When the free trade pact went into effect last May, 80 percent of U.S. consumer and industrial goods became eligible to enter Colombia duty-free and by the fifth year of the pact, 95 percent of Colombia tariffs on U.S. products will be eliminated. By the 10th year of the agreement, all remaining duties will be phased out. In the first year of the pact, 57 percent of Colombian exports have benefited, according to the Colombian Embassy in Washington.
Last year, U.S. exports to Colombia reached $16.4 billion, a 15 percent increase over 2011. From May 2012 to March, the U.S. Commerce Department says U.S. exports to Colombia were $15.9 billion, up 20 percent compared to a similar period the previous year.
The U.S. is Colombia’s largest trading partner, accounting for 30 percent of its total trade in 2012, and it was the second largest trading partner of the Miami Customs District, which includes airports and seaports from Palm Beach to Key West.
So far, most of the impact from the free trade agreement has been on the U.S. side because most Colombian products already entered the United States duty-free under the Andean Promotion and Drug Eradication Act, which was designed to encourage economic alternatives to cocaine production. However, 1,000 Colombian products, including sugar, textiles, tuna, dairy products and confectionary goods, that didn’t benefit are now covered by the FTA.
The act also had to be renewed periodically and occasionally lapsed.
That’s what happened to U.S. flower importers just before Valentine’s Day 2011 when the trade preference act expired. The impact rippled through South Florida because Miami is the top U.S. gateway for entry of fresh-cut flowers. About two-thirds of the blooms consumed in the U.S. arrive here and Colombia is one of the main suppliers.
“The last four years have been very stressful with the trade preference being renewed at the last minute and in February 2011, actually expiring. Even when it was renewed, importers didn’t know until the last moment so they still had to make contingency plans,’’ said Christine Boldt, executive vice president of the Association of Floral Importers of Florida.
“Now we have permanent status” for duty-free treatment, she said. And under the free trade pact, a merchandise processing fee no longer has to be paid.
Fresh-cut flowers imports, which totaled $604.3 million in 2012 — a 12.5 percent increase, were the second most important Colombian product shipped to the Miami district behind gold imports, which — buoyed by strong prices — surged to $2.9 billion last year.
Hernando José Gómez, head of the FTA implementation office in Bogotá, said the fact that Colombia didn’t see exports to the United States surge in the last year doesn’t mean the program is flawed.
“It has been a very positive year,” he said. “We have more than 700 new exporting companies and we’ve exported 187 products that we had never sold to the United States before, but it’s been a difficult economic environment.”
Among the products sold to the United States for the first time were ammonia, electrical transformers, live yeasts, cocoa butter, and merchandise-wrapping machines, he said.
Other non-traditional exports saw impressive growth, he said. Towels, tablecloths and curtains, were up 54 percent, sweets were up 50 percent, aluminum doors and windows were up 53 percent, and filets of fresh-water tilapia were up 479 percent.