TECNOLOGO EN NEGOCIACION INTERNACIONAL

PRESENTADO POR
JOHNNY VASQUEZ BECERRA
CAMILO PALENCIA
ADRIANA PINEDA

FASE DE EJECUCIÓN

INSTRUCTOR
FRANCISCO JAVIER ARIAS OSORIO

SERVICIO NACIONAL DE APRENDIZAJE SENA

FICHA 1749909
2019
 Actividad de aprendizaje 11
Evidencia 3: Ensayo “Free Trade Agreement (FTA): advantages and
disadvantages”

Free Trade Agreement Colombia -United States

The Trade Promotion Agreement (technical name) popularly known as the Free
Trade Agreement is an agreement between these two countries that seeks to
promote foreign investment and encourage the economic and social development
of these nations.
The main objective of this agreement is the reduction of tariffs and taxes so that
the producers of both countries can trade freely, that is why Colombia eliminated
about 80% of tariffs and the United States eliminated them definitively.
The government of the United States and the Ministry of Commerce, Industry and
Tourism of Colombia, began negotiations in 2003, was signed in 2006, in 2011
began its implementation, culminating and promulgating on May 15, 2012 through
Decree 993 which has no expiration, but if required can request a reform or
termination.
The text of this agreement is composed of a preamble and 23 chapters in which it
mentions how to export - import between the signatory countries, with general
recommendations and criteria that determine the framework under which each
country can act to obtain the greatest benefits, contains rules and procedures
which are applicable on equal terms for the two countries, according to the Political
Constitution of Colombia the international agreements have all the rigor and have
to be complied with as any other regulation (law) in force.
It is necessary that both countries issue legislation for specific issues that take
advantage of bilateral conditions; since each country is free to dictate its national
economic policies and take the measures it deems appropriate to promote
international trade and specially to protect and promote the export of their
products.
In this agreement there are three major blocks that comprise: legal compatibility
and institutional aspects such as administration, transparency commitments and
dispute settlement mechanisms; rules of origin, customs procedures, trade defense
and public procurement of industrial products, agriculture and services; cross-
cutting issues such as intellectual property rules, competition, labor and
environmental issues, investment and strengthening of trade capacity. All this,
because Colombia is a member of the Andean Community of Nations (CAN) and
should continue to be governed by Andean law despite having signed this
agreement and apply the principle of the Most Favored Nation and extend the
benefits to those who have not yet negotiated, in order to make new trade
agreements.
The issue of market access aims to remove tariff barriers (import taxes) and non-
tariff barriers (technical restrictions such as quality standards or sanitary and
phytosanitary measures) to trade in goods and services, i.e. they seek preferential
access and national treatment in the other country's market.
The agricultural sector benefited: rice, chicken, dairy products, meat, coffee,
flowers and plants, fruits and vegetables and oilseeds. In the industry, the rule of
origin for cuts and seams was improved in Colombia in the export of clothing for
textiles and clothing. In ceramics, better conditions of access to the American
market were obtained, allowing consolidation. With tobacco and cigarettes, it has
achieved a flexible rule of origin, improving the U.S. market and increasing
domestic production to meet export demand.
In the area of services, a working group for professional services was created to
provide a permanent framework for professional bodies in Colombia and the United
States to work on mutual recognition and the development of licensing standards.
In the area of public procurement, a bilateral opening was achieved through lists
that define the application of government entities, eliminating barriers and allowing
access to public procurement at the federal and sub federal levels in the United
States.
In cross-cutting issues such as intellectual property, it establishes rules in order to
facilitate trade in intangible goods, encourages and protects creativity and
research; in investment, it established a legal framework that protects the investor
and allows the growth of foreign investment flows.
In competition policy, it establishes rules in order to put an end to non-competitive
practices and promote efficiency and consumer welfare.
On the labor issue, they commit themselves to comply with their own labor
legislation and to respect the fundamental rights of workers according to the
International Labor Organization (ILO): the right of association; the right to organize
and bargain collectively; the prohibition of the use of any form of forced or
compulsory labor; a minimum age for the employment of children, and the
prohibition and elimination of the worst forms of child labor; and acceptable
working conditions regarding minimum wages, hours of work, and occupational
safety and health.
With regard to the environmental issue, it deals with two main elements:
obligations to protect the environment and cooperation between the parties that
facilitate compliance with those obligations. There must be a balance between
trade and the environment, and it is essential that the benefits derived from
increased trade flow will not have harmful effects on our environment, such as the
improper exploitation of our natural resources.
Accordingly, Colombia has had to overcome challenges such as compliance with
international quality standards, improvement of production systems, adoption and
intensive use of new technologies, training of personnel to respond to the specific
demands of domestic and foreign markets, knowledge of international trade
regulations, decentralization of operations and settlement in the United States; This
compliance is reflected in the increase and acceleration of economic growth,
increase in exports, especially of products and services that were not previously
considered as "traditional" in the market, increase in the competitiveness of
domestic industry derived from access to new technologies, raw materials and
knowledge from the other country at lower costs, generation of employment as
sales in the foreign market expand and definitely the increase in investor
confidence.
From the beginning of this agreement, the market of goods and services was
opened, stability and predictability in the rules of the game of trade of goods and
services between the two countries was created confidence for Colombia; today
Colombia can be seen as a more competitive, more productive and more
commercially mature country; there was greater access for the acquisition of
machinery and equipment imported from the United States by the elimination of
tariffs.
One of the great beneficiaries in terms of services is the graphic industry, software
and information technologies, the outsourcing of business processes and health
tourism, all of which are included in the productive transformation program.
But there are also disadvantages for Colombia such as what happened at the
beginning of the agreement, imbalance of the internal economy and lack of
protection of productive sectors that benefited little from the negotiation of the
Treaty, misalignment in terms of tax revenues, since by eliminating tariffs on the
entry of foreign products, taxes on this concept were no longer received; little
capacity for national companies to adapt to international production standards,
generating monopolies and capturing the market by the U.S. offer that enters the
country.
All changes bring advantages and disadvantages, and the implementation of these
agreements are not alien, but it can be said that consumers are the ultimate
beneficiaries because they will be able to access products from the other country,
as well as choose the most favorable prices and the wide variety of foreign
products to which they can access through e-commerce services. Here, wholesale
importers have the chance to win because they will be able to offer the usual
products, and many others at lower prices, and customers will be able to save on
tariffs and direct shipping costs.