Guest blog by Justin Hoffmann, International Economist in the Office of Trade Policy Analysis.
Manufacturers who are looking to expand into new markets are often faced with myriad questions about tariffs and barriers to these new markets. Figuring out which products have what tariffs can be a very frustrating and time consuming process. That is why the International Trade Agency has developed a Free Trade Agreement Tariff Tool to help manufacturers quickly find the information they need.
For manufacturers, America’s Free Trade Agreement (FTA) partners can be an attractive markets because these negotiated agreements eliminate tariffs, remove non-tariff barriers, and secure non-discriminatory treatment for U.S. goods and services.
While these agreements bring many benefits for manufacturers, they can be confusing. For example, in the U.S.-Peru Trade Promotion Agreement, the tariff schedules alone for that agreement go on for nearly a thousand pages. If a manufacturer is dedicated enough to slog through the pages to find out where his specific product is in the tariff schedule, he will learn, for example, that the tariff charged on his product before the agreement went into effect is 20 percent. Additionally, after some further digging around the agreement text, the exporter would also learn that the tariff on his product “shall be removed in ten equal annual stages beginning on the date this Agreement enters into force, and such goods shall be duty-free, effective January 1 of year ten”.
It is pretty clear that these lengthy documents are crafted by trade negotiators and lawyers and are really not written for U.S. manufacturers who are simply trying to export their goods to new markets.
The good news is that the FTA Tariff Tool provides this information instantly and almost effortlessly.
The FTA Tariff Tool has three functions: 1) a searchable database to find the tariff treatment of industrial goods covered under the U.S. FTAs; 2) creates market access reports and charts across industrial sectors or product groups; and 3) creates a snapshot of current tariff and trade trends under different U.S. FTAs.
Using this tool, any manufacturer can instantly search and see the tariffs applied on his product in the FTA partner markets. For example, he can see that the 20 percent tariff Peru used to charge on his good has been reduced to 14 percent under the U.S.-Peru Trade Promotion Agreement. Next year, the tariff will drop to 12 percent and will completely disappear in 2018. The user can search various industrial sectors or product groups and see the amount of trade or products assigned to the various duty-elimination categories as negotiated under the agreement. Users can also compare the levels of market access across the U.S. FTAs. The user can obtain a snapshot of current tariff rates and trade under the various U.S. FTAs by industrial sector or HS chapter.
This information is provided free of charge and in one searchable, consolidated database. The website also contains an instructional video, quick start guide and user’s manual. There is no reason to not start today!