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

DISADVANTAGES”

WENDY YOULIETH LOZANO RODRIGUEZ

SERVICIO NACIONAL DE APRENDIZAJE SENA

TECNOLOGÍA EN NEGOCIOS INTERNACIONALES
ACTIVIDAD DE APRENDIZAJE 11
2019
 Free Trade Agreement (FTA): advantages and disadvantages”

The Trade Promotion Agreement between the United States and Colombia, also called FTA,

is a Free Trade Agreement (FTA) between Colombia and the United States. Approved on

October 12, 2011 by the United States Congress and effective as of May 15, 2012.

As for its legislative process, to enter into force with legal rigor, it had to be ratified by the

congresses of the United States and Colombia.

Since May 15, 2012, the Free Trade Agreement (FTA) signed by Colombia and the United

States entered into force with the objective of promoting trade between the two countries.

The Treaty affects all sectors of the economy and national productive life, including ICT.

Likewise, in the matter of direct purchases of foreign products, citizens will have at their

disposal shopping lists, mostly free of tariffs, which they can access through electronic

commerce services. In this case it should be taken into account that even when the entry

taxes can be eliminated, there will always be the shipping costs that can increase the final

value of a product. Here the importers wholesalers have to win because they can offer the

usual products, and many others at a lower price, and customers can save tariffs and direct

shipping costs.

In the United States, at the end of August 2006, President George W. Bush delivered the

final text of the agreement to the United States Congress for discussion and approval. Since

April 2008 the vote for approval was postponed after former President Bush sent the treaty
untimely for approval, which was considered as undue pressure by the Democratic Party at

the head of House President Nancy Pelosi.

For its part, the Colombian Congress ratified the FTA, through law 1143 of July 4, 2007 and

the Constitutional Court, declared it adjusted to the constitution, on July 24, 2008, by means

of judgment C-750 of 2008. Initially the treaty was approved in the Colombian Congress

with the refusal of the opposition benches of the left and center left, in the parties of the

Alternative Democratic Pole and Colombian Liberal Party, but later the main opponent of

this project would be the Congress of the United States that did not approve it after the

Democratic Party reached the majority in the congress of that country and changed the

positions against the policies of the Bush administration. Finally, the treaty between

Colombia and the United States was approved by the House of Representatives and the US

Senate on October 12, 2011.

The treaty was approved at the VI Summit of the Americas that took place in Cartagena

from April 9 to April 15, 2012, and entered into force on May 15, 2012.

Those who are against the FTA argue in general that in the net balance Colombia would

continue to obtain a minimum profit.

Jorge Enrique Robledo, senator of the opposition Alternative Democratic Pole, considered

that the FTA "is a mule and rider agreement", which will generate more poverty and with

which only the United States wins.

ADVANTAGES OF THE FTA.

Access to wider markets: essential for small economies.

Access to higher quality products and lower prices.

Contact with technological and scientific advances.

Better salaries and quality of employment.

It opens the doors to the largest market in the world.

It consolidates ATPDEA preferences and will cover the entire tariff universe.

It is binding, so uncertainty would be reduced.

It implies lower costs in the import of inputs and capital goods.

It generates improvements in productivity and competitiveness.

It promotes the realization of structural reforms and the stability of the rules of the game.

Attracts foreign direct investment.

DISADVANTAGES OF THE FTA.

The commercial opening will generate a greater integration of the country into the world

economy, which will make it possible to reduce the volatility of its growth, the level of

country risk and the financing cost of private activity in general.

We open to a new market with purchasing power greater than ours.

Not all sectors of the economy benefit equally from free trade agreements. There are

undoubtedly more sensitive products that are protected with certain commercial defense

mechanisms.

The negative effects on certain products can also be mitigated if appropriate measures are

taken to boost their competitiveness or in any case encourage their conversion to activities

with greater growth potential.

Social convulsion for the exacerbation of poverty and exploitation of small farmers and

micro entrepreneurs.

Loss of economic development opportunity due to the sale of products at market prices,

given the rigged exploitation of our natural resources.