Actividad de aprendizaje 11

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

Jean Carlos Vargas Martínez

Servicio Nacional de Aprendizaje (Sena)

Formación Virtual
Programa Tecnólogo en Negociación Internacional
Medellín. Colombia
2020

Gerson Huertas Carreño

Investigue sobre los tratados de libre comercio que Colombia tiene vigentes con los
Estados Unidos.

Escriba las ventajas y desventajas de estos tratados para Colombia.

The Colombia - US TLC is constituted by norms and procedures derived from them, which
are applicable in equal conditions for the two countries. The TLC is not a Law, nor is it
confirmed by them; However, according to the Political Constitution of our country,
international agreements have all the rigor and have to be complied with like any other
current legislation.

The TLC is a kind of guide on how to export - import among the signatory countries, with
general recommendations and criteria that determine the framework under which each
country can act to obtain the greatest benefits. In this sense, on the one hand, it is
necessary for the two countries to issue legislation on specific issues that take advantage
of bilateral conditions; on the other, each country is free to dictate its national economic
policies and take the measures it deems pertinent to boost international trade and
especially to protect and promote the export of its products

TLC went into effect on May 15, 2012, signed between Juan Manuel Santos and Barack
Obama at the Summit of the Americas without possessing a due date but with the
possibility of seeking reforms or termination by each of the parties . This agreement is
organized in a document of 23 chapters dedicated to different topics

FTA Organization Colombia - United States

Preamble
Chapter 1 Initial Provisions and Initial Definitions
Chapter 2 National Treatment and Access of Goods to the Market
Chapter 3 Textiles and Clothing
Chapter 4 Rules of Origin and Origin Procedures
Chapter 5 Customs Procedure and Trade Facilitation
Chapter 6 Sanitary and Phytosanitary Measures
Chapter 7 Technical Barriers to Trade
Chapter 8 Commercial Defense
Chapter 9 Public Contracting
Chapter 10 Investment
Chapter 11 Cross-border Trade in Services
Chapter 12 Financial Services
Chapter 13 Competition Policy
Chapter 14 Telecommunications
Chapter 15 Electronic Commerce
Chapter 16 Intellectual Property Rights
Chapter 17 Labor Issues
Chapter 18 Environment
Chapter 19 Transparency
Chapter 20 Administration of the Agreement and Strengthening of Commercial Capacities
Chapter 21 Dispute Resolution
Chapter 22 General Exceptions
Chapter 23 Final Provisions

These international trade agreements bring to Colombia, the advantage that their
employers can sell their products and services abroad under better conditions, without
paying taxes (tariffs) without being subject to other barriers, which do have to pay in case
of not having these treaties.

This helps the national economy of a country to grow as it has a much wider consumer
market than when it is limited to its entrepreneurs to sell in the domestic market.

Therefore, free trade is considered positive, because the lack of trade barriers makes
exporting easy and relatively cheap. In this way, a country can focus its resources more
efficiently and achieve a higher real income. Despite the global benefits of free trade for a
country's economy, there may be some important drawbacks to the establishment of free
trade agreements.

Colombia is not a threat to the US in political and economic matters, since the total
production of the country is only ¼ of their production. Colombia we are small in the impact
that it can generate in the North American production therefore the economists consider
that the TLC will be generous.

Colombia is still at a disadvantage because the US is in a greater capacity to generate

competition and production in sectors where Colombia is more dynamic. In turn, Colombia
has sectors in which it can compete in fruits, vegetables, footwear, textiles, etc. Without
ignoring the great disadvantage of the gap between a developed country such as the US
and a developing country like Colombia

In general, the main disadvantages of the TLC are:

• They are not equitable as multilateral agreements

• Emerging economies lose

• Complicated competition to sustain for national industries

• Imbalance of the internal economy and lack of protection of productive sectors little
benefited with the negotiation of the Treaty.

• Mismatch in terms of tax revenues, since by eliminating tariffs entry of foreign products
would be leaving to receive tax concept, which could deepen the national fiscal deficit;
However, analysts expect this money to be recovered as a result of IVA 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