NEGOCIACION INTERNACIONAL

ACTIVIDAD DE APRENDIZAJE 11

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

disadvantages”

APRENDICES
JULIAN ACEVEDO CARMONA
YULIANA ACEVEDO CARMONA
CLAUDIA JULIET OCHOA MUÑOZ
MILDREY VIVIANA GARCIA PINEDA
JONATAN VELEZ RESTREPO
PAULA CLEMENCIA OSORIO
MAUREN DANIELA LOAIZA ORTIZ
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 conformed 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.1
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 multilaterial 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 country2