Construction Equipment Sector

An Expert's View about Mining, Quarrying and Construction Machinery in Colombia

Posted on: 25 May 2012

The construction equipment sector accounted for over $787 million in U.S. exports to Colombia over 2008-10 (average) or 8.7 percent of total U.S. industrial exports to Colombia.

The U.S.-Colombia Trade Promotion Agreement Opportunities for the U.S. Construction Equipment Sector The U.S.-Colombia Trade Promotion Agreement would provide signicant commercial opportunities for U.S. exporters: • Colombia is the 9th largest market for U.S. construction equipment exports. • Estimated duties paid on exports of U.S. construction equipment to Colombia were over $200 million from 2008 to 2010. Tari elimination could allow U.S. rms to reinvest in technology and production improvements. • Approximately 98 percent of U.S. construction equipment exports to Colombia would receive duty-free treatment immediately upon implementation of the U.S.-Colombia Trade Promotion Agreement; Colombian construction equipment taris currently average 10.4 percent, ranging up to 15 percent. Construction Equipment Sector Overview U.S. Construction Equipment • The construction equipment sector accounted for over $787 Exports to Colombia Averaged million in U.S. exports to Colombia over 2008-10 (average) or 8.7 1 percent of total U.S. industrial exports to Colombia. $787.4 Million • Top U.S. construction equipment exports to Colombia include boring and sinking machinery parts, mechanical shovels, $820 dumpers, and bulldozers. $800 • In 2009, U.S. production of construction equipment products was 2 about $40 billion. $780 • The U.S. construction equipment sector employed over 130,000 $760 3 workers in the United States in 2009. $740 $720 Improved Market Access for U.S. Construction 2008 2009 2010 Equipment Exporters to Colombia • Colombian construction equipment taris currently average 10.4 percent, ranging from 5 to 15 percent. All U.S. Construction Equipment • Over 98 percent of U.S. construction equipment exports to Exports to Colombia Would be Duty- Colombia would receive duty-free treatment immediately upon 4 Free Within 5 Years implementation of the trade agreement. 2% • Taris on the remaining 2 percent of construction equipment exports would be eliminated in ve years. Key States Exporting to Colombia Immediate • Top U.S. states exporting construction equipment to Colombia include: Texas, Florida, Alabama, Illinois, Wisconsin, Pennsylvania, 5 5 Years, Georgia, Iowa, New York, and Oklahoma. Linear 98% 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Colombia. The denition for construction equipment used in this report, unless otherwise cited, includes selected products within Harmonized System (HS) Chapters 84 and 87. 2 U.S. Department of Commerce, U.S. Census Bureau, NAICS 333120, 333131, 333923, and 333924. Shipments used as a best available proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, NAICS 33312 and 33392 (non-seasonally adjusted data). 4 Data based on three-year average for 2008-2010. 5 U.S. Department of Commerce, U.S. Census Bureau. In Millions USD Foreign Competition in Colombian Market • Colombia signed trade agreements with both the EU and Canada EU Could Gain a Tari Advantage in November, 2008. Additionally, Colombia has FTAs in force with In the Colombian Construction the rest of the Andean Community, Chile, Mexico, El Salvador, Equipment Market Guatemala, and Honduras. Colombia grants some preferential 12 access to MERCOSUR, CARICOM, Costa Rica, Nicaragua, and Panama. 10 • Upon implementation of its agreement, EU construction 8 equipment exporters would enjoy a 6.2 percent average tari 6 EU advantage over U.S. exports. However, if the U.S.-Colombia TPA US 4 is implemented at the same time, U.S. exports would have an MFN 6 immediate 1.8 percent average tari advantage over the EU. 2 0 Other Key Commitments by Colombia for the Construction Equipment Sector Government Procurement: The government procurement provisions of the U.S.-Colombia Trade Promotion Agreement guarantee non- discriminatory access to the procurements of most Colombian central government entities, including all key ministries and signicant state-owned enterprises, as well as Colombia’s regional governments. The Agreement also imposes strong disciplines on government procurement procedures, such as requiring advance public notice of purchases and provision of information to all interested suppliers, regarding covered procurement opportunities, as well as timely and eective domestic review procedures. 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. 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. Remanufactured Goods: Colombia will eliminate its prohibition on the importation of remanufactured goods upon entry into force of the Agreement. Most Colombian taris on remanufactured goods will be eliminated immediately upon entry into force of the agreement, while taris on a small number of remanufactured goods will phase out over ten years. 6 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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