Floral

Andean Trade Promotion and Drug Eradication Act

Formerly titled the Andean Trade Preferences Act, this preference program grants Andean flowers duty-free access to the United States.

On June 28, 2007, the U.S. House of Representatives and the U.S. Senate voted and approved an eight-month extension of the Andean Trade Preferences and Drug Eradication Act (ATPDEA) for Colombia, Peru, Ecuador, and Bolivia.

As a result, duties will not be assessed on importers of record. Colombia and Peru need to complete the legislative process for negotiating Free Trade Agreements (FTAs) with the United States within the six-month period in order to be granted an additional six months for the implementation phase of the agreements.

Current U.S. tariff preferences for flowers from the Andean region are vital to the U.S. floral industry. It is estimated that over 4.2 billion flowers are imported into the United States on an annual basis with 60% of them coming from Colombia. The value of these flower imports was approximately $732 million in 2005 to support the estimated $19 billion U.S. floral retail business.

The global flower industry is an intensely competitive business with extremely thin profit margins – the estimated operating profit for most businesses is 2 to 3%. The imposition of even modest import duties would have a devastating impact on the industry. In 2002, the U.S. flower industry paid an average 7% in duties on flower imports from the Andean region due to an eight-month lapse in ATPA tariff preferences. During this period, the industry paid an estimated $2.5 million per month on flower imports from Colombia and Ecuador, raising consumer prices and jeopardizing the industry.

PMA Position and Actions

PMA supports the U.S.-Colombia and U.S.-Peru Trade Promotion Agreements and ATPDEA Renewal. Once enacted, these trade agreements will:

• “Lock in” the tariff preferences of the ATPDEA
• Benefit the $19 billion U.S. floriculture market in terms of greater availability of high-quality flowers at attractive prices for U.S. consumers

• PMA is participating in the U.S.-Chamber of Commerce Business Coalition Supporting the Colombia and Peru Free Trade Agreements
• PMA is meeting with Congress to educate key Members on the impact of raising tariffs on flower imports from the Andean regions