ACTIVIDAD DE APRENDIZAJE 11

EVIDENCIA 3: ENSAYO “FREE TRADE AGREEMENT (FTA): ADVANTAGES AND

DISADVANTAGES”

INTRODUCTION
THE FTA WITH THE US IS SIGNED IN ORDER TO REDUCE TARIFFS AND
TAXES FOR BOTH COUNTRIES AND SO THAT BOTH CAN COMMERCIALIZE
THEIR PRODUCTS FREELY.

In this essay we will discuss the advantages and disadvantages of the FTA
between both countries, through research conducted in the web pages of this
treaty, in order to develop a broader and clearer knowledge of this subject

FTA signed with the United States came in to force on May 15, 2012, as agreed by
Presidents Juan Manuel Santos and Barack Obama at the Summit of the Americas
this year. This Agreement, like other FTA, does not have an "expiration date", but
one of the parties may request the other party to reform or terminate it following the
procedure set forth in the final document.

Not all products and services are covered by the FTA, that is, not all can cross
borders without paying tariffs. Proexport published official lists of tax-exempt
products and services, classifying them as agricultural and non-agricultural.

Colombia eliminated tariffs for the entry into the country of about 82% of industrial
products generated in the United States, meanwhile, the United States. he
eliminated them for almost all Colombian products that cross their borders.

ADVANTAGES AND DISADVANTAGES

ADVANTAGES

• Increase and acceleration of economic growth derived from the greater flow of
capital.

• Increase in exports, especially those of products and services that were not
previously considered "traditional" in the market.

• Increase in the competitiveness of the national industry derived from access to new
technologies, raw materials and knowledge from the other country at lower costs.

• Stability of the labor market in the industrial sector, to the extent that companies
will require their personnel plant to produce the goods they will export. Likewise,
there is the possibility of generating more employment as sales in the foreign market
expand.

• Increase in investor confidence.

• Modernization of the State and organizations related to foreign trade.

DISADVANTAGES
 Imbalance of the internal economy and lack of protection of productive sectors
that have little benefit from negotiating the Treaty.
 Maladjustment in terms of tax revenue, since eliminating import tariffs for
foreign products would stop receiving taxes for this concept, which could
deepen the national fiscal deficit; However, analysts expect that this money
will be recovered as VAT and Income Tax derived from the greater movement
of the economy.
 Little capacity of adaptation of the national companies in front of the
international production standards, generating monopolies and capture of the
market by the North American offer that enters the country.

CONCLUSIONS
The FTA is an excellent treaty for trade in our country, because it allows
products to be marketed in other countries with better tariff rates and in
addition to this the country grows more as an exporter.

This makes it more employment and as there is more employment there

is more growth in the country and higher sources of income.