Congress Approves FTAs, Renews GSP and ATPA Programs
The Colombia, Korea and Panama free trade agreement implementation legislation was approved last night by both chambers of Congress.
The FTAs were signed in 2006-2007, but congressional approval for implementation had been delayed due to various domestic interests. They were finally endorsed yesterday with fairly comfortable margins, though as expected, a large majority of Democrats in the House voted against the Colombia FTA due to ongoing concerns about labor rights protections. President Obama is expected to sign the agreements sometime next week.
While actual implementation may take several months to complete, companies can now prepare to take advantage of these economy-boosting preferential trade programs. According to the International Trade Commission, the Colombia FTA will expand exports of U.S. goods alone by more than $1.1 billion while the Korea FTA promises to add $10 billion to annual merchandise exports to Korea. While Panama is a smaller market, the Panama FTA will eventually eliminate all tariffs on U.S. industrial and agricultural goods, and will open Panama’s market to immediate duty-free status on 88% of U.S. commercial and industrial exports, and over 50% of U.S. farm exports, to Panama. Duty free treatment on approximately 80% of qualifying imports into the U.S. from each of the three countries will also apply upon implementation.
In addition to the FTAs, on Oct. 12 Congress approved a reauthorization and extension of the Generalized System of Preferences (GSP) and the Andean Trade Preference Act (ATPA) through July 31, 2013. The renewal of these programs, which expired earlier this year, will also allow importers to recoup duties that have been paid on qualifying imports made since their expiration, provided a sufficient request for refunds proving eligibility is filed with U.S. Customs and Border Protection within 180 days of when the president signs the act. Moving forward, both Colombia and Panama will be removed as eligible countries under the ATPA and the Caribbean Basin Economic Recovery Act (CBERA) programs once their respective FTAs enter into force.
These FTAs and trade preference programs will provide greater market access and substantial duty savings for U.S. exporters and importers that can navigate the technical details of each agreement. Sandler, Travis & Rosenberg, P.A. will host webinars to assist you with your questions. Check back end of October for specifics. For questions and advice on each one of these trade programs, please contact Nicole Bivens Collinson at 202-471-3232 or David Cohen at 202-471-3230.