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Oct 13, 2011
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Colombia's winners, losers in U.S. free trade deal

By
Reuters
Published
Oct 13, 2011

Oct 12 (Reuters) - The U.S. Congress on Wednesday approved a long-delayed trade pact Colombia, along with deals with South Korea and Panama. Here is an assessment of some possible winners, including the textiles, clothing and leather sectors emerging from the U.S.-Colombia accord.


COLOMBIA, Bogotá : A model presents creations by Colombian brand Siuk during the International Footwear and Leather Show in Bogota, on August 5, 2009. AFP PHOTO/Guillermo Legaria

Here is an assessment of some possible winners and losers emerging from the U.S.-Colombia accord.

WINNERS

The deal could add 0.5 to 1.0 percentage points to Colombian GDP growth and is expected to help Colombia triple exports to the United States over the next five or six years, from $17 billion a year currently to some $50 billion, Commerce Minister Sergio Diaz-Granados said. Non-mineral exports will generate an additional 300,000 jobs over the same period, the minister said.

Textiles and clothing

The Andean nation last year boosted clothing and textile exports to the United States by 17.4 percent versus 2009. Since the expiration of the trade preferences act, Colombian products such as children's clothes, jeans, underwear and sheets are paying duties averaging between 25 percent and 35 percent. Now they will be tariff-free, saving millions of dollars per year.

Leather goods


Colombia exported $250 million in leather goods such as bags, wallets and suitcases in 2010, and exports in the first months of 2011 grew 35 percent, despite a fall in the demand for footwear. Since expiration of the preferences act, leather products have paid $3 million in tariffs. With the free-trade deal, sales could increase 15 percent per year on average and allow zero-tariff machinery imports.

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