Machinery Sector

An Expert's View about Machinery and Robotics in Colombia

Posted on: 25 May 2012

The machinery sector accounted for over $1.2 billion in U.S. exports to Colombia over 2008-10 (average) or 13.3 percent of total U.S. industrial exports to Colombia.

The U.S.-Colombia Trade Promotion Agreement Opportunities for the U.S. Machinery Sector The U.S.-Colombia Trade Promotion Agreement would provide signicant commercial opportunities for U.S. exporters: • Colombia is the 15th largest market for U.S. machinery exports. • Estimated duties paid on exports of U.S. machinery to Colombia were over $365 million from 2008 to 2010. Tari elimination could allow U.S. rms to reinvest in technology and production improvements. • More than 70 percent of U.S. machinery exports to Colombia would receive duty-free treatment within ve years of implementation of the U.S.-Colombia Trade Promotion Agreement; Colombian machinery taris currently average 9.4 percent, ranging up to 20 percent. Machinery Sector Overview U.S. Machinery Exports to • The machinery sector accounted for over $1.2 billion in U.S. Colombia Averaged $1208.1 exports to Colombia over 2008-10 (average) or 13.3 percent of 1 total U.S. industrial exports to Colombia. Million • Top U.S. machinery exports to Colombia include parts of liquid pumps, air pumps and compressors, lifting machinery, valves, and $1,300 machinery parts. $1,250 • In 2009, U.S. production of machinery products was over $293 $1,200 2 billion. $1,150 • The U.S. machinery sector, as dened, employed over 500,000 $1,100 3 workers in 2009. $1,050 $1,000 • U.S. SMEs exported approximately $765 million in machinery 4 $950 products to Colombia in 2008. 2008 2009 2010 Improved Market Access for U.S. Machinery 70% of U.S. Machinery Exports to Exporters to Colombia Colombia Would be Duty-Free Within • Colombian machinery taris currently average 9.4 percent, ranging from zero to 20 percent. 5 Years • Over 66 percent of U.S. machinery exports to Colombia would receive duty-free treatment immediately upon implementation of Immediate 5 the trade agreement. 30% • Taris on an additional 4 percent of machinery exports to 5 Years, Colombia would be eliminated over ve years and taris on the Linear remaining 30 percent of machinery exports would be eliminated 10 Years in equal cuts over ten years. 4% 66% Selected Sub-Sectors: • Energy Equipment: Colombia would eliminate its taris on 52 percent of U.S. energy equipment exports immediately upon implementation of the trade agreement. Taris on an additional 6 percent of exports would be eliminated over ve years, and taris on the remaining 42 percent of exports would be eliminated over ten years. • Hand & Power Tools: Colombia would eliminate its taris on 36 percent of U.S. tool exports immediately upon 1 Global Trade Atlas. Calculations by the U.S. Department of Commerce based on import data as reported by Colombia. The denition for machinery used in this report, unless otherwise cited, is based on products within Harmonized System (HS) Chapters 73, 82-85, 87, and 89-91. 2 U.S. Department of Commerce, U.S. Census Bureau, within NAICS 331-335. Shipments used as a best available proxy for production. 3 U.S. Department of Labor, Bureau of Labor Statistics, within NAICS 331-335 (non-seasonally adjusted data). 4 U.S. Department of Commerce, U.S. Census Bureau, NAICS 333. 5 Data based on three-year average for 2008-2010. In Millions USD implementation of the trade agreement. Taris on an additional 30 percent of exports would be eliminated over ve years, and taris on the remaining 34 percent of exports would be eliminated over EU Could Gain a Tari Advantage ten years. In the Colombian Machinery Key States Exporting to Colombia Market • Top U.S. states exporting machinery to Colombia include: Florida, 10 Texas, Ohio, California, Pennsylvania, Illinois, Wisconsin, New York, 9 6 8 Alabama, and Oklahoma. 7 6 Foreign Competition in Colombian Market 5 EU • Colombia signed trade agreements with both the EU and Canada 4 US in November, 2008. Additionally, Colombia has FTAs in force with 3 MFN 2 the rest of the Andean Community, Chile, Mexico, El Salvador, 1 Guatemala, and Honduras. Colombia grants some preferential 0 access to MERCOSUR, CARICOM, Costa Rica, Nicaragua, and Panama. • Upon implementation of its agreement, EU machinery exporters would enjoy a 5.1 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 0.8 7 percent average tari advantage over the EU. Other Key Commitments by Colombia for the Machinery 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. 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. 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. 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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