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Evidencia 3: Ensayo “Free Trade Agreement (FTA): advantages and

disadvantages”

Instructor:

SERVICIO NACIONAL DE APRENDIZAJE SENA

Negociación internacional
1565325
2019

“Free Trade Agreement (FTA): advantages and disadvantages”

Before seeing the types of free trade agreements that countries like Colombia
and the United States have agreed upon, we need to know a little more what
these agreements mean and what they represent to a third world country like
Colombia.
The Free Trade Agreement between Colombia and the United States seeks to
establish trade without barriers or tariffs between the two nations mentioned.
The treaty is highly questioned. The treaty directly affects economic policy
issues, institutional, labor, environmental, intellectual property, among others.
The FTA is based on this belief in trade liberalization and the economic
integration, at all levels, between peoples. It is considered that economic
evidence would be irrefutable in terms of the benefits obtained product of
internationalization. All countries that have economies open to foreign
investment and a greater volume of international trade per capita (exports per
capita + imports per capita) would achieve levels of human development,
quality of life and economic growth, higher to its similar ones. Those who
defend free trade believe that this brings benefits to the less open countries,
because by increasing imports it is obliged to National companies to discipline
themselves "forcing them to adjust prices to costs marginal and thus reducing
the distortions created by monopolistic power ". At the same time, trade
liberalization. The productivity of companies. intermediates of high quality at
lower prices "and finally", the The productivity of companies increases when
the inputs come in contact with demanding international clients and with the
"best practices" of their external competitors.
In addition, domestic companies can benefit if they have the opportunity to
redesign the products of foreign companies ".
An agreement of the type of the current FTA negotiated between several
Andean countries and United States would be beneficial as long as as a whole
never sectoral throw a positive net result, that is, adding all the good and
subtracting everything the bad, you get a utility for the country. So far according
to what agreed in the table texts of the negotiation the net result that Colombia
would be getting serious for many experts still seem difficult to clarify.
However, there are also those parties that consider that it is beneficial for our
country, that the FTA free trade agreements be carried out.

Positive effects of the FTA.

The supporters of the Treaty consider that it has the following favorable effects:
- Access without tariffs to the United States for almost 100 percent of the
Colombia's exportable industrial offer, which must not only maintain
employment current in the sector but generate new places.

- Generating legal stability for investors and positioning as an entry

platform to the US for third-party entrepreneurs’ countries (which should
translate into greater domestic and foreign investment in the nation,
although in an amount difficult to quantify exactly).

- The contribution of some percentage points to economic growth: the

figure of this contribution also remains without consensus. The growth
of the country's international trade volume, both in exports as in imports.
The improvement of the international perception that Colombia has
abroad which should "reduce somewhat the country risk and the cost of
borrowing abroad".

- Access (in a difficult proportion to be precise) of Colombian companies

to purchases of the US public sector.

- The strengthening of controls on biopiracy, which should improve the

protection of Colombian biodiversity and other traditional knowledge.
Access to training, technical assistance and technology transfer, in a few
areas, within the framework of international cooperation projects agreed
upon in the FTA (this should make the benefited companies more
competitive and productive).
To facilitate (to some extent) the access of some of Colombian professionals
to the United States in order to provide services.

In addition, there would still be time to tilt the balance further in favor of
Colombia achieving objectives such as the approval of Colombian titles in the
United States, to agree even more flexible rules of origin for Colombian
exporters, expanding the total amount of the venture capital fund that will be
created, and (perhaps the most important of all) the creation of a committee
permanent bilateral decision-making that would provide real access to
Colombian agricultural exports, so that Colombia could exploit intensively its
comparative advantages - natural resources - and create sustainable
competitive advantages over time, which irrigate employment and wealth in
the entire Colombian nation.

Negative Effects of the FTA

Those who are against the FTA argue in general that in the net balance
Colombia would continue to obtain a minimum profit, and reproach the
following:

- Unequal distribution of advantages of the FTA: The government

officially assumed that there are winners and affected when this treaty
came into force. Different trade unions have expressed their rejection of
this agreement considering it harmful to the national economy, mainly
in the agricultural and intellectual property aspects. Sectors harmed are
rice, wheat, corn, sugar, poultry, cattle and cattle. the swine They will
be affected, not because they disappear, but because now they will have
to earn less, work more and compete more. In any case, there will be
very large structural changes if the FTA goes into effect.
 - Lack of popular consultation (which would be essential in such an
important matter). The disputes around the FTA are increased by the
absence of a popular consultation on the matter. Until now, different
unions, unions and ordinary citizens have expressed their rejection of
this agreement considering it harmful to the national economy, mainly
in the agricultural and intellectual property aspects.Other economic
sectors are clearly benefited, such as garments, flowers, Plastics and
leather goods. Faced with these wide divergences, a popular
consultation could be useful.

Bibliography:

https://es.wikipedia.org/wiki/Tratado_de_Libre_Comercio_entre_Colomb
ia_y_Estados_Unidos

http://www.aldiaempresarios.com/index.php?option=com_content&view=
article&id=3620:tlc-entre-colombia-y-estados-unidos-en-ingles-colombia-
trade-promotion-agreement-tpa-&catid=1140:tlc-eeuu-
colombia&Itemid=336

http://www.tlc.gov.co/publicaciones/5398/acuerdos_vigentes