The Miami Herald

Decoding U.S.-Colombia FTA keeps Miami law firms busy

Trade isn’t the only thing that’s expected to increase with the U.S.-Colombia Free Trade Agreement. It’s also a growth opportunity for lawyers.

Since the agreement went into effect May 15, law firms have been holding roundtable discussions, offering seminars on how to take advantage of the new trading relationship and visiting Colombia to advise business executives on how the trade pact will affect them.

Trade between Florida and Colombia was already increasing before the trade agreement was implemented, and trade promotion officials hope the treaty will push trade numbers even higher. In the first quarter of 2012, Florida exports to Colombia were up 15.9 percent to $1.42 billion and imports from Colombia grew by 22 percent to $1.1 billion. Some 39 percent of all U.S. exports to Colombia move through Florida ports.

“For South Florida and Florida in general, this is a treaty of tremendous relevance,” said Carlos Aguilar, director of the international practice group at Boyd & Jenerette, which held a roundtable on the FTA in June. With it, he said, comes not only the promise of more trade but also job creation.

Colombia had a preferential trade relationship with the United States under the Andean trade preferences agreement since 1991, allowing most Colombian exports to enter the United States duty-free, but it periodically lapsed and had to be renewed. Now the FTA offers certainty that the rules of the trade relationship won’t change and extends duty-free treatment to U.S. exports as well.

The FTA allows more than 1,100 Colombian products to enter the United States duty-free with tariffs on other products phased out over 10 years. More than 80 percent of U.S. industrial and consumer products and more than half of U.S. farm exports now have duty-free access to the Colombian market with tariffs on the remaining products removed over the next 10 to 15 years.

Although Colombia and the United States have been trading partners for years, the rules and regulations of the relationship under the FTA have changed — and that’s where the lawyers come in.

The new rules can be complicated, starting with what constitutes a Colombian product and what is truly a U.S. product, especially if some of the components are made elsewhere. Rules of origin for some products — thread to sew garments, for example — are more restrictive than they were under the old Andean trade preferences.

To be eligible to export their products duty-free, Colombia producers may need to change sources for some components, said Gilbert Lee Sandler, a partner at Sandler, Travis & Rosenberg.

“Selling to or buying from Colombia is way different from selling to Columbia, S.C.,” said Ronald Neiwirth, an attorney at Boyd & Jenerette.

An exporter or importer must, for example, consider political risk as well as exchange and monetary risks, be aware of differing product liability and technical standards, and learn the rules for competing for government contracts, lawyers at the Boyd & Jenerette roundtable said.

South Florida lawyers also have been traveling to Colombia since the FTA went into effect to brief Colombia exporters on the new rules and opportunities.

At the invitation of PROEXPORT — Colombia’s trade, tourism, and investment promotion agency, Peter Quinter, an international attorney with Gray/Robinson, and his associate Melissa Groisman Steinfeld took part in a four-city tour, speaking to enthusiastic audiences in Bogotá, Barranquilla, Cali and Medellin.

They concentrated on opportunities in the cosmetics, manufacturing, electronics and medical device industries and the new rules that apply to them..

Quinter said he expects international investment to pick up in Colombia as multinationals use the country as a platform to export into the United States duty-free. “That’s the investment pattern that was established in Mexico after NAFTA,’’ he said.

Sandler Travis also has been busy explaining the new rules. So far it has given three webinars and is partnering with a Colombian law firm, Araújo Ibarra & Associates, to give industry-specific seminars in Colombia.

“There have been lots of shifts in the tariff code, so we’re focusing on particular industries and saying, ‘Here’s your great opportunity,’ ” said Edgar Asebey-Birkholm, who is working on the seminar project. “The industry is really looking for someone to decode this so they can take advantage.”




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