After years of negotiations and months of ironing out the fine details, the United States–Colombia Trade Promotion Agreement ("COTPA")will go into effect on May 15th, 2012.
The U.S. exported $14.3 billion in goods to Colombia last year and imported $23.1 billion, according to the U.S. Commerce Department. The trade deal, approved by the U.S. Congress in October of 2011, will add as much as $1.1 billion to U.S. exports when it takes full effect, according to estimates from the U.S. International Trade Commission.
On May 15th, over 80 percent of U.S. exports of consumer and industrial products to Colombia will become duty-free, including agricultural and construction equipment, building products, aircraft and parts, fertilizers, information technology equipment, medical scientific equipment, and wood. Also, immediately more than half of U.S. exports of agricultural commodities to Colombia will become duty-free, including wheat, barley, soybeans, high-quality beef, bacon, and almost all fruit and vegetable products.
Although Colombia has been a trading partner with the U.S. for years, the rules and requirements will change immediately for importers and exporters and those rules are extensive. Specifically, as in other Free Trade Agreements ("FTA"), gathering the appropriate documentation and maintaining the right records evidencing the country of origin of goods is critical in order to qualify for COTPA preferential treatment.
A common mistake made by U.S. importers of Colombia goods is relying on the simple fact that a good is being exported from a Colombian company as evidence that a good is Colombian. This is not enough under COTPA's provisions and could expose you to detention and seizure of your goods and penalties and fines for your company from U.S. Customs and Border Protection. Be sure to contact a qualified professional to ensure compliance with these rules and requirements and start benefiting from the FTA as soon as possible.