Required Report - public distribution

**Date:** 6/22/2006

**GAIN Report Number:** CO6008

CO6008

**Colombia**

**Trade Policy Monitoring**

**Annual**

**2006**

**Approved by:**

![](media/image1.wmf)David J. Mergen

U.S. Embassy

**Prepared by:**

Alberto Restrepo

**Report Highlights:**

Colombia and the U.S. concluded negotiations for a bilateral free trade
agreement in February 2006 that is currently under revision by both
countries. In a side letter to the FTA, Colombia agreed to lift BSE and
Avian Influenza restrictions, and recognize equivalency for the U.S.
inspection system. The main barriers for U.S. agricultural exports to
Colombia are high duties under the price band system, the import ban for
poultry parts and high duties for sensitive products like beef, rice,
milk powder and dry beans.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Bogota \[CO1\]

\[CO\]

Table of Contents

[Section I. OVERVIEW 3](#section-i.-overview)

[A. Executive Summary 3](#a.-executive-summary)

[B. Importance of Colombia to U.S. Agricultural Exports
4](#b.-importance-of-colombia-to-u.s.-agricultural-exports)

[Section II. AGREEMENT COMPLIANCE 5](#section-ii.-agreement-compliance)

[A. World Trade Organization 5](#a.-world-trade-organization)

[1. Market Access 5](#market-access)

[a. Tariffs 5](#a.-tariffs)

[b. Restrictive Import Licensing 6](#b.-restrictive-import-licensing)

[c. Sanitary and Phytosanitary Measures
6](#c.-sanitary-and-phytosanitary-measures)

[2. Export Subsidies 7](#export-subsidies)

[3. Domestic Support 7](#domestic-support)

[Cotton 9](#cotton)

[B. Trade Agreements 10](#b.-trade-agreements)

[1. U.S. Non‑party Agreements 10](#u.s.-nonparty-agreements)

[2. Bilateral Trade Agreements 11](#bilateral-trade-agreements)

[3. Preferential Trade Agreements with the United States
12](#preferential-trade-agreements-with-the-united-states)

[4. Other Preferential Trade Treatments
12](#other-preferential-trade-treatments)

[Section III. TRADE BARRIER CATALOG
12](#section-iii.-trade-barrier-catalog)

[A. Products and Sectors Affected by Trade Restrictions
12](#a.-products-and-sectors-affected-by-trade-restrictions)

[B. Description of Individual Trade Barriers
15](#b.-description-of-individual-trade-barriers)

[1. Andean Community Barriers 15](#andean-community-barriers)

[a. Variable Duties Under the Price Band System
15](#a.-variable-duties-under-the-price-band-system)

[b. Regional Andean Community Sanitary and Phyto-sanitary Regulations
15](#b.-regional-andean-community-sanitary-and-phyto-sanitary-regulations)

[2. Colombian Trade Barriers 16](#colombian-trade-barriers)

[a. Restrictive Licensing 16](#a.-restrictive-licensing)

[b. Value‑Added Tax (VAT) 16](#b.-valueadded-tax-vat)

[c. Sanitary and Phytosanitary Non-Tariff Barriers
16](#c.-sanitary-and-phytosanitary-non-tariff-barriers)

[Meat and Meat Products Import Regulations
16](#meat-and-meat-products-import-regulations)

[Labeling for Food Raw Materials 18](#labeling-for-food-raw-materials)

[Section IV. REFERENCE MATERIAL 19](#section-iv.-reference-material)

[Appendix A 19](#appendix-a)

[Appendix B 21](#appendix-b)

[Appendix D 27](#appendix-d)

[Appendix E 28](#appendix-e)

[Appendix F 29](#appendix-f)

[Appendix G 30](#appendix-g)

[Appendix H 30](#appendix-h)

[Appendix I -- FTA Side Letter on SPS Issues
31](#appendix-i-fta-side-letter-on-sps-issues)

# Section I. OVERVIEW

## A. Executive Summary

The U.S. and Colombia reached agreement on a free trade agreement (FTA)
on February 27, 2006; although the final agreement is still under
revision and has not yet been published. In the FTA, Colombia agreed to
eliminate all agricultural tariffs and will set up tariff-rate quotas
for sensitive products that have longer phase out periods (the maximum
is 19 years for rice). Colombia agreed in a side letter to the FTA to
lift BSE and Avian Influenza restrictions, and recognize equivalency for
the U.S. inspection system.

Colombia currently applies the relatively high basic duties of the
Andean Community, with most agricultural products subject to duties of
between 10 and 20 percent. This basic duty can be increased under
safeguard provisions (the basic duty for dry beans was increased to 60
percent and the basic duty for beef increased to 180 percent). In
addition, it applies the Andean "price band" duties for sensitive
agricultural commodities (pork, poultry, dairy, wheat, corn, rice,
soybeans, vegetable oils, sorghum, sugar, and processed products such as
dry pet food that include these ingredients). Under the price band
system, imports pay a surcharge (which currently ranges from zero to 92
percent) if the import price is below the reference price (there is also
a possibility of receiving a discount if world prices are sufficiently
high). The system is very similar to the price band system in Chile,
which a WTO panel ruled in violation of WTO rules. Colombia has also set
maximum or minimum duties for products under the price band system. The
maximum duty for oilseeds and products is 40 percent, while the
following products have set minimum duties that are above the price band
duty: milk powder is 50 percent, white corn is 45 percent, milled rice
is 80 percent.

Colombia also maintains discretionary import licensing for poultry leg
quarters that has been used to ban imports. Colombia will lift this
restriction under the FTA. Some products also benefit from a system of
producer financed export subsidies (sugar, palm oil, beef and milk
powder). With the exception of beef, exports are in excess of Colombia's
WTO export subsidy commitments. The largest programs are for sugar
(Colombian domestic sugar prices are almost as high as US prices) and
palm oil (local production is growing rapidly and would be competitive
even without the subsidies).

Colombia places no restrictions on biotech products other than some
labeling requirements, and the Agriculture Ministry and farm groups
actively support the adoption of biotechnology in Colombia. The
Colombian Government has joined the US biotech panel against the EU as a
third party. The recent introduction of a regulation requiring licensing
for GMO's handling prompted a quick reaction by the US government that
resulted in the elimination of the GMO regulation as it may have become
a trade barrier.

The USDA is cooperating with the Colombian government on foot-and-mouth
disease eradication and on pest risk assessments for fruit exports to
the U.S.

Colombia's preferential trade agreements with other countries (CAN,
Mercosur and Chile) have presented a barrier for some US exports.
Colombia imports most soybeans and soybean products from Bolivia and
Paraguay due to the preferential arrangements, while US wine and fruits
are charged higher duties than imports from Chile. The tariff advantages
of other countries will be eliminated under the FTA. The tariff for
soybeans, soybean meal, wine, apples, pears and grapes will be reduced
to zero immediately.

Despite the high levels of protection, Colombia is the largest market
for US agricultural products in South America, with imports of \$677
million in 2005 and significant potential for additional growth. The top
US exports are corn (Colombia is one of the top ten markets for US
corn), wheat, processed food and cotton. The main Colombian exports to
the US are flowers, coffee and bananas.

## B. Importance of Colombia to U.S. Agricultural Exports

+---------------+------------+------------+-------------+------------+
| U.S.          |            |            |             |            |
| Agricultural  |            |            |             |            |
| Exports to    |            |            |             |            |
| Central and   |            |            |             |            |
| South America |            |            |             |            |
|               |            |            |             |            |
| Calendar Year |            |            |             |            |
| 2005          |            |            |             |            |
|               |            |            |             |            |
| US million    |            |            |             |            |
| dollars       |            |            |             |            |
+===============+============+============+=============+============+
| Country       | Bulk       | In         | Consumer    | TOTAL\*    |
|               |            | termediate | Oriented    |            |
+---------------+------------+------------+-------------+------------+
| Mexico        | 2,966      | 2,219      | 4,177       | 9,362      |
+---------------+------------+------------+-------------+------------+
| Colombia      | 453        | 150        | 74          | 677        |
+---------------+------------+------------+-------------+------------+
| Guatemala     | 185        | 126        | 142         | 453        |
+---------------+------------+------------+-------------+------------+
| Venezuela     | 209        | 136        | 64          | 409        |
+---------------+------------+------------+-------------+------------+
| Costa Rica    | 212        | 33         | 52          | 297        |
+---------------+------------+------------+-------------+------------+
| El Salvador   | 129        | 61         | 46          | 236        |
+---------------+------------+------------+-------------+------------+
| Brazil        | 28         | 110        | 88          | 226        |
+---------------+------------+------------+-------------+------------+
| Peru          | 148        | 41         | 23          | 212        |
+---------------+------------+------------+-------------+------------+
| Chile         | 21         | 76         | 47          | 144        |
+---------------+------------+------------+-------------+------------+
| Argentina     | 2          | 48         | 21          | 71         |
+---------------+------------+------------+-------------+------------+

\* Fishery and forestry products are not included.

Source: U.S. Bureau of Census Trade Data.

As a large producer of coffee, flowers and bananas, Colombia is a net
exporter of agricultural products. Colombia imported about \$2.2 billion
of agricultural products in calendar 2005. In 2005, Colombia exported
\$1,658 million in agricultural products to the United States, compared
to \$792 million in agricultural imports from the U.S. (source is
Colombian trade data). The main agricultural imports are corn, wheat,
processed food products, soybean meal, soybeans, and cotton, in that
order.

Total corn imports were \$ 276 million in 2005 (2.3 million tons), 3.4
percent down from \$285.7 in 2004, due to a reduction in international
prices that allowed a larger imported volume to meet a strong growth of
the local feed industry. Wheat imports reached \$235.4 million, which
represents a growth of 1 percent from a year before. The U.S. had a 65.6
percent of the Colombian wheat imports, an increase from the previous
year market share of 58 percent. Canada was the main competitor followed
by Argentina that is favored by lower duties under a bilateral agreement
between Colombia and Mercosur implemented in 2005. Since domestic cotton
output is well short of domestic demand, strong imports will continue to
meet the growing industrial demand (\$47.7 million in 2005 with the U.S.
supplying a 96 percent of the market). Although Colombian imports of
soybeans and soybean meal in 2005 showed a decline, those originating in
the US increased 21 percent for soybean meal and 18 percent for
soybeans. A stronger peso (4.4% was its revaluation in 2005) and the
active marketing activities by the U.S. soybean producers induced their
growth. Colombian imports of consumer-oriented products from all sources
grew 15.6 percent in 2005, but the U.S. sales of these products grew
25.6 percent from \$59 to \$74 million in 2005.

# Section II. AGREEMENT COMPLIANCE

## A. World Trade Organization

Colombia has been a member of the WTO (and GATT) since 1981. Although,
in general, Colombia complies with its WTO commitments, it has
implemented a number of trade‑distorting policies, which adversely
affect agricultural imports from the United States. Colombia had a WTO
exemption that allowed it to maintain regulations requiring absorption
of domestic production, in order to be able to import several products.
This exemption was phased out in a 3-year period ended in December of
2003. In February 2004, Colombia started a new system to guarantee the
purchase of local production by the industry. The new system is a
tariff-rate quota, with the in-quota amount auctioned off based on the
importers commitment to purchase local production.

The Andean price band system is clearly in violation of WTO rules, as
demonstrated in the WTO panel ruling against the very similar Chilean
price band system. Our ability to take on this problem has, however,
been constrained by the possibility that Colombia could replace this
system with even higher fixed duties (Colombian has very high bound
duties in the WTO). The agreement in the FTA to eliminate tariffs,
including the price band duties, will eliminate this problem.

The Price Stabilization Funds for sugar, palm oil, milk powder and beef
operate as producer financed export subsidy programs, although the
Colombian government continues to insist that this is not the case.
Except for beef, the amounts exported under these programs are in excess
of Colombia's export subsidy commitments in the WTO.

Colombia also maintains discretionary import licensing for sensitive
products in violation of WTO rules. Currently, only poultry parts
imports are totally banned through use of this requirement.

### 1. Market Access

#### a. Tariffs

***Basic tariff rates*** for agricultural products imported from
Non-Andean Community countries stand at levels of 5, 10, 15, and 20
percent of their CIF value (ad-valorem), depending on the degree of
processing of the product and its domestic need. These rates conform to
Andean Community regulations:

-   Five percent is assessed on raw materials, intermediate and capital
    goods not produced in Colombia;

-   Ten and fifteen percent assessed on goods in the previous category
    but with domestic production registered in Colombia;

-   20 percent is assessed on processed or finished consumer goods;

-   In addition, some agricultural products fall under a variable import
    duty---Andean Community price band\--that have recently varied
    between 5 and 80 percent; and

● finally, Colombia raised the tariff on beef and beef offal from 20 to
80 percent in May 2003, with a tariff-rate quota of 3,000 tons at the
previous 20 percent duty. The action was reviewed in December 2003 to
separate beef and beef offal. Beef remained as described above, but beef
offal was levied 70 percent from the previous 20 percent. A tariff-rate
quota of 4,000 tons of beef offal at the previous 20 percent duty was
established. Decree 1140 of April 14, 2005, established TRQ's for 3,800
tons of bovine meat and 4,000 tons for bovine offals. Decree 3744 of
October 21, 2005, established TRQ's for 3,800 tons of bovine meat and
3,200 tons for bovine offals. The government of Colombia has maintained
a 60% import duty on dry beans since August 2001. Decree 3724 of
12/19/03 established an out-of-TRQ import duty of 80% on milled rice.
The TRQ is equivalent to 75,118 tons/year. Decree 4338 of 12/22/04 broke
down the HS position 10.06.30 into 10.06.30.00.10 short kernel rice
(sushi rice) with a 20% import duty, and 10.06.30.00.90 (other rice)
with 80% import duty. Colombia also has implemented a set duty of 50
percent for milk powder, 45 percent for white corn and 80 percent for
rice.

#### b. Restrictive Import Licensing

Colombia maintains a policy of restrictive discretionary import
licensing for sensitive agricultural products. Colombia currently
maintains discretionary import licensing for poultry parts and turkey
(the licensing requirement for milk powder was replaced by a 50 percent
duty at the end of 2004). The import licensing requirements are a
significant import barrier since import licenses for selected products
are rejected whenever authorities determine that they are harmful to
domestic production. Imports from countries with trade agreements with
Colombia, such as the Andean Community and Chile, do not require
Ministry of Agriculture (MOA) approval to obtain an import license
(except in cases where safeguards are applied).

In order to reduce the subjectivity of the import license approval
process at the Ministry of Agriculture, a committee for agricultural
imports was established in August, 2001. However, the tendency to issue
rather arbitrary decisions adversely affecting agricultural imports
remains unchanged.

#### c. Sanitary and Phytosanitary Measures

Colombia agreed in the FTA to lift the BSE related ban on boneless U.S.
beef from animals under 30 months of age and some offals (livers,
kidneys and stomachs) by April 15. They agreed to lift the restrictions
on 10 US states prohibited from exporting poultry by May 15. Finally,
they agreed to lift restrictions on all beef (except specified risk
materials like brains, eyes and the spinal cord) by May 31. Colombia
also agreed in the side letter to recognize equivalency for the U.S.
inspection system. Appendix I shows the text of the side letter.

The U.S. and Colombia are currently negotiating the terms for Colombia
to comply with this commitment. While Colombia continues to recognize
equivalency, the GOC has not lifted the beef and poultry restrictions.
Instead of simply lifting the import restrictions, the GOC has proposed
new requirements that create serious problems for U.S. exports.

All processed food items for retail sale, including products imported in
bulk for repackaging for retail use without further processing, must be
registered and approved by the National Institute for the Surveillance
of Food and Medicines (INVIMA), which is part of the Ministry of Social
Protection. Food products that are sold to restaurants, institutions, or
to processors do not need to be registered with INVIMA, but according to
the interpretation given by Invima to Decree 4764 of December 30, 2005,
the importers of such products have to fulfill some burocratic
requirements . Products that have not undergone transformation, such as
fresh or frozen produce and meat, also do not need INVIMA registration,
but each shipment of meat and meat products must be approved by INVIMA
in order to be imported. A transformed product is defined by the GOC as
having been subjected to processing that resulted in a change in its
internal structure. The registration fee ranges from \$609 for
consumer-ready products to \$1,277 for enriched/fortified food products,
and generally takes three working days to complete (although this can be
much longer in some cases).

Non‑transformed products that are fresh or frozen (meat and produce) do
not need an INVIMA registration, but they do need a sanitary permit from
the Ministry of Agriculture\'s Colombian Agricultural Institute (ICA).
ICA is responsible for the issuance of import health permits for animal
products, vegetables, fruits, and grains. This permit details the
sanitary import requirements for these products. The Colombian importer
must first obtain the import permit from ICA, before requesting an
import license from Ministry of Commerce, Industry and Tourism (MOCIT).
An ICA resolution requires that an ICA import permit be supplied by the
importer to the exporter for submission to USDA, before products are
shipped. USDA will then issue a sanitary export certificate referencing
the requirements in ICA\'s import permit. In the case of meat and meat
products, FSIS (Food Safety and Inspection Service) of the USDA
maintains the current sanitary requirements for the different importing
countries on its web page.

### 2. Export Subsidies

Price Stabilization Funds for sugar, palm oil, dairy and beef operate as
producer financed export subsidies. The Funds were established under the
provisions of Agricultural Law 101 of 1993. The Sugar Price
Stabilization Fund was implemented in 2000 under Ministry of Agriculture
Decree No. 569, dated March 30, 2000. The palm oil fund was established
under Presidential Decree No. 2354 of 1996 and the fund for meat and
milk was established under Presidential Decree 1187 of 1999.

The Price Stabilization Funds levy a tax on domestic sales that is used
to provide export subsidy payments for excess production. In 2004
exports under this program totaled 1.23 million tons for sugar (the WTO
commitment for 2003 is 227,653 tons), 214,300,tons for palm oil (the
commitment level is zero), 5,590 tons for milk powder (the commitment
level is zero) and 13,353 tons for beef (the commitment level for 2003
is 8,582 tons).

The GOC established in 1967 export subsidies called CERTs to promote the
export of non‑traditional products, i.e., commodities other than coffee
and petroleum. The CERT was an income tax rebate certificate that could
be redeemed one year after its issuance or negotiated at a discount in
the stock market. Initially, all products benefitting from CERTs were
granted a 15 percent export subsidy. The Colombian government eliminated
payments under the CERT by decree 1989 of 2002 after a phasing out
process of several years.

The Colombian Government implemented an export subsidy program for
bananas and flowers in 2005 in response to the rising value of the
Colombian peso. The GOC spent about 70 billion pesos, or US\$30.4
million, on the "Exchange Rate Hedging" for these two basic industries.

### 3. Domestic Support

The Colombian Government has announced that it will initiate a new
domestic support program in connection with implementation of the FTA.
Expenditures under the program are expected to be around \$200 million
annually, although no details of how the program will operate have been
published.

Colombia\'s economic liberalization program, initiated in 1991, opened
the Colombian economy to international trade at the same time that it
attempted to place agriculture on equal conditions as the rest of the
economy. However, since that time, Colombia has continually looked for
way to restrict imports of agricultural products and to encourage
domestic production. As part of this effort, the Colombian Ministry of
Agriculture has actively pursued sectoral agreements that require
domestic industry to purchase domestic crops.

Also, the GOC is giving financial support to growers through the
FINAGRO--financial Government institution\--devoted to providing credit
to the agricultural sector. In order to encourage more investment on
farming infrastructure and equipment, the GOC has provided a rebate of
between 20 and 40 percent on loans made for the purchase of equipment
and infrastructure named \"Incentivo a la Capitalizacion Rural (ICR)\".
In 2003, the government passed new legislation to provide an exemption
from paying income taxes for up to 14 years for new plantations of
African palm, fruit trees, rubber and cocoa. Investors in forestry
projects are allowed to deduct up to 20 percent of the cost of new
investments from the total income taxes they are due to pay. For some
crops, the GOC does development work on more productive and
disease‑resistant varieties and provides extension services.

**Value of ICR Subsidies Paid by Type of Investment**

> (Million current pesos)

  ---------------------------- --------------- --------------- -----------
  **Investment area**          **2003**        **2004**        **2005**

  Irrigation and land          19724           1483            4484
  reclamation                                                  

  Machinery & equipment        12337           481             2959

  Infrastructure               3770            814             1127

  Perennials crops             13293           17467           15715

  Transport infrastructure &   6502            1184            2095
  equipment                                                    

  Purebred cattle              621             48              \-

                                                               

  **Total**                    **46247**       **21477**       **26380**
  ---------------------------- --------------- --------------- -----------

**Corn**

*Corn* production is estimated at 1.23 million tons in 2005, with a
slight decrease to 1.22 million tons expected in 2006. Government
incentives resulted in some increase in mechanized areas during the last
few years, however, some of this area is now leaving production due to
high production costs, bad weather and greater pest problems. These
areas are highly sensitive to prices and will likely move to other crops
or uses. Increased competition under the U.S. -- Colombia free trade
agreement will reinforce the trend for some areas of low productivity to
move to other activities.

Colombian production of corn has been highly protected to maintain
prices well above world market prices and equivalent support levels in
the U.S. or even Europe. The Colombian domestic price for corn of around
\$210 per ton is well above the U.S. target price of \$102 per ton and
is also well above support levels in the European Union. The Colombian
Government currently gives a duty rebate to importers that also purchase
local production in order to support the local price.

###### Rice

Domestic rice production is seasonal, with periods of shortage and
oversupply. Rice production in traditional rice growing areas is
expected to remain stable while new areas in the far-eastern plains will
decrease in area due to the delayed effect of bad weather and higher
pest appearances that have resulted in lower yields and increased
production costs. Total rough rice production is expected to decline to
2.15 million tons in 2006 from 2.17 million tons in 2005. Previous
growth in rice area was stimulated by strong protection --imports pay an
80% duty - and government support.

The GOC established an incentive for rice storage some few years ago to
reduce the adverse effect of production swings on grower prices. The
incentive was calculated at 17,000 pesos (US\$7.4) per month for every
ton of dry paddy rice kept in storage. This is an increase of 26 percent
over the previous level of 13,500 pesos (\$5.9). During the period
July-October 2005 (when the largest harvest came from the Eastern
Plains), there were 310,000 tons of dry paddy rice stored. The GOC paid
approximately 18 billion pesos (\$ 8.2 million) to store 350,000 tons of
rice for the main crop (July-October) of 2005.

**Wheat**

Wheat crop area in Colombia will continue without major changes in the
next two years. Small growers with traditional farming practices and low
investment are maintaining production at around 33,000 tons a year. An
unfavorable climate for growing milling quality wheat, relatively low
duties under the Andean price band system (the duty at the start of
April 2006 was 5 percent) and the absence of government incentives make
increases in production unlikely. The milling industry has traditionally
purchased all of local wheat production in order to avoid import
restrictions imposed by the government.

Grower prices are adjusted annually in time for the onset of the major
harvest in July. The minimum grower price for the current crop is being
negotiated, but the one currently prevailing is 560,000 pesos (\$243.50)
per ton. This price is 20 percent higher than the previous one that was
established for the second half of 2003. The price has remained
unchanged in the last four years as price adjustments have been higher
than the inflation rate.

# Cotton

The government has guaranteed a high cotton purchase price to growers of
approximately 80 US cents per pound, which has resulted in additional
costs for both the local industry and the Colombian Government. The
Colombian Government spend an estimated \$17 million in direct payments
in 2004, while the local industry also provided support in the form of
high purchase prices. The support price for the 2005 price was increased
at the end of 2004 (from 4 million pesos per ton to 4.2 million pesos,
which is at the current exchange rate is approximately 80 U.S. cents per
pound, i.e. much higher than support prices in the U.S.)

**Coffee**

The entry of the U.S. into the ICO has been welcomed by the Colombian
coffee sector. Exporters are very happy to have back the main coffee
consuming country as a member. Coffee exporters report that controls on
quality coffee are improving and country of origin recognition is now
stronger. The coffee sector is very much focused on improving quality
and it believes that having the U.S. as a member of the ICO can assist
in this area.

The production policy of the Coffee Growers Federation has been oriented
toward achieving efficient production and high quality. As part of this
strategy, CENICAFE (Scientific Research Center for Coffee) has developed
new techniques to improve the efficiency of picking ripe coffee cherries
by hand, to reduce the harvest time and limit the amount of fallen
coffee cherries (that can host coffee pests). Picking of coffee cherries
represents an estimated 40 percent of production costs. The Coffee
Growers Federation is also encouraging supplementary activities for
small coffee producers to diversify their income. Ninety percent of
coffee plantations are less than 5 hectares.

## 

The government is not making subsidy payments to producers at this time
because the international price is well above the trigger price of 80
cents per pound for the support.

The government gives credit to the growers for investments in
infrastructure devoted to processing organic coffee. Growers receive
from FINAGRO -- the government financial institution- subsidized credit
with 20-40 percent of the debt forgiven.

## B. Trade Agreements

The negotiations of a bilateral free trade agreement (FTA) between
Colombia and the US ended on February 27, 2006. Currently, both
governments are revising the commitments contained in the agreement
before notification to Congress and formal signing of the agreement. The
U.S. must notify the agreement to Congress at least 90 days before it is
signed. The agreement can be submitted to Congress for approval after it
has been signed. No date has been set for Congressional approval,
although this is likely to be in early 2007.

### 1. U.S. Non‑party Agreements

**Andean Community of Nations**

Colombia has been a member of the Andean Community (AC) since its
creation in 1969. Other members are Ecuador, Peru, and Bolivia.
Venezuela withdrew from the Andean Community in April 2006, although the
tariff preferences of the agreement will remain in place for another 5
years. The main reason given by Venezuela for this decision was because
of the FTA agreements of Colombia and Peru with the U.S. Venezuela is
Colombia's second export market after the US with exports amounting to
\$2.1 billion in 2005 while imports were \$1.2 billion, making it the
fifth largest supplier to Colombia.

As a free-trade zone, agricultural products from the Andean Community
countries enter Colombia duty free. The AC has a third-country tariff
rate schedule and a price band system, which includes most agricultural
products. Products traded between AC countries must be accompanied of a
Certificate of Origin to avoid triangulation. Colombia has been facing
increasing trade problems with Venezuela and Ecuador on some
agricultural commodities, such as corn and wheat, because those
countries negotiated WTO trade rate quotas and import duties lower than
Colombia's. Safeguard provisions in the agreement are often invoked to
keep out products (such as rice) from the other members.

**Latin American Integration Association (LAIA)**

LAIA includes the South and Central American countries. Colombia has
been a member of LAIA since 1981.

**G-3 (Group of 3)**

The G-3 agreement between Colombia, Venezuela and Mexico was implemented
in 1995. Imports from Venezuela continue under the AC regulations.
Except for sugar, duties for the agricultural products were gradually
reduced until 2004 when they became duty free. However, Mexican products
under the AC price band will continue under that regimen.

In early 2006, Venezuela has also announced its withdrawal from the G-3
but it is only an announcement as of this date.

**Andean Community - Mercosur Agreement**

Andean Community countries (Colombia, Ecuador and Venezuela) and
Mercosur members signed an Economic Supplemental Agreement in October
2004. This agreement includes a free trade program that Colombia put in
place in early February 2005. The trade liberalization program agreed
for grains has the following basic features:

*Corn:* Fifteen year phase out period to bring the basic corn duty of 15
percent down to zero (the variable component of the price band will
continue to be applied). For 2005, Colombia granted to Argentina and
Brazil a 26 percent preference and 14 percent preference to Paraguay and
Uruguay on the 15% basic duty, the variable duty of the Andean Community
would remain applicable. Under this agreement, corn imports from
Argentina currently pay 3.9 percentage points less in duties than
imports from the U.S. and other countries.

*Rice:* Colombia will phase out the fixed/base duty of 15 percent for
paddy rice and 20 percent for milled rice over 15 years, while
maintaining the variable component of the price band duty. For 2005,
Colombia granted to Mercosur countries a 14 percent preference on the
basic duty (paddy 15%; Milled 20%).

*Wheat:* Wheat and products containing wheat will be taken out of the
price band system and are not subject to the special agricultural
safeguard. Colombia will phase out over a 6-year period (by 2009) the
duty of 15 percent. For 2005, Colombia granted a preference (reduction)
of the 15% base duty of 36 percent to Argentina and Brazil, 48 percent
to Paraguay and 40 percent to Uruguay.

**CARICOM**

This agreement consists of 12 countries in the Caribbean Basin. Colombia
became a member of CARICOM in 1994. Colombia is interested in this
market because of its potential exports to those countries.

**CENTRAL AMERICAN COUNTRIES**

In order to activate trade with Central American countries, Colombia is
negotiating a free trade agreement with Guatemala, Honduras and El
Salvador. The process of six rounds is scheduled to finish in December
2006. Colombia is currently selling about 10 percent of total annual
exports to the three countries. Transportation is a limiting factor for
a more active trade in Central America.

### 2. Bilateral Trade Agreements

**Chile**

This agreement has been in effect since 1994. Gradual tariff reductions
will continue through 2011, when all imports from that country into
Colombia will be duty free. However, most Chilean agricultural products
already enter Colombia duty free. With the help of duty-free access
under this agreement, Chile is an important competitor to the United
States for wine, apples, pears, grapes and peaches.

**Brazil, Argentina, Uruguay and Paraguay**

Due to the signing of a CAN-MERCOSUR agreement in October 2004, the
previous bilateral trade agreements were superseded. The application of
duty preferences is the lowest between the previous bilateral agreements
(PAR) and the CAN-MERCOSUR most recent agreement.

###  

**Other Bilateral Agreements**

Colombia has signed bilateral agreements with other countries, such as
Algeria, China, Egypt, India, Indonesia, Israel, Ivory Coast, Kenya,
Malaysia, Morocco, Panama, Romania, the Russian Federation, and South
Korea. These agreements were mainly signed in the interest of Colombia
having these countries as potential buyers for Colombian exports.

### 3. Preferential Trade Agreements with the United States

**Andean Trade Preference and Drug Eradication Act (ATPDEA)**

Renewal and expansion of the Andean trade preferences was approved in
August 2002 and implemented on October 2002, after 10 years of
preferential access to the United States, under the Andean Trade
Preference Act (ATPA).

With the extension given under APTDEA, Colombia now enjoys a unilateral
preference to additional products (in addition to flowers), mainly
apparels and textiles, which, so far benefit not only Colombian exports
but also U.S. cotton exports to Colombia. ATPDEA will expire on December
31, 2006 and Colombia realizes that it will be very difficult to get an
extension to this bilateral concesion. This has been one of the basic
reasons that Colombia requested the Free Trade Agreement (FTA).

**U.S. Sugar Tariff‑Rate Quota**

Colombia has been exporting sugar to the United States under the U.S.
Tariff‑Rate Quota since 1982, when the quota was established. The sugar
import quota for Colombia represents two percent of Colombia\'s total
sugar export volume in marketing year 2003/04. Although this is a
relatively small share of Colombia\'s total exports, the local industry
views the U.S. quota volume as a significant issue, given the
profitability of these sales. Colombia's sugar quota remained unchanged
at 25,273 tons for the period FY 2003-2005.

The FY 2006 total TRQ for Colombia is 43,121 tons, after two increases
to the global TRQ for sugar.

### 4. Other Preferential Trade Treatments

**European Union (EU)**

The EU granted preferential treatment to a number of Colombian
agricultural products from the first 24 chapters of the Harmonized
Schedule.

**Other Preferential Trade Treatments**

Colombia receives preferential treatment for its exports to Bulgaria,
Canada, Japan, New Zealand, Poland, and Switzerland.

# Section III. TRADE BARRIER CATALOG

## A. Products and Sectors Affected by Trade Restrictions

Several products and sectors in Colombia, which are major U.S.markets,
are subject to trade restricting policies:

**Chicken**

All imports of chicken meat must have the approval of the Ministry of
Agriculture before the Ministry of Commerce, Industry and Tourism
(MOCIT) grants an import license. Import licenses are never approved for
whole chickens and chicken parts, which are very price competitive in
the international market, and therefore not allowed entry into the
country.

Approval is regularly given for imports of Mechanically Deboned Chicken
(MDC). After a relentless effort by the Ag Office over a three-year
period, a regulation that required zero pathogens on chicken that was an
effective non-tariff barrier for MDC imports was finally superseded by
the implementation of a modern HACCP regulation. The Decree 60 of
January 18, 2002, by the Ministry of Social Protection (previously known
as Ministry of Health) establishes the introduction of HACCP in
Colombia. ICA, the Colombian government agency in charge of animal and
plant health, has recognized the US sanitary system for both plants and
animals. Under this recognition, the US exporting plants must register
at ICA by proving that they are under US official sanitary supervision.

The domestic poultry industry is strong and uses modern production and
processing techniques. However, high variable duties on corn and
oilseeds and products drive up costs of production for the industry. The
industry has a high degree of protection, because of high variable
duties under the Andean Community price band system and restrictive
licensing of imports. These two factors result in very high domestic
prices for poultry, which seriously restrict growth in demand in the
Colombian market. Lack of demand growth, because of relatively high
prices and heavy protection for the industry, often results in periods
of overproduction. This results in heavy industry pressure on the GOC to
restrict poultry meat imports further, either through restrictive
licensing or non-tariff barriers.

On March 30, 2001, the Andean Community approved a Colombian request to
include seasoned chicken and turkey parts in the Andean Community Price
band system. The total duty levied on these product categories increased
from a basic duty of 20 percent to a basic and variable duty of 70
percent.

**Turkey/Geese/Ducks**

There is excellent market potential in Colombia for imported turkey
meat, both at the retail level and in the manufacturing industry.
However, in practice, it is impossible to import U.S. turkey, since
import licenses are rarely granted. High variable duties under the
Andean Community price band system are also an issue. Currently they
range from 23 percent for whole turkeys to 209 percent for turkey parts,
while poultry preparations are levied 70 percent. The distortions in
trade regulations have resulted in favoring whole turkey imports from
Peru with zero duty and from Chile under the Andean price band system of
variable duty of 23 percent, currently.

Ducks and geese imports are treated similarly to turkeys. However, local
importers report that import licenses for U.S. whole ducks and geese
have been approved without problems. The GOC accepts now that there is
no domestic commercial production of these species.

**Wheat**

The variable duty, under the Andean Community price band system,
restricts demand for U.S. wheat in Colombia. The variable levy on wheat
that was as high as 66 percent was capped at 35 percent in September
1999. However, because of the ascending level of the reference price the
total duty currently applied is 5 percent.

**Feed Grains**

Almost all corn produced in Colombia is used for human consumption,
while imports are directed to the feed industry, mostly for poultry. The
United States is the dominant supplier with an 86 percent and 99 percent
of total feed corn and white corn imports in 2005. The duty applied to
feed corn under the Andean Community price band was 15 percent for the
first half of May 2006 and 18 percent for the first half of June 2006.
These variable duty levels are a result of a lowering of the price band
reference price due to the slight decline in world corn prices.

**Pet Food**

The variable duty on feed grains is extended to products, such as dry
pet food, which may contain grain and are considered to be linked
products of corn. They are therefore assessed the high variable duty
(currently 18 percent and as high as 95 percent in recent years) for
corn, which is a major barrier to increased U.S. pet food exports to
Colombia. Domestically produced pet food rarely contains domestically
produced corn. So, there is little rationale for applying the variable
duties of corn on a product that has no need of protection. In addition,
many types of imported pet foods contain little or not grain, but are
still assessed the variable duty rate. FAS/Bogota worked for more than
three years to have wet pet food removed from the Andean Price Band
System. Wet pet food is currently assessed a 20 percent import duty as a
canned processed product.

**Rice**

Colombia has a thriving rice sector; however, periodic shortfalls create
demand for imported rice. Currently, U.S. paddy rice must pay an 80
percent import duty established by decree 3724 of 12/19/03. Colombia
also maintains restrictions on rice imports from other members of the
Andean Pact. In 2005, the Colombian government set aside a quota of
75,118 tons (dry paddy equivalent) for rice imports under the WTO. The
quantity remains unchanged for the current year, but it has not been
allocated to the different importers (the in-quota duty is over 70
percent). When the Colombian government does allow imports from outside
the Andean region, the main issue is whether it will allow imports of
milled or paddy rice. The local rice milling industry generally lobbies
for imports of U.S. paddy rice, as opposed to the milled rice imports
from Thailand that have taken place in the recent past. The GOC has
applied a safe guard-clause to rice imports from the Andean Community on
the basis that domestic rice prices have been depressed by the entry of
rice from that origin.

**Soybeans**

The domestic value‑added tax was extended in 1999 to imports of oilseed
meals, currently 16 percent, but not to soybeans. This tax reduced
imports of meal but increased imports of soybeans since 1999, while
soybean meal imports declined. In 2004 and 2005, imports of soybeans and
soybean meal rose sharply because of the increasing demand of the feed
industry and the extended used of full-fat soybeans by the animal
industry. The variable levy on soybeans and soybean products were capped
at 40 percent by decree 2650 of December 1999. However, the annual
change in the ceiling and floor prices of the Andean Community price
band resulted in a 15 percent duty currently applied, which is by far
lower than the cap.

**Whey/Cheese/Milk**

Under the Andean Community price band system, whey and cheese are
considered to be linked products of milk powder and are assessed the
same variable duty. The change in the ceiling and floor prices along
with the higher reference price set by the Andean Community set the
variable duty for milk and derivatives at around 17 percent. The
discretionary import license status for commodities under HS 0402 was
periodically renewed by 6-months periods until December 22, 2004, when
it was replaced by a 50% import duty (decrees 4364 and 4432 of December
22 and 31, 2004, respectively).

**Processed Food Products**

In general, processed food products are levied a 20 percent ad-valorem
import duty. The registration process is being revised by INVIMA in
order to make it easier and faster. An electronic registration process
is being gradually introduced. FAS/Bogota has been working with INVIMA
in the clarification of some supporting documents for registration,
mainly the so-called \"free sale certificate\". While INVIMA has made
progress on improving the registration process, the cost (between \$609
and \$1,277 per registration) and the difficulty in getting some of the
needed documents from U.S. exporters not used to some of these
requirements present a barrier to increased exports of processed
products. (Additional detailed information is included in the Fairs
Report)

## B. Description of Individual Trade Barriers

### 1. Andean Community Barriers

#### a. Variable Duties Under the Price Band System

In addition to the basic duty (15 and 20 percent for agricultural
products), the Andean Community assesses a variable surcharge on certain
agricultural products. Colombia and the other Andean Community countries
adopted the price band system in 1995. This system is applied to 13
basic or marker commodities (white rice, malting barley, yellow corn,
white corn, sorghum, soybeans, wheat, crude palm oil, crude soybean oil,
sugar, powdered milk, chicken pieces, and pork) and additional
commodities considered substitutes or derived products. The price band
system was extended in 1998 to include whole turkeys, when the variable
duty was added to the basic 20 percent duty, which took effect in August
1999. The last product inclusion into the price band occurred on April
2001 when the Andean community allowed the GOC to levy a variable duty
on seasoned poultry parts.

The variable surcharge calculation is based upon adjusted floor,
ceiling, and reference price levels determined by the Andean Community
Board of Directors. The Andean Community revises ceiling and floor
prices in April each year and adjusts the reference prices every 2
weeks.

If the applicable reference price falls within the floor and ceiling
price band, the import duty is calculated using the common external
tariff rate for the Andean Community applied to the reference price.
When the reference price falls below the floor price, a variable levy or
surcharge based upon the difference between the floor price and the
reference price is assessed (i.e., the final duty is the sum of the
basic duty on the reference price plus the basic duty on the difference
between reference and floor prices *plus* the difference between
reference and floor prices). Conversely, when the reference price
exceeds the ceiling price, a reduction is made to the applied duty based
upon the difference between the reference and the ceiling price (i.e.,
the final duty is the difference of the basic duty on the reference
price minus the basic duty on the difference between reference and
ceiling prices minus the difference between reference and floor prices).

The U.S. government considers the application of this system to be
inconsistent with Colombia\'s WTO obligations. It often appears that the
reference price used to calculate the import duty does not accurately
match the imported product, which results in the assessment of an
inflated surcharge. Tariffs applied under the price band system will be
eliminated under the FTA. While it is not clear how the system will be
phased out, the maximum duties under the FTA will apply to the price
band duties.

#### b. Regional Andean Community Sanitary and Phyto-sanitary Regulations

The Andean Community has made an effort to standardize the sanitary and
phytosanitary regulations for all member countries. In theory, this may
seem laudable; however, in practice, this has created barrier to imports
and clearly violates individual country commitments under the SPS
agreement in the WTO. Andean SPS regulations for BSE and AI have been
obstacles for Colombia adopting more flexible sanitary requirements to
reopen the beef and bovine offals market in compliance with the FTA
commitments.

### 2. Colombian Trade Barriers

#### a. Restrictive Licensing

Some poultry products require a Ministry of Agriculture approval prior
to the issuance on an import license by the Ministry of Commerce,
Industry and Tourism (MOCIT). The theory is that whenever the Ministry
of Agriculture determines that domestic supplies are available to meet
local demand and/or that imports of the subject product would
economically damage the local industry, imports are not approved.
Imports of poultry parts currently fall in this category.

#### b. Value‑Added Tax (VAT)

As a general rule, Colombia applies a VAT of 16 percent for most of the
products, 10 percent and 2 percent. There are three main categories to
clasify the products for the VAT application: Excluded, exempt and
included. Excluded products do not have to pay VAT when are imported or
sold, these are the few included in this category (meat, fish fillets,
hatching eggs, bee honey, vegetables, nuts, pulses, fresh fruits,
unprocessed cereals, and seeds). Exempt products allowed to discount the
IVA paid during the manufacturing process (i.e. when VAT is paid for raw
materials). Included are the most.

#### c. Sanitary and Phytosanitary Non-Tariff Barriers

**Poultry meat and meat products**

A regulation setting a zero tolerance for pathogens in meat products,
including chicken, which was implemented in September 1998, has been
superseded by the implantation of the HACCP system in Colombia. The
zero-pathogen regulation caused serious disruption in imports of
mechanically deboned chicken in the period 2000-2003. The HACCP
regulation, issued by the Ministry of Health (now known as Ministry of
Social Protection) in January 2002, brings the Colombia meat sanitation
law into conformance with that of most industrialized countries.
Colombia recognizes equivalency of the U.S. inspection system and has
committed to maintain this recognition under the FTA.

**Poultry Genetics**

APHIS worked with ICA to gain its recognition to the U.S. NPIP (National
Poultry Improvement Plan) that facilitates the imports of one-day
chicks, hatching eggs, and parental material.

# Meat and Meat Products Import Regulations

As part of Colombia's commitments during the negotiations of the Free
Trade Agreement (FTA) with the United States, the government of Colombia
issued Resolutions 947 and 1073 of April 17 and April 26, 2006,
respectively. The resolutions allowed the imports of deboned beef and
bovine offals, but the sanitary requirements for making effective the
importation of these products are still under discussion.

Although another Colombian commitment involved allowing the imports of
bone-in beef by May 31, 2006, the ICA resolution has not been issued and
technical arguments have been advanced for not meeting this commitment.
GOC and USG representatives have held meetings to discuss these issues
but a final solution has not been achieved as of this date.

Colombia agreed in the FTA to continue recognizing the U.S. meat
inspection system as equivalent and will not require individual plant
visits.

**Live Goats**

Although there is an interest by the Colombian cattlemen in importing
goat breeding animals from Texas, the Colombian Agricultural Institute
(ICA) refuses to issue an import permit with the argument of the
presence of scrapies in the United States. APHIS is proposing that ICA
reach an agreement on this matter through a sanitary protocol.

APHIS has submitted a supported petition to Colombia to allow imports
from areas free of scrapie, but supposedly a final decision is pending
on a risk analysis carried out by ICA. This analysis has not been done
yet. There are U.S. farms certified as free of scrapie under the U.S.
Scrapie Voluntary Eradication Program (SVEP). The Andean Community
allows imports of goats from scrapie free areas.

**Bovine Semen and Embryos**

APHIS worked with ICA to gain recognition to the United States CSS
(Certified Semen Services) that also facilitates imports of U.S. bovine
semen from the farms under sanitary supervision of the above system. The
Andean Community approved the imports of U.S. embryos after accepting
the OIE recommendation for free trade of bovine semen and embryos as
materials that do not represent a risk for BSE propagation in 2005.

**Pet Food**

Few U.S. pet food exporters participate in the Colombian market.
FAS/Bogota worked with ICA to gain recognition of the U.S. pet food
sanitary standards applied by the producers and the regulations
regarding the raw materials used. However, the plants must be registered
with ICA in order to issue a sanitary import permit. ICA needs to know
which official agency, either at federal or state level, does the
sanitary supervision of the pet food production and the plant control
number for that purpose. This information facilitates the pet food plant
registration. The pet food issue was a controversial one in the past,
but a visit to the US Pet Food Institute in June 2005 has rendered good
results and imports are arriving without problems.

**Meals Used in Feed**

Due to the BSE case in Canada, Colombia has banned imports of meals of
bovine/ovine/caprine origin. However, Colombia has accepted the
declaration in the import sanitary certificate that products do not
contain materials of animal origin.

**Live Bovine and Horses**

For both live bovine and equine animals, ICA has established the
requirement of registering the producing/exporting farms, but this
procedure has been facilitated by the recognition of the U.S. sanitary
systems for live animals and products. Since December 2003, imports of
live bovines and cattle products have been banned as a result of the US
detection of BSE cases. Also, in the case of horses, a negative result
to equine viral enteritis is required which causes problems since
vaccinated horses always show positive in the analysis. As a result of
this situation, U.S. horse exporters are not vaccinating the animals for
the Colombian market. This is a sanitary risk for both countries.

**Dairy Products**

FAS/Bogota has obtained recognition by ICA of the U.S. sanitary
standards applied to dairy products. However, the exporting dairy plants
must be registered at ICA by submitting the sanitary control number for
each plant and the official agency in charge of the sanitary
supervision.

**Irradiation of Commodities**

Although Colombia welcomes the technology of irradiation to control
fruit pests, it has not yet accepted the use of this method for
controlling pests in imported commodities and food products

# 

# Labeling for Food Raw Materials

Resolution 2652 of August 4, 2004 established labeling requirements for
packaged food products and raw materials for food products. A new
resolution (00485 of february 25, 2005) modified the previous one. Both
ICA and Invima have been particularly demanding in requesting that
imported products meet the labeling information requested by these
resolutions. Labels on the raw materials packages or containers must
carry at least the following information:

1\. (Product) name.

2\. Ingredient list.

3\. Net content.

1.  Producer or importer name and address.

2.  Origin country.

3.  Lot identification.

4.  Expiration date.

5.  (Product) conservation instructions.

The application of this regulation did not implied major disruptions to
trade.

**Labeling for Radiated Food Products**. The label of any food product
that has been subject to ionizing radiations must carry a written
declaration indicating the treatment near the product name. This
requirement is one among those issued on this matter. The use of the
international symbol indicating that the product has been radiated is
discretional. However, whenever it is used it has to be noticeable just
after the product name. When a radiated product is used as an ingredient
for another product, this circumstance must be declared in the list of
ingredients.

The product label must contain a declaration on the (radiation)
treatment when a product using only ingredient is prepared with radiated
raw material.

**Biotechnology.** ICA Resolution 1063 of March 22, 2005 establishes the
obligation of registration of individuals and organizations introducing
biotech materials of interest to the livestock industry for research and
trials. Biotech regulations have not been a problem for imports of bulk
commodities.

**Labeling for Radiated Food Products or Products Obtained by Techniques
of Genetic Modification or Genetic Engineering.** Radiated food products
or subject to ionizing radiations or those obtained through some
techniques of genetic modifications or engineering must comply with the
specific labeling requirements established by the national government.

# Section IV. REFERENCE MATERIAL

## Appendix A 

**Colombia: Illustrative List of Basic Import Tariffs for Agricultural
Products**

**(Note: Does not include applicable Andean Community variable duties)**

+---------------+---------------------------------------------+--------+
| **HS          | **Product**                                 | **B    |
| Chapter**     |                                             | asic** |
|               |                                             |        |
|               |                                             | **Ta   |
|               |                                             | riff** |
|               |                                             |        |
|               |                                             | *      |
|               |                                             | *(%)** |
+---------------+---------------------------------------------+--------+
| Chapter 1     | Purebred animals                            | 5      |
+---------------+---------------------------------------------+--------+
|               | Non-purebred animals                        | 10     |
+---------------+---------------------------------------------+--------+
| Chapter 2     | Meats ***[1]{.underline}/***                | ***20  |
|               |                                             | -80*** |
+---------------+---------------------------------------------+--------+
| Chapter 4     | Eggs-for hatching & vaccine production      | 5      |
+---------------+---------------------------------------------+--------+
|               | Milk-fluid                                  | 15     |
+---------------+---------------------------------------------+--------+
|               | Milk-powdered, eggs-consumption, and honey  | 20     |
+---------------+---------------------------------------------+--------+
| Chapter 5     | Animal semen & embryos, and silk worm eggs  | 5      |
+---------------+---------------------------------------------+--------+
|               | Animal products not included in previous    | ***10  |
|               | chapters ***[1]{.underline}/***             | -70*** |
+---------------+---------------------------------------------+--------+
| Chapter 6     | Live plants & flowers                       | 5      |
+---------------+---------------------------------------------+--------+
|               | Foliage                                     | 10     |
+---------------+---------------------------------------------+--------+
| Chapter 7     | Vegetables-for planting                     | 5      |
+---------------+---------------------------------------------+--------+
|               | Vegetables-for consumption                  | ***15  |
|               | ***[2]{.underline}***/                      | -60*** |
+---------------+---------------------------------------------+--------+
| Chapter 8     | Fruits                                      | 15     |
+---------------+---------------------------------------------+--------+
| Chapter 9     | Raw coffee, tea & spices                    | 10     |
+---------------+---------------------------------------------+--------+
|               | Coffee-raw & decaffeinated, or toasted; and | 15     |
|               | processed tea or spices                     |        |
+---------------+---------------------------------------------+--------+
|               | Coffee-toasted, ground, decaffeinated and   | 20     |
|               | processed tea                               |        |
+---------------+---------------------------------------------+--------+
| Chapter 10    | Seeds                                       | 5      |
+---------------+---------------------------------------------+--------+
|               | Grains-consumption **[3]{.underline}*/***   | 15     |
+---------------+---------------------------------------------+--------+
|               | Rice-milled, polished, or broken            | 20     |
|               | ***[4]{.underline}/***                      |        |
+---------------+---------------------------------------------+--------+
| Chapter 11    | Barley malt                                 | 15     |
+---------------+---------------------------------------------+--------+
|               | Grain flours                                | 20     |
+---------------+---------------------------------------------+--------+
| Chapter 12    | Planting oilseeds                           | 5      |
+---------------+---------------------------------------------+--------+
|               | Plants for medicine/industry                | 10     |
+---------------+---------------------------------------------+--------+
|               | Oilseeds-consumption                        | 15     |
+---------------+---------------------------------------------+--------+
| Chapter 15    | Animals fats & oils                         | 15     |
+---------------+---------------------------------------------+--------+
|               | Vegetable fats & oils                       | 20     |
+---------------+---------------------------------------------+--------+
| Chapter 16    | Meat/fish preparations                      | 20     |
+---------------+---------------------------------------------+--------+
| Chapter 17    | Other than cane sugars & molasses           | 15     |
+---------------+---------------------------------------------+--------+
|               | Cane sugars & confectionary                 | 20     |
+---------------+---------------------------------------------+--------+
| Chapter 18    | Cocoa-raw                                   | 10     |
+---------------+---------------------------------------------+--------+
|               | Cocoa toasted beans & butter                | 15     |
+---------------+---------------------------------------------+--------+
|               | Cocoa preparations                          | 20     |
+---------------+---------------------------------------------+--------+
| Chapters 19,  | Grain & vegetable preparations, pastry,     | 20     |
| 20, 21        | soups, and ice cream                        |        |
+---------------+---------------------------------------------+--------+
| Chapter 22    | Grape must                                  | 15     |
+---------------+---------------------------------------------+--------+
|               | Beer & wine                                 | 20     |
+---------------+---------------------------------------------+--------+
| Chapter 23    | Vegetable meals & animal feed               | 15     |
+---------------+---------------------------------------------+--------+
|               | Pet food                                    | 20     |
+---------------+---------------------------------------------+--------+
| Chapter 24    | Tobacco-raw                                 | 15     |
+---------------+---------------------------------------------+--------+
|               | Cigarettes, cigars, and other manufactured  | 20     |
|               | tobacco products                            |        |
+---------------+---------------------------------------------+--------+
| Chapter 41    | Raw hides/skins                             | 5      |
+---------------+---------------------------------------------+--------+
|               | Leather                                     | 10     |
+---------------+---------------------------------------------+--------+
|               | Chamois & patent leather                    | 15     |
+---------------+---------------------------------------------+--------+
| Chapter 50    | Raw silk                                    | 5      |
+---------------+---------------------------------------------+--------+
|               | Silk waste                                  | 20     |
+---------------+---------------------------------------------+--------+
| Chapter 51    | Wool & hair                                 | 10     |
+---------------+---------------------------------------------+--------+
| Chapter 52    | Cotton                                      | 10     |
+---------------+---------------------------------------------+--------+
|               | Fabric & yarn-less than 85% cotton          | 15     |
+---------------+---------------------------------------------+--------+
|               | Fabric & yarn-over 85% cotton               | 20     |
+---------------+---------------------------------------------+--------+
| Chapter 53    | Other vegetable fibers                      | 10     |
+---------------+---------------------------------------------+--------+

Source: Colombia Harmonized Tariff Schedule (Arancel de Aduanas).

[1]{.underline}/ On December 19, 2003, the GOC increased the basic duty
for bovine meat from 20 to 80 percent and established a TRQ of 3,000
tons/year. Decree 1140 of April 14, 2005, established TRQ's for 3,800
tons of bovine meat and 4,000 tons for bovine offals. Decree 3744 of
October 21, 2005, established TRQ's for 3,800 tons of bovine meat and
3,200 tons for bovine offals.

[2/]{.underline} Decree 3723 of 2003 established a 60% import duty for
dry beans.

[3]{.underline}/ Grains for consumption are levied a variable surcharge
under the Andean Price Band system.

[4]{.underline}/ Decree 3724 of 12/19/03 established an out-of-TRQ
import duty of 80% on milled rice. The TRQ is equivalent to 75,118
tons/year. Decree 4338 of 12/22/04 broke down the HS position 10.06.30
into 10.06.30.00.10 short kernel rice (sushi rice) with a 20% import
duty, and 10.06.30.00.90 (other rice) with 80% import duty.

## Appendix B 

**Colombia: Basic Duties plus Andean Community Price Band**

**Variable Duties for Agricultural Products**

(Note: Adjusted Biweekly/First half of April 2006)

+----------------+-------------------------------------------+---------+
| **HS Code**    | **Product**                               | **Basic |
|                |                                           | plus    |
|                |                                           | V       |
|                |                                           | ariable |
|                |                                           | T       |
|                |                                           | ariff** |
|                |                                           |         |
|                |                                           | **(%)** |
+----------------+-------------------------------------------+---------+
| 02.03-11.00.00 | Pork carcasses, refrigerated              | 20      |
|                |                                           |         |
| -12.00.00      | Pork parts, refrigerated                  | 20      |
|                |                                           |         |
| -19.00.00      | Pork parts, frozen                        | 20      |
|                |                                           |         |
| -21.00.00      | Pork carcasses, refrigerated              | 20      |
|                |                                           |         |
| -22.00.00      | Pork parts, other                         | 20      |
|                |                                           |         |
| -29.00.00      | Pork                                      | 20      |
|                |                                           |         |
| .07-11.00.00   | Chicken, whole birds, refrigerated        | 92      |
|                |                                           |         |
| -12.00.00      | Chicken, whole birds, frozen              | 92      |
|                |                                           |         |
| -13.00.00      | Chicken parts, refrigerated               | 209     |
|                |                                           |         |
| -14.00.00      | Chicken pieces, frozen                    | 209     |
|                |                                           |         |
| -24.00.00      | Turkey, whole birds, refrigerated         | 23      |
|                |                                           |         |
| -25.00.00      | Turkey, whole birds, frozen               | 23      |
|                |                                           |         |
| -26.00.00      | Turkey, pieces, refrigerated              | 209     |
|                |                                           |         |
| -27.00.00      | Turkey parts, frozen                      | 209     |
|                |                                           |         |
| -32.00.00      | Duck/goose, whole birds, refrigerated     | 23      |
|                |                                           |         |
| -33.00.00      | Duck/goose, whole birds, frozen           | 23      |
|                |                                           |         |
| -34.00.00      | Duck/goose fatty livers, fresh or chilled | 209     |
|                |                                           |         |
| -35.00.00      | Duck other fresh or chilled               | 209     |
|                |                                           |         |
| -36.00.00      | Duck other frozen                         | 209     |
|                |                                           |         |
| .10-12.00.00   | Bacon                                     | 20      |
|                |                                           |         |
| -19.00.00      | Pork, other                               | 20      |
+----------------+-------------------------------------------+---------+
| 04.01-10.00.00 | Milk, fluid, under one percent fat        | 15      |
|                |                                           |         |
| -20.00.00      | Milk, fluid, one to 6% fat                | 15      |
|                |                                           |         |
| -30.00.00      | Milk, fluid, over 6% fat                  | 15      |
|                |                                           |         |
| .02-10.10.00   | Milk, powdered, \< 1.5% fat, in           | 50      |
|                | containers \< 2.5 k. Milk, powdered, \<   |         |
| 90.00          | 1.5% fat, in containers \> 2.5 k.         | 50      |
|                |                                           |         |
| 21.11.00       | Milk, powdered, \> 1.5% fat, in           | 50      |
|                | containers \< 2.5 k.                      |         |
| .19.00         |                                           | 50      |
|                | Milk, powdered                            |         |
| .91.00         |                                           | 50      |
|                | Milk, powdered, \> 26% fat, in containers |         |
| .99.00         | \< 2.5 k.                                 | 50      |
|                |                                           |         |
| .-29.11.00     | Milk, powdered, over 26% fat, other       | 50      |
|                |                                           |         |
| .19.00         | Milk, powdered, \> 26% fat, in containers | 50      |
|                | \< 2.5 k.                                 |         |
| .91.00         |                                           | 50      |
|                | Milk, powdered, over 26% fat, other       |         |
| .99.00         |                                           | 50      |
|                | Milk, powdered, other, in containers \<   |         |
| -91.10.00      | 2.5 kilos                                 | 50      |
|                |                                           |         |
| .90.00         | Milk, powdered, other                     | 50      |
|                |                                           |         |
| .99.90.00      | Milk, powdered, other                     | 50      |
|                |                                           |         |
| .04-10.90.00   | Milk, powdered, other                     | 20      |
|                |                                           |         |
| -90.00.00      | Milk, powdered, other                     | 20      |
|                |                                           |         |
| .05-10.00.00   | Whey, concentrated                        | 20      |
|                |                                           |         |
| -20.00.00      | Whey, other                               | 20      |
|                |                                           |         |
| -90.20.00      | Butter                                    | 20      |
|                |                                           |         |
| .90.00         | Dairy spreads                             | 20      |
|                |                                           |         |
| .06-30.00.00   | Dairy spreads, other                      | 20      |
|                |                                           |         |
| -90.10.00      | Dairy spreads, other                      | 20      |
|                |                                           |         |
| .20.00         | Cheese, melted                            | 20      |
|                |                                           |         |
| .30.00         | Cheese, under 50% moisture                | 20      |
|                |                                           |         |
| .90.00         | Cheese, 50% - 56% moisture                | 20      |
|                |                                           |         |
|                | Cheese, 56% - 69% moisture                |         |
|                |                                           |         |
|                | Cheese, other                             |         |
+----------------+-------------------------------------------+---------+
| 10.01-10.90.00 | Wheat , durum [1]{.underline}/            | 5       |
|                |                                           |         |
| -90.20.10      | Wheat , feed [1]{.underline}/             | 5       |
|                |                                           |         |
| .90            | Wheat , other [1]{.underline}/            | 5       |
|                |                                           |         |
| .30.00         | Wheat, red                                | 5       |
|                |                                           |         |
| 03-00.90.00    | Barley                                    | 15      |
|                |                                           |         |
| 05-90.11.00    | Corn, yellow                              | 20      |
|                |                                           |         |
| 12.00          | Corn, white                               | 45      |
|                |                                           |         |
| .90.10         | Corn, white                               | 20      |
|                |                                           |         |
| .90            | Corn, white                               | 20      |
|                |                                           |         |
| 06-30.00.90    | Rice, other milled                        | 80      |
|                |                                           |         |
| -10.90.00      | Rice, paddy                               | 80      |
|                |                                           |         |
| -20.00.00      | Rice, brown                               | 80      |
|                |                                           |         |
| -40.00.00      | Rice, broken                              | 80      |
|                |                                           |         |
| 07-00.90.00    | Sorghum [2]{.underline}/                  | 20      |
+----------------+-------------------------------------------+---------+
| 11.01-00.00.00 | Wheat flour                               | 10      |
|                |                                           |         |
| .02-20.00.00   | Corn meal                                 | 20      |
|                |                                           |         |
| .03-11.00.00   | Semola, wheat                             | 10      |
|                |                                           |         |
| .07-10.00.00   | Malt, barley                              | 15      |
|                |                                           |         |
| -20.00.00      | Malt, barley (roasted)                    | 15      |
|                |                                           |         |
| .08-11.00.00   | Starch, wheat                             | 10      |
|                |                                           |         |
| -12.00.00      | Starch, corn                              | 23      |
|                |                                           |         |
| -19.00.00      | Starch, other                             | 23      |
+----------------+-------------------------------------------+---------+
| 12.01-00.90.00 | Soybeans 3/                               | 15      |
|                |                                           |         |
| .02-10.90.00   | Peanuts, with shell 3/                    | 15      |
|                |                                           |         |
| -20.00.00      | Peanuts, shelled 3/                       | 15      |
|                |                                           |         |
| .05-90.90.00   | Rapeseed 3/                               | 15      |
|                |                                           |         |
| .06-00.90.00   | Sunflower seed 3/                         | 15      |
|                |                                           |         |
| .07-40.90.00   | Sesame seed 3/                            | 15      |
|                |                                           |         |
| -99.90.00      | Other oilseeds 3/                         | 15      |
|                |                                           |         |
| .08-10.00.00   | Soybeans 3/                               | 15      |
|                |                                           |         |
| -90.00.00      | Other oilseeds 3/                         | 15      |
+----------------+-------------------------------------------+---------+
| 15.01-00.10.00 | Lard                                      | 15      |
|                |                                           |         |
| .30.00         | Poultry grease                            | 15      |
|                |                                           |         |
| .02-00.11.00   | Tallow, denatured                         | 15      |
|                |                                           |         |
| .19.00         | Tallow, other                             | 15      |
|                |                                           |         |
| .90.00         | Tallow, other                             | 15      |
|                |                                           |         |
| .03-00.00.00   | Stearin                                   | 15      |
|                |                                           |         |
| .06-00.10.00   | Other animal fats                         | 15      |
|                |                                           |         |
| .90.00         | Other animal fats                         | 15      |
|                |                                           |         |
| .07-10.00.00   | Soybean oil, raw 3/                       | 20      |
|                |                                           |         |
| -90.00.10      | Soybean oil, denatured 3/                 | 20      |
|                |                                           |         |
| .90            | Soybean oil, other 3/                     | 20      |
|                |                                           |         |
| .08-10.00.00   | Peanut oil, raw 3/                        | 20      |
|                |                                           |         |
| -90.00.00      | Peanut oil, other 3/                      | 20      |
|                |                                           |         |
| 11-10.00.00    | Palm oil, raw 3/                          | 20      |
|                |                                           |         |
| -90.00.00      | Palm oil, other 3/                        | 20      |
|                |                                           |         |
| .12-11.00.00   | Sunflower oil, raw 3/                     | 20      |
|                |                                           |         |
| -19.00.00      | Sunflower oil, other 3/                   | 20      |
|                |                                           |         |
| -21.00.00      | Cottonseed oil, raw 3/                    | 20      |
|                |                                           |         |
| -29.00.00      | Cottonseed oil, other 3/                  | 20      |
|                |                                           |         |
| .13-11.00.00   | Coconut oil, raw 3/                       | 20      |
|                |                                           |         |
| -19.00.00      | Coconut oil, other 3/                     | 20      |
|                |                                           |         |
| -21.10.00      | Palm kernel oil, raw 3/                   | 20      |
|                |                                           |         |
| -29.10.00      | Palm kernel oil, other 3/                 | 20      |
|                |                                           |         |
| .14-11.00.00   | Rapeseed oil, raw 3/                      | 20      |
|                |                                           |         |
| -19.00.00      | Rapeseed oil, other 3/                    | 20      |
|                |                                           |         |
| -91.00.00      | Other oil, raw 3/                         | 20      |
|                |                                           |         |
| -99.00.00      | Other oil other 3/                        | 20      |
|                |                                           |         |
| .15-21.00.00   | Corn oil, raw 3/                          | 20      |
|                |                                           |         |
| -29.00.00      | Corn oil, other 3/                        | 20      |
|                |                                           |         |
| -30.00.00      | Castor oil 3/                             | 20      |
|                |                                           |         |
| -50.00.00      | Sesame oil 3/                             | 20      |
|                |                                           |         |
| -90.00.00      | Other seed oils 3/                        | 20      |
|                |                                           |         |
| .16-20.00.00   | Other fats and oils 3/                    | 20      |
|                |                                           |         |
| .17-10.00.00   | Margarine 3/                              | 20      |
|                |                                           |         |
| -90.00.00      | Margarine, other 3/                       | 20      |
|                |                                           |         |
| .18-00.10.00   | Linoxine 3/                               | 20      |
|                |                                           |         |
| .90.00         | Other fats and oils 3/                    | 20      |
+----------------+-------------------------------------------+---------+
| 16.01-00.00.00 | Sausages                                  | 20      |
|                |                                           |         |
| .02-41.00.00   | Hams                                      | 20      |
|                |                                           |         |
| -42.00.00      | Pork parts                                | 20      |
|                |                                           |         |
| 16.02-31.10.00 | Seasoned turkey pieces, frozen            | 70      |
|                |                                           |         |
| -32.10.00      | Seasoned chicken pieces, frozen           | 70      |
|                |                                           |         |
| -39.10.00      | Seasoned poultry pieces, frozen           | 70      |
+----------------+-------------------------------------------+---------+
| 17.01-11.90.00 | Sugar, cane, raw                          | 0       |
|                |                                           |         |
| -12.00.00      | Sugar, beets                              | 0       |
|                |                                           |         |
| -91.00.00      | Sugar, with flavoring and/or dying        | 0       |
|                |                                           |         |
| -99.90.00      | Sugar, white                              | 0       |
|                |                                           |         |
| .02-30.20.00   | Glucose, syrup                            | 0       |
|                |                                           |         |
| .90.00         | Glucose, other                            | 0       |
|                |                                           |         |
| -40.10.00      | Glucose                                   | 0       |
|                |                                           |         |
| .20.00         | Glucose, syrup                            | 0       |
|                |                                           |         |
| -60.00.00      | Fructose                                  | 0       |
|                |                                           |         |
| -90.20.00      | Sugar and molasses, caramel               | 0       |
|                |                                           |         |
| .30.00         | Sugars, with flavoring and/or dying       | 0       |
|                |                                           |         |
| .40.00         | Syrups                                    | 0       |
|                |                                           |         |
| .90.00         | Sugars, other                             | 0       |
|                |                                           |         |
| .03-10.00.00   | Molasses, cane                            | 0       |
|                |                                           |         |
| -90.00.00      | Molasses, other                           | 0       |
+----------------+-------------------------------------------+---------+
| 19.02-19.00.00 | Pasta                                     | 10      |
+----------------+-------------------------------------------+---------+
| 23.01-20.10.00 | Fish meal 3/                              | 15      |
|                |                                           |         |
| .02-10.00.00   | Corn gluten 3/                            | 20      |
|                |                                           |         |
| -30.00.00      | Bran, wheat 3/                            | 20      |
|                |                                           |         |
| -40.00.00      | Bran, other grains 3/                     | 20      |
|                |                                           |         |
| .04-00.00.00   | Meal, soybean 3/                          | 15      |
|                |                                           |         |
| .06-10.00.00   | Meal, cottonseed 3/                       | 15      |
|                |                                           |         |
| -30.00.00      | Meal, sunflower 3/                        | 15      |
|                |                                           |         |
| -70.00.00      | Meal, corn germ 3/                        | 15      |
|                |                                           |         |
| -90.00.00      | Meal, other oilseeds 3/                   | 15      |
|                |                                           |         |
| .08-00.90.00   | Feed ingredients                          | 20      |
|                |                                           |         |
| .09.10.90.00   | Other Pet food                            | 20      |
|                |                                           |         |
| -90.10.00      | Feed                                      | 20      |
|                |                                           |         |
| .90.00         | Feed premixes                             | 20      |
+----------------+-------------------------------------------+---------+
| 35.05-10.00.00 | Dextrine and other starches               | 23      |
|                |                                           |         |
| -20.00.00      | Glue                                      | 23      |
+----------------+-------------------------------------------+---------+
| 38.23-11.00.00 | Stearic acid 3/                           | 15      |
|                |                                           |         |
| -12.00.00      | Oleic acid 3/                             | 15      |
|                |                                           |         |
| -19.00.00      | Other fatty acids 3/                      | 15      |
+----------------+-------------------------------------------+---------+

[1]{.underline}/ Tariff is limited to 35 percent of reference price
(decree 1754).

2/ Linked to the yellow corn band (AC decisions 371, 402, 403, 410, 411,
413, 430, 468, and 470; and resolution 169).

3/ Tariff is limited to 40 percent of reference price (decree 2650,
December 1999).

Source: Colombia Harmonized Tariff Schedule (Arancel de Aduanas).

Appendix C

**Colombia: Basic plus Andean Community Price Band Variable Duties**

**for Marker and Substitute/Derivative Products**

(Note: Adjusted Biweekly/First half of April 2006)

+---------------------+---------------------+---------+------+--------+
| **HS Code**         | **Product**         | **Re    | **B  | *      |
|                     |                     | ference | asic | *Basic |
|                     |                     | Price** | Ta   | plus   |
|                     |                     |         | riff | Va     |
|                     |                     | **(     | (    | riable |
|                     |                     | \$/Ton) | %)** | Tariff |
|                     |                     | \***    |      | (%)**  |
+---------------------+---------------------+---------+------+--------+
| 02.03-29.00.00      | **Pork** 1/         | 1,484   | 20   | 20     |
|                     |                     |         |      |        |
| .10-12              | Bacon               |         | 20   | 20     |
|                     |                     |         |      |        |
| -19                 | Other pork          |         | 20   | 20     |
|                     |                     |         |      |        |
| 16.01-              | Sausages            |         | 20   | 20     |
|                     |                     |         |      |        |
| .02-41              | Ham                 |         | 20   | 20     |
|                     |                     |         |      |        |
| -42.                | Pork shoulders      |         | 20   | 20     |
+---------------------+---------------------+---------+------+--------+
| 02.07-14.00.00      | **Chicken parts,    | 1,512   | 20   | 209    |
|                     | frozen**            |         |      |        |
| -13                 |                     |         | 20   | 209    |
|                     | Chicken parts,      |         |      |        |
| -26/-27             | refrigerated        |         | 20   | 209    |
|                     |                     |         |      |        |
| -34/-35             | Turkey parts        |         | 20   | 209    |
|                     |                     |         |      |        |
| -36                 | Duck, geese, and    |         | 20   | 209    |
|                     | Cornish             |         |      |        |
| 16.02-31.00.10      |                     |         | 20   | 70     |
|                     | Other poultry parts |         |      |        |
| -32.00.10           |                     |         | 20   | 70     |
|                     | Seasoned turkey     |         |      |        |
| -39.00.10           | parts               |         | 20   | 70     |
|                     |                     |         |      |        |
|                     | Seasoned Chicken    |         |      |        |
|                     | parts               |         |      |        |
|                     |                     |         |      |        |
|                     | Seasoned others     |         |      |        |
+---------------------+---------------------+---------+------+--------+
| 04.02-21.19.00      | **Milk-powdered,    | 2,347   | 50   | 50     |
|                     | whole**             |         |      |        |
| .01-10/-20/-30.     |                     | 3,013   | 15   | 15     |
|                     | Milk, fluid         |         |      |        |
| .02-10.10/.90./     |                     | 3,519   | 50   | 50     |
|                     | Milk-powdered       |         |      |        |
| -21.11/.91./.99./   |                     |         | 20   | 20     |
|                     | Whey                |         |      |        |
| -29.11 /.19./.91./  |                     |         | 20   | 20     |
|                     | Butter              |         |      |        |
| .99./-91.10/        |                     |         | 20   | 20     |
|                     | Cheese, melted      |         |      |        |
| .90./-99.90.        |                     |         | 20   | 20     |
|                     | Cheese, other       |         |      |        |
| 04.04-10.90/-90.    |                     |         |      |        |
|                     |                     |         |      |        |
| 04.0                |                     |         |      |        |
| 5-10/-20/-90.10/.90 |                     |         |      |        |
|                     |                     |         |      |        |
| 04.06-30.           |                     |         |      |        |
|                     |                     |         |      |        |
| -90.10/.20./.30./   |                     |         |      |        |
|                     |                     |         |      |        |
| .90.                |                     |         |      |        |
+---------------------+---------------------+---------+------+--------+
| 10.01-10.90.00      | **Wheat** 2/        | 209     | 15   | 5      |
|                     |                     |         |      |        |
| -90.20.10           | Feed wheat 2/       | 182     | 15   | 5      |
|                     |                     |         |      |        |
| 20.90               | Wheat, hard, for    | 285     | 15   | 5      |
|                     | consumption 2/      |         |      |        |
| .30.                |                     |         | 15   | 5      |
|                     | Wheat, red          |         |      |        |
| 11.01-00.           |                     |         | 20   | 10     |
|                     | Wheat flour         |         |      |        |
| .03-11.             |                     |         | 20   | 10     |
|                     | Groats and semola   |         |      |        |
| .08-11.             |                     |         | 20   | 10     |
|                     | Starch, wheat       |         |      |        |
| 19.02-19.           |                     |         | 20   | 10     |
|                     | Pasta               |         |      |        |
+---------------------+---------------------+---------+------+--------+
| 10.03-00.90.00      | **Barley**          | 147     | 15   | 15     |
|                     |                     |         |      |        |
| 11.07-10/-20.       | Barley malt         |         | 15   | 15     |
+---------------------+---------------------+---------+------+--------+
| 10.05-90.11.00      | **Corn-yellow,      | 125     | 15   | 20     |
|                     | hard**              |         |      |        |
| 02.07-11/-12        |                     | 1,712   | 20   | 23     |
|                     | Chicken, whole      |         |      |        |
| -24/-25             |                     | 1,712   | 20   | 23     |
|                     | Turkey, whole       |         |      |        |
| -32/-33             |                     | 1,512   | 20   | 23     |
|                     | Duck, geese &       |         |      |        |
| 10.05-90.90.10/.90. | Cornish hen,        | 126     | 15   | 20     |
|                     | chilled, frozen     |         |      |        |
| .07-00.90           |                     |         | 15   | 20     |
|                     | Corn-white, soft    |         |      |        |
| 11.08-12/-19        |                     |         | 20   | 23     |
|                     | Sorghum 3/          |         |      |        |
| 17.02-30.20./.90./  |                     |         | 20   | 23     |
|                     | Starch, corn and    |         |      |        |
| -40.10./.20         | other               |         | 20   | 23     |
|                     |                     |         |      |        |
| 23.02-10/.30./.40   | Bran, corn, wheat,  |         | 15   | 20     |
|                     | other               |         |      |        |
| .08-00.90.00        |                     |         | 15   | 20     |
|                     | Feed                |         |      |        |
| .09-10.90.00        |                     |         | 20   | 20     |
|                     | Grain middlings     |         |      |        |
| -90.10./.90         |                     |         | 15   | 20     |
|                     | Screenings          |         |      |        |
| 35.05-10./.20       |                     |         | 20   | 23     |
|                     | Pet food, other     |         |      |        |
|                     |                     |         |      |        |
|                     | Other feeds         |         |      |        |
|                     |                     |         |      |        |
|                     | Dextrine and other  |         |      |        |
|                     | starches            |         |      |        |
+---------------------+---------------------+---------+------+--------+
| 10.05-90.12.00      | **Corn-white**      | 141     | 15   | 45     |
|                     |                     |         |      |        |
| 11.02-20            | Corn meal           |         | 20   | 20     |
+---------------------+---------------------+---------+------+--------+
| 10.06-30.00.00      | **Rice-milled**     | 344     | 80   | 80     |
|                     |                     |         |      |        |
| 10.06-10.90         | Rice-paddy          | 204     | 80   | 80     |
|                     |                     |         |      |        |
| -20./-40            | Rice-milled/broken  |         | 80   | 80     |
+---------------------+---------------------+---------+------+--------+
| 12.01-00.90.00      | **Soybean** 4/      | 251     | 15   | 15     |
|                     |                     |         |      |        |
| 12.02-10.90./-20    | Peanuts-consumption | 293     | 15   | 15     |
|                     | 4/                  |         |      |        |
| .05-90.90           |                     | 271     | 15   | 15     |
|                     | Rapeseed 4/         |         |      |        |
| .06-00.90           |                     | 228     | 15   | 15     |
|                     | Sunflower seed 4/   |         |      |        |
| .07-40.90           |                     | 228     | 15   | 15     |
|                     | Sesame seed 4/      |         |      |        |
| .07-99.90           |                     |         | 15   | 15     |
|                     | Other oilseeds 4/   |         |      |        |
| .08-10              |                     |         | 15   | 15     |
|                     | Soybean flour 4/    |         |      |        |
| -90                 |                     |         | 15   | 15     |
|                     | Other oilseeds      |         |      |        |
| 23.01-20.10         | flours 4/           |         | 15   | 15     |
|                     |                     |         |      |        |
| .04-                | Fish meal 4/        |         | 15   | 15     |
|                     |                     |         |      |        |
| .06-10              | Soybean meal 4/     |         | 15   | 15     |
|                     |                     |         |      |        |
| -30                 | Cottonseed meal 4/  |         | 15   | 15     |
|                     |                     |         |      |        |
| -70                 | Sunflower meal 4/   |         | 15   | 15     |
|                     |                     |         |      |        |
| -90                 | Corn gluten 4/      |         | 15   | 15     |
|                     |                     |         |      |        |
|                     | Other oilseed meals |         |      |        |
|                     | 4/                  |         |      |        |
+---------------------+---------------------+---------+------+--------+
| 15.07-10.00.00      | **Soybean oil,      | 501     | 20   | 20     |
|                     | raw** 4/            |         |      |        |
| -90.00.10           |                     | 539     | 20   | 20     |
|                     | Soybean oil,        |         |      |        |
| .90                 | refined 4/          | 1,022   | 20   | 20     |
|                     |                     |         |      |        |
| .08-10              | Soybean oil, ref.,  | 551     | 20   | 20     |
|                     | den.                |         |      |        |
| -90                 |                     | 892     | 20   | 20     |
|                     | Peanut oil, raw 4/  |         |      |        |
| .12-11              |                     | 639     | 20   | 20     |
|                     | Peanut oil, refined |         |      |        |
| -19                 | 4/                  | 728     | 20   | 20     |
|                     |                     |         |      |        |
| -21                 | Sunflower oil, raw  | 763     | 20   | 20     |
|                     | 4/                  |         |      |        |
| -29                 |                     | 937     | 20   | 20     |
|                     | Sunflower oil,      |         |      |        |
| .14-11              | refined 4/          | 47      | 20   | 20     |
|                     |                     |         |      |        |
| -19                 | Cottonseed oil, raw |         | 20   | 20     |
|                     | 4/                  |         |      |        |
| -91/-99             |                     |         | 20   | 20     |
|                     | Cottonseed oil,     |         |      |        |
| .15-21              | refined 4/          |         | 20   | 20     |
|                     |                     |         |      |        |
| -29                 | Rapeseed oil, raw   |         | 20   | 20     |
|                     | 4/                  |         |      |        |
| -50                 |                     |         | 20   | 20     |
|                     | Rapeseed oil,       |         |      |        |
| -90                 | refined 4/          |         | 20   | 20     |
|                     |                     |         |      |        |
|                     | Others, raw and     |         |      |        |
|                     | refined oils        |         |      |        |
|                     |                     |         |      |        |
|                     | Corn oil, raw 4/    |         |      |        |
|                     |                     |         |      |        |
|                     | Corn oil, refined   |         |      |        |
|                     | 4/                  |         |      |        |
|                     |                     |         |      |        |
|                     | Sesame oil 4/       |         |      |        |
|                     |                     |         |      |        |
|                     | Other seed oils 4/  |         |      |        |
+---------------------+---------------------+---------+------+--------+
| 15.11-10.00.00      | **Palm oil, raw**   | 488     | 20   | 20     |
|                     | 4/                  |         |      |        |
| .01-00.10/.30       |                     | 388     | 15   | 15     |
|                     | Pork & poultry      |         |      |        |
| .02-00.11/19./90    | grease 4/           | 537     | 15   | 15     |
|                     |                     |         |      |        |
| .03-                | Tallow 4/           | 601     | 15   | 15     |
|                     |                     |         |      |        |
| .06-                | Stearin 4/          | 879     | 15   | 15     |
|                     |                     |         |      |        |
| .11-90              | Tallow, other 4/    |         | 20   | 20     |
|                     |                     |         |      |        |
| .13-11              | Palm oil, refined   |         | 20   | 20     |
|                     | 4/                  |         |      |        |
| -19                 |                     |         | 20   | 20     |
|                     | Coconut oil, raw 4/ |         |      |        |
| -21.10./29.10       |                     |         | 20   | 20     |
|                     | Coconut oil,        |         |      |        |
| .15-30              | refined 4/          |         | 20   | 20     |
|                     |                     |         |      |        |
| .16-20              | Palm kernel oil 4/  |         | 20   | 20     |
|                     |                     |         |      |        |
| .17-10/.90          | Castor oil 4/       |         | 20   | 20     |
|                     |                     |         |      |        |
| .18-00.10/.90       | Other fats/oils 4/  |         | 20   | 20     |
|                     |                     |         |      |        |
| 38.23-11/12/19      | Margarine 4/        |         | 15   | 15     |
|                     |                     |         |      |        |
|                     | Animal/veg.         |         |      |        |
|                     | fats/oils 4/        |         |      |        |
|                     |                     |         |      |        |
|                     | Fatty acids 4/      |         |      |        |
+---------------------+---------------------+---------+------+--------+
| 17.01-11.90.00      | **Sugar, raw**      | 399     | 20   | 0      |
|                     |                     |         |      |        |
| -12                 | Sugar, beet         |         | 20   | 0      |
+---------------------+---------------------+---------+------+--------+
| 17.01-99.00.00      | **Sugar, refined**  | 472     | 20   | 0      |
|                     |                     |         |      |        |
| -91                 | Sugar, flavored     |         | 20   | 0      |
|                     |                     |         |      |        |
| .02-60              | Fructose            |         | 15   | 0      |
|                     |                     |         |      |        |
| -90.20              | Caramel             |         | 20   | 0      |
|                     |                     |         |      |        |
| .30                 | Sugar, flavored     |         | 20   | 0      |
|                     |                     |         |      |        |
| .40                 | Syrup               |         | 20   | 0      |
|                     |                     |         |      |        |
| .90                 | Other sugars        |         | 10   | 0      |
|                     |                     |         |      |        |
| .03-10/.90          | Molasses            |         | 15   | 0      |
+---------------------+---------------------+---------+------+--------+

\* The basic plus the variable tariff percentage is based on the
reference price when it appears on this column; otherwise, the tariff
percentage is based on the CIF value.

1/ Marker product is in bold.

2/ Tariff is limited to 35 percent of reference price (decree 1754).

3/ Linked to the yellow corn band (AC decisions 371, 402, 403, 410, 411,
413, 430, 468, and 470; and resolution 169).

4/ Tariff is limited to 40 percent of reference price (decree 2650,
December 1999).

## Appendix D

**Colombia: Trade Barrier Catalog**

  --------------------- ---------------- --------------------------------
  **Barrier**           **Items          **Impact on U.S. Exports If
                        Affected**       Eliminated**

  **Price Band**        Corn             Up 100 percent

                        Wheat            Up 80 percent

                        Oilmeal          Up 100 percent

                        Soy oil          Up 25 percent

                        Soybeans         Up 100 percent

                        Rice             Up 20 percent

                        Fresh            Up 100 percent
                        fruit/apples     

                        Barley           No impact; will depend on prices

                        Pet food         Up 100 percent
  --------------------- ---------------- --------------------------------

## Appendix E

**Colombia: Main Ag Imports from all Sources, 2004-2005 (Million
Dollars)**

  --------------------------- ------------------- ------------- ----------
  **Item**                    **2004**            **2005**      **2005
                                                                change
                                                                from 2004
                                                                (%)**

  Corn                        326.7               323.3         -1.0

  Processed food              237.0               274.0         15.6

  Wheat                       232.9               235.4         1.0

  Soybeans                    129.0               101.0         -21.7

  Soybean meal                152.3               150.7         -1.0

  Soybean oil                 93.4                89.2          -4.5

  Cotton                      57.1                47.7          -16.5

  Fresh fruit (except apples) 34.6                43.5          25.7

  Apples                      30.3                33.2          9.6

  Tallow                      17.8                10.9          -38.8

  Barley                      36.5                41.5          13.7

  Poultry meat                12.8                9.5           -25.8

  Rice                        25.0                13.1          -47.6

  Wines                       17.8                22.6          27.0

  Pork                        3.0                 5.2           73.3

  Hides                       6.8                 8.3           22.1

  **Sub-total**               **1,323.0**         **1,409.1**   **6.5**

  **Other**                   **759.6**           **772.8**     **1.7**

  **TOTAL Ag Imports**        **2,082.6**         **2,181.9**   **4,8**
  --------------------------- ------------------- ------------- ----------

Source: DIAN (Revenue and Customs Agency).

## Appendix F

**Colombia: Main Ag Imports from the United States, 2004-2005**

(Million Dollars)

  ------------------------------ ----------------- ------------ ----------
  **Item**                       **2004**          **2005**     **2005
                                                                change
                                                                from 2004
                                                                (%)**

  Corn                           285.7             276.0        -3.4

  Processed food                 58.9              74.0         25.6

  Wheat                          135.5             154.5        14.0

  Soybean meal                   47.9              57.9         20.9

  Cotton                         49.1              45.8         -6.7

  Fresh fruit (except apples)    5.5               6.7          21.8

  Apples                         2.4               6.7          179.2

  Tallow                         11.8              8.0          -32.2

  Barley                         0                 0            0

  Soybeans                       40.6              48.0         18.2

  Poultry meat                   4.1               9.3          126.8

  Rice                           1.2               0            0

  Wines                          0.3               0.5          66.7

  Pork                           0.8               2.4          200.0

  Hides                          1.0               1.0          0

  **Sub-total**                  **644.8**         **690.8**    **7.1**

  **Other**                      **82.2**          **101.2**    **23.1**

  **TOTAL Ag Imports**           **727.0**         **792.0**    **8.9**
  ------------------------------ ----------------- ------------ ----------

Source: DIAN (Revenue and Customs Agency).

## Appendix G

**Colombia: Main Ag Exports to All Destinations, 2004-2005**

(Million Dollars)

  ------------------------------ ----------------- ------------ ----------
  **Item**                       **2004**          **2005**     **2005
                                                                change
                                                                from 2004
                                                                (%)**

  Coffee                         948.3             1,484.9      56.6

  Flowers                        686.8             893.0        30.0

  Bananas                        424.6             505.7        19.1

  Processed food                 281.6             400.1        42.1

  Sugar                          375.3             454.2        21.0

  Hides                          102.6             92.6         -9.7

  Fish and Crustaceous           123.9             143.7        16.8
  ------------------------------ ----------------- ------------ ----------

## Appendix H

**Colombia: Main Ag Exports to the United States, 2004-2005**

(Million Dollars)

  ------------------------------ --------------- --------------- ----------
  **Item**                       **2004**        **2005**        **2005
                                                                 change
                                                                 from 2004
                                                                 (%)**

  Coffee                         340.2           533.4           56.8

  Flowers                        563.6           729.9           29.5

  Bananas                        146.8           186.2           26.8

  Processed food                 109.6           149.7           36.6

  Sugar                          45.5            53.8            18.2

  Hides                          8.5             9.1             7.1

  Fish and Crustaceous           29.8            29.7            0.3
  ------------------------------ --------------- --------------- ----------

# Appendix I -- FTA Side Letter on SPS Issues

February 26, 2006

Dear Ambassador Schwab:

I have the honor to confirm the following understandings reached between
our Governments during the course of the negotiation of the United
States -- Andean Trade Promotion Agreement:

Colombia and the United States (hereinafter, the Parties) agree on the
following provisions, with a view to facilitating trade between the
Parties while preserving each Party's right to protect human, animal or
plant life or health in its territory and respecting each Party's
regulatory systems and risk assessment and policy development processes:

> 1\. Colombia confirms that it shall continue to recognize the U.S.
> inspection system for meat and poultry as equivalent to that of
> Colombia and shall not require approval of individual U.S.
> establishments by the Colombian Ministry of Agriculture or any other
> Colombian ministry or sanitary authority, in accordance with its
> rights and obligations under the WTO SPS Agreement. Colombia confirms
> that it shall continue to accept meat and poultry shipments
> accompanied by USDA Food Safety Inspection Service (FSIS) Export
> Certificates of Wholesomeness, including additional declarations
> agreed by relevant sanitary authorities from both countries.
>
> 2\. Colombia recognizes the measures taken by the United States with
> regard to Bovine Spongiform Encephalopathy (BSE). Colombia conducted a
> verification visit on December 12 - 20, 2005. Colombia confirms that,
> in accordance with the World Organization for Animal Health (OIE)
> Terrestrial Animal Health Code, it shall permit by no later than April
> 15, 2006, the importation of U.S. meat and products listed in OIE's
> Terrestrial Animal Health Code Article 2.3.13.1, in addition to
> kidneys, livers, and stomachs, accompanied by USDA Food Safety
> Inspection Service (FSIS) Export Certificates of Wholesomeness.
> Colombia shall permit the importation of other U.S. meat and meat
> products not listed in OIE's Terrestrial Animal Health Code Article
> 2.3.13.13 by no later than May 31, 2006, based on the results of the
> risk assessment being conducted in accordance with OIE's Terrestrial
> Animal Health Code.
>
> 3\. To confirm that the United States meets OIE guidelines on Avian
> Influenza, Colombian authorities conducted a verification visit to the
> United States on December 12 - 20, 2005. Based on information
> previously submitted by USDA, Colombia shall complete its
> science-based review and shall permit by no later than May 15, 2006,
> based on OIE guidelines and recommendations, the importation of U.S.
> poultry and poultry products from all U.S. States accompanied by an
> FSIS Export Certificate of Wholesomeness.

4\. The Parties pledge to urge their specialized agencies to implement
technical and scientific work dedicated to achieving market access to
make the bilateral trade of beef and beef products of mutual benefit for
both Parties.

I have the honor to confirm that this letter and your letter of
confirmation in reply shall constitute an agreement between our two
Governments, to enter into force on this day.

Sincerely,

Jorge Botero Andres Arias

Minister of Trade Minister of Agriculture