The US Congress has approved a free trade agreement (FTA) with Colombia but the European Commission is concerned over the biofuels percentage mix to be imposed from 1 January.
The FTA signed with the US will take at least a year to be implemented. The text of the agreement says that all vehicles with engines over three litres and 4WD (excluding SUVs) will have tariffs reduced immediately; vehicles with engines over three litres will be tariff-free within five years (except SUVs) and vehicles up to three litres and all SUVs will be gradually reduced to zero tariff within 10 years.
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Timing will start when both governments agree the final text of the FTA. It is notable that though tariffs were created to protect domestic production, no vehicle made in the US competes with a Colombian produced model.
Meanwhile, the European Commission is very worried about Colombian policy on biofuels. Five years ago the ministry of energy decreed that to reduce oil dependence, in 2012 vehicles must run on a 12% to gasoline mix or 10% biodiesel.
Although the decree was signed while the FTA with Europe was being discussed, and the Europeans complained, the rule is still alive and due to be implemented as planned. This means that most European-made vehicles will not run in Colombia, because the mixtures are far beyond their technology limits.
This FTA is already approved by European and US governments but is still being finalised in detail. Once in place, the FTA will tier down vehicle tariffs gradually from 35% to zero.
Colombia has signed another FTA with Canada and is negotiating with Korea.
