percent of U.S. air pollution control equipment exports immediately upon implementation of the trade agreement. Tariffs on the remaining 19 percent of exports would be eliminated over ten years. 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Colombia. The definition for environmental goods used in this report, unless otherwise cited, is based on the Environmental Goods Convergence List tabled as a non-paper in the WTO, with products falling within Harmonized System (HS) Chapters 39, 44, 69, 70, 73, 76, 84, 85, 89, 90 and 95. Total imports by Colombia from the United States have been adjusted in an attempt to capture only environmental goods trade. 2 Environmental Business International, Inc. Note that data for the environmental goods industry and markets vary significantly because of inexact definitions of the sector. 3 Environmental Business International, Inc. 4 Data based on three-year average for 2008-2010. In Millions USD • Environmental Monitoring Equipment: Colombia would eliminate its tariffs on nearly 100 percent of U.S. environmental monitory equipment exports immediately upon implementation of the EU Could Gain a Tari Advantage trade agreement. Tariffs on less than 1 percent of exports would in the Colombian Environmental be eliminated over five years. Goods Market • Solid Waste Management: Colombia would eliminate its tariffs 12 on 89 percent of U.S. solid waste management equipment expor 10ts immediately upon implementation of the trade agreement. Tariffs on an additional 6 percent of exports would be 8 eliminated over five years, and tariffs on the remaining 5 percent 6 EU of exports would be eliminated over ten years. US 4 • Waste Water Management: Colombia would eliminate its tariffs MFN on 2 56 percent of U.S. waste water management equipment exports immediately upon implementation of the trade 0 agreement. Tariffs on an additional 4 percent of exports would be eliminated over five years, and tariffs on the remaining 40 percent of exports would be eliminated over ten years. • Renewable Energy: • Biomass/Biofuel: Colombia would eliminate its tariffs on 85 percent of U.S. biomass/biofuel power exports immediately upon implementation of the trade agreement. Tariffs on an additional 8 percent of exports would be eliminated over five years, and tariffs on the remaining 7 percent of exports would be eliminated over ten years. • Geothermal: Colombia would eliminate its tariffs on 15 percent of U.S. geothermal power exports immediately upon implementation of the trade agreement. Tariffs on the remaining 85 percent of exports would be eliminated over ten years. • Hydropower: Colombia would eliminate its tariffs on 100 percent of U.S. hydropower exports immediately upon implementation of the trade agreement. • Solar: Colombia would eliminate its tariffs on 53 percent of U.S. solar power exports immediately upon implementation of the trade agreement. Tariffs on an additional 11 percent of exports would be eliminated over five years, and tariffs on the remaining 36 percent of exports would be eliminated over ten years. • Wind: Colombia would eliminate its tariffs on 73 percent of U.S. wind power exports immediately upon implementation of the trade agreement. Tariffs on an additional 6 percent of exports would be eliminated over five years, and tariffs on the remaining 21 percent of exports would be eliminated over ten years. Key States Exporting to Colombia • Top U.S. states exporting environmental goods to Colombia include: Texas, Florida, California, Illinois, Oklahoma, 5 Pennsylvania, New York, Wisconsin, Ohio, and North 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 environmental goods exporters would enjoy a 4.8 percent average tariff advantage over U.S. exports. However, if the U.S.-Colombia TPA is implemented at the same time, U.S. exports would 6 have an immediate 1.5 percent average tariff advantage over the EU. Other Key Commitments by Colombia for the Environmental Goods Sector Investment: The U.S.-Colombia Trade Promotion Agreement establishes a strong and predictable legal framework for U.S. investors for all forms of investment. Under the Agreement, Colombia will provide U.S. investors substantive protections and due process rights that are consistent with U.S. legal principles and practice. The Agreement establishes an impartial dispute settlement mechanism for investors to pursue damages for breaches of these protections. 5 U.S. Department of Commerce, U.S. Census Bureau. 6 U.S. Department of Commerce calculations based on EU-Colombia FTA and U.S.-Colombia Trade Agreement tariff commitments and Colombian 2010 Tariff 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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