Colombian Exporters Shrug Off Midnight ATPA Expiration
BOGOTA -(Dow Jones)- A trade deal that gives Andean nations duty-free access to the U.S. expires at midnight Thursday after a temporary renewal, but Colombian exporters are more concerned whether the long-term bill will be approved. "Right now, the important thing is passage of ATPA," Agusto Solano, president of the Colombian Association of Flower Growers, said Thursday. Colombia exports about $500 million in exports to the U.S. each year.
The administration of U.S. President George W. Bush gave a 90-day extension to the Andean Trade Preference Act, or ATPA, in February to give time for the U.S. Senate to debate the bill.
ATPA, which began in 1991 and expired in December, gives duty-free access to the U.S. to thousands of exports, including cut flowers, that come from the Andean nations of Bolivia, Colombia, Ecuador and Peru.
The end of the temporary renewal means exporters must pay a lump sum for all the tariffs that have accumulated during the past three months.
However, these duties will be paid back in full if the U.S. Senate approves a long-term renewal of ATPA. The bill is expected to make a final vote next week.
Solano said he's concerned about ATPA's passage because there are only two weeks left in the U.S. Senate session.
Also, ATPA is attached to a larger trade bill, and Bush officials have hinted that Bush may veto the whole thing if amendments are added to it that he doesn't like.
ATPA was originally created to support the war on drugs by encouraging the diversification of economies, so that farmers of the illicit crops used to make cocaine and heroin would shift to legal products.
ATPA has created $1.2 billion in new trade for the Andean nations, and created 140,000 new jobs in Colombia alone, trade officials in Bogota say.
Meanwhile, the Colombian government export bank Bancoldex said Thursday it would reinstate credit lines of $100 million and 100 billion pesos ($1=COP2308) to provide liquidity for exporters who, starting Thursday night, must begin paying U.S. tariffs.
This is the same program that Bancoldex began in January and was suspended in February when Bush signed the 90-day ATPA extension.
The liquidity will be available for Colombian exporters until ATPA is approved or until the funds run out, Bancoldex said in a statement.
Colombian exports that had been covered under ATPA must pay between 7% and 30% tariffs on their U.S.-bound products without ATPA.
-By Dan Molinski, Dow Jones Newswires; 571-602-1203; colombia at dowjones.com
(This story was originally published by Dow Jones Newswires)