Trade agreements with Asian countries

CULTURE AND REGIONAL ECONOMY OF ASIA

Students Name
Andrea Del Pilar Lara Cod: 1621020690
Jineth Gómez Rodríguez Cod: 1621021271
Jenifer Vera Gómez Cod:1811983518

Teacher's name: Alexander Balzan

Politécnico Grancolombiano
Bogotá, Colombia

June 02 de 2020
 Trade agreements with Asian countries

Introduction

The growing importance of the economies of Asian countries, particularly those located

in the Pacific Rim, in today's globalized world, is something about which there is no longer any

doubt. The mere fact of recognizing the great resilience of these economies in the face of the so-

called Asian crisis, to go back today on the path that is leading them to become a powerful pole

of world development, indicates the great importance of studying fully the economic and social

evolution of these countries, the structural features of their economies, their economic

entanglements and creative outlets, their relations with international organizations, the quality of

the well-being of their populations, their racial and cultural encounters and disagreements, in

short , any phenomenon that is useful to auscultate to find lessons and references that allow us to

understand our own problems.

 Trade agreements with Asian countries

1. Descripction economic block

CHINA

Table 1
Economic description of China
Capital: Pekín, 21.540.000 population.
State name: People's Republic of China
Official name: Zhonghua Renmin Gongheguo
Land Surface: Has 9.596.900 km2. It is the fourth largest country all over the world after

Rusia, Canada and EEUU. Occupies 6,5% of world Surface.

Population: 1.415.045.928 population.
Official language: Chinese constitution establishes in its article 19,

State promotes the national use of Putonghua (known as mandarin chinese).

Currency: The oficial currency of People's Republic of China it is Renminbi (RMB), translated

as ‘people currency’ or Yuan (CNY).

Average price of the euro in 2018, 1 euro/ 7.81 CNY.

State form: Republic.
(diplomatica D. g., 2019)
 Trade agreements with Asian countries

This country occupies the second position in Colombia's total sales abroad. At the end of

2018 this market represented 9.7 percent of national exports, while in 2017 it represented 5.8

percent.

With China we have had a commercial relationship that has been growing. Ten years ago,

it was not part of the list of the 10 main destinations of our exports and only 1.1 percent of those

Colombian sales were directed to that market. Today, we have a major challenge and that is to

increase our non-mining and energy exports, which currently represent 6.2 percent of the total

dispatched to that destination," explains the ministerial portfolio.

In relation to these figures, ProColombia reveals that last year non-mineral energy

exports to China totalled US$260.7 million, 18.4 percent more than in 2017. Likewise, during

this period, 210 Colombian companies exported to the Chinese market.

MinComercio adds that now the country is advancing the process of sanitary eligibility

for several products that want to be marketed with them as beef, pork and chicken, among others.

For this reason, the country is working together with ICA, ProColombia and Colombia

Productiva to reach the standards required in China for this type of goods.

MinComercio reports that in 2018 Colombia's total exports to China were US$4,172.7

million, showing a growth of 88.7 percent. Of these, non-mineral energy exports represented

US$260.7 million (up 18.4 percent), while during the first half of 2019 foreign sales reached

US$1.862 billion, an increase of 4.9 percent, while non-mineral energy exports reached US$40.6

million, a drop of 71.7 percent.

 Trade agreements with Asian countries

INDIA

Table 2
Economic description of India
State name: Republic of India
Capital: New Delhi (28.514.000 population).
Land surface: 3.287.595 km²
Geography: More than half of the territory is arable land. As overcrowding puts strong

pressure on natural resources, water supply is an increasingly problematic.

Land borders: Shares land borders with Nepal, Bhutan and China to the North. To the South

with Indian ocean, the Palk Strait and the Gulf of Mannâr, which separates it from Sri Lanka.

To the west with Arabian sea and Pakistan. To the east with Myanmar, Gulf of Bengal and

Bangladesh, which separates the north-east of the country.

Population: 1.354 millions (estimate of NNUU in 2018).
Languages: Hindi and english (official communication languages for the central government).

22 languages are oficial locally.

Currency: Rupia (INR). In 2018 it ranged from 76 to 85 rupees per €.
Religions: Hinduism (79,8% of population), islam (14,2%), christianity (2,3%), Sikhism

(1,7%),

buddhism (0,7%), and jainism (0,4%).

(Ministerio de asuntos exteriores, 2019)

Colombia currently has a trade agreement with India. This has brought benefits to many

Indian companies that have seen Colombia as an investment platform.

 Trade agreements with Asian countries

Taking into account trends in Indian investment projects, Procolombia has identified

opportunities for Indian entrepreneurs in sectors such as BPO&O, software and IT services and

metalworking.

The country also offers the investor advantages as an export platform, for example, to the

United States with which there is an FTA in force and which allows the entry of items such as

medical devices with tariff benefits. This same condition applies to exporting pharmaceutical

products from Colombia to Switzerland and Chile, with which there are also free trade

agreements in force.

The agreement signed in New Delhi aims to prevent the country's investors and

Colombians from paying taxes twice, in the country of origin of the investment and then in the

country of destination, which facilitates trade relations

The agreement also allows for the exemption of shareholders from income tax and

improves the information of the tax authorities, which facilitates better control against tax

evasion and avoidance.

It is hoped that a partial agreement can be reached, which would speed up trade, without

having to go through the Colombian Congress and the Indian Parliament. This figure is even the

most used by the Indian Government, both the Indian and Colombian Governments will have to

present list of the products on which they would like to have tariff benefits.

RUSSIA
 Trade agreements with Asian countries

Table 3
Economic description of Rusia
Capital: Moscow, 12.000.000 population.
State Name: Russian Federation.
Religion: Mostly Christian
Land surface: With 17.098.250 km, is the largest country of the world,

stretches over almost the entire north of the Eurasian supercontinent: occupies Asia’s North

(1/3 of continental surface) and and eastern Europe respectively, 74.7% and 25.3% of its

territory.
Population: 146.800.000 population
Language: There are 160 ethnic groups which speak a total of about 100 languages,

approximately 142.6 million people speak the Russian followed by Tatar with 5.3 million and

German with 2.9 million, followed by other languages.

Currency: The official currency of the Russian Federation is the Ruble

(https://es.rbth.com/estilo-de-vida/83533-rusia-tiene-poblaci%C3%B3n-adem%C3%A1s-est

%C3%A1, 2019)

This country was selected because the Russian market is highly attractive to any country

in the world with a population of almost 150 million. The city of Moscow has the largest number

of billionaires in the world so exporting to Russia is a market that no country should resist.
 Trade agreements with Asian countries

"Colombia has companies that export to Russia and show us that reaching a distant

market is not impossible. In 2017, Colombia sold this country US$80 million mainly in

agricultural products such as coffee and fruits, and value-added products such as latex balloons,"

said Felipe Jaramillo, president of the entity.

Precisely, in this group of exports, flowers and live plants represent 34.8% of the total,

agro-industrial products 29.8%, and agricultural products 17.0%, while livestock exports are

equivalent to 15.0% of the total, those of metal-mechanical products 1.0% and other types of

dispatches 2.2%.

Figures from ProColombia show that total exports to this country in 2017 were US$81.76

million, and that the goods most dispatched to this destination are non-mineral-energy goods,

which represent 97.9% and for which US$80 million was received.

A statistical analysis of economic trends

 Trade agreements with Asian countries

Table 4
Economic trends Rusia
STATISCAL ANALYSIS OF TRENDS IN RUSIA
 
ECONOMY YEAR FACT
 
PUBLIC SPENDING 2018 3117 X HABITANTE
PUBLIC EXPENDITURE PER 2019 12,32
CAPITA €
PIB ANNUAL 2019 1.518.813
€
PIB PER CAPITA 2019 10,346
€
EDUCATION EXPENDITURE 2017 10,99%
HEALTH EXPENDITURE 2017 8,78%
UNEPLOYMENT RATE APRIL 3,10%
2020
GENERAL IPC APRIL 3,10%
2020
GENERAL IVA 2019 20%
EXPORTS PIB % 2019 24,63%
IMPORTS PIB % 2019 14,94%
BALANCE OF TRADE PIB% 2019 9,69%
BIRTH RATE 2018 11,50%
MORTALITY RATE 2018 12,40%
UNEMPLOYMENT 2019 4,60%
(datos macro expansion territorial, 2020)

GCJFCLLKMCPKMJO

CHINA
Natural resources percentag
e
magnesium 79 % Table 5
tin 43% Economic trends China
zinc 31%
tungsten (83%) 83%
rare earth 78%
molybdenum 38%
Arable land 14%
Permanent 43%
pastures
The forests 14%
 Trade agreements with Asian countries

Markets
Latest % Reference Previous Rank
Currency 7.09 2020 7.0 1.53 :
-06 7 8.73
Economic factor Latest%
Reference Previous Rank
GDP - Quarterly growth -9.8 2020 1.5 -9.8 : 2.6
rate -03
GDP - Annual growth -6.8 2020 6 -6.8 :
rate -03 15.3
Unemployment rate 6 2020 5.9 3.9 : 6.2
-04
Rate of inflation 2.4 2020 3.3 -2.2 :
-05 28.4
Commerce Year Values
Annual arrivals 2018 62.900.000
Exports 2019 2.232.272,4 M.€
Exports% 2019 17,43%
GDP
Imports 2019 1.855.379,3 M.€
Imports% GDP 2019 14,48%
Balance of trade 2019 376.893,1 M.€
Trade balance% GDP 2019 2,94%

Table 6
Economic trends India
 Trade agreements with Asian countries

STATISTICAL ANALYSIS OF TRENDS IN INDIA

YEA
ECONOMY FACT
R
Public spending 2018 602.316,90
Public expenditure per capital 2018 602.316,90
2.354.689M.
Annual GDP 2.018
€
GDP per capital 2.018 1.741 €
Education expense 2.013 55.420,50
Health expenditure 2.017 21.877,70
Unemployment rate 2.018 5,30
General ipc 2.018 4,90%
General VAT 2.018 18,00%
GDP exports% 2.018 11,68%
Imports GDP% 2.018 18,50%
Balance of trade % 2.018 -6,82%

Birth rate (per 1,000 people in 2019) 2.019 17,6

Mortality rate (per 1,000 people in 2019) 2.019 7,3

Rate of inflation (%) 2.020 3,3
((paises, 2019),

Table 7
Economic activity
Distribution of economic activity by sector farming Industry Services
Employment by sector (in% of total 43,2 24,9 31,9
employment)
Value added (in% of GDP) 14,6 26,7 48,9
Added value (annual growth in%) 2,9 6,9 7,7
Source: World Bank, latest available data.

Taking into account that these three countries have a solid economy which is base don

the Good which is base don the Good management that has been given to their importsand

exports, the managment of unemployment,VAT, foreign debt, trade, and growth of each country,

makes us review statiscal data and find that they are markets open to Good negotation with our

country since both Russia and China are very strong in exports, you can enter their market
 Trade agreements with Asian countries

competing with very Good products, India is a major import which generates a lot More market

to make movemnts, exchanges can be made managing a proportional tariff and that generates

growth.

2.CUSTOMS BARRIERS

RUSSIA

Taking into account the economic strength of this country, it is also very demanding in

terms of trade, for this reason, is the country with the greatest trade barriers, which has been

worried the European Union because the economic impact has been quite significant and it is

reflected in the figures. This is due to the fact that there are so many requirements that have been

placed for many products that income has decreased in terms of exports to Russia.

Likewise, Russia is subject to the regulation given by certain norms and requirements

established by the Eurasian Economic Union (EAEU). although this has not affected the

requirements, the internal structure or the norms that regulate trade with Russia because it is still

integrated into the Federal Customs Service, customs centers and customs posts. But the

applicable technical standard does or the tariff rate is affected in a certain way.

It is necessary to figure it out which products have restrictions according to the

regulations of this country to be able to participate in this market, because sanctions can be

reached with products such as:

 Trade agreements with Asian countries

● Meat and edible meat offal

● Fish and fishery products

● Vegetables like onion, corn and peas.

● Fruits.

● milk and milk products, especially cheese.

● Cold meat.

On the other hand, if we follow adequate compliance with all the parameters that are

established, such as the documentation required for processing that it has in imports. Tariffs and

other payments at borders, customs economic regimes. Norms and technical requirements,

homologation, certification and labeling we will not have problems and if very good results of

the agreed negotiations.

CHINA

These tariffs correspond to taxes that the state places and their value is calculated on the value of

each product; when the exporting country is also a member of the WTO, like China, its products

are entitled to the Most Favored Nation rates, which are lower than the general rates

• Value added tax: which is applicable to the import of almost all products. A rate of 13%

applies to cereals, vegetable oils for food, heating, air conditioning, gas in different variants, coal

and charcoal products for domestic use, books, newspapers, magazines, feed, chemical

fertilizers, agricultural chemicals. , agricultural machinery, plastic film for agricultural purposes

and other goods prescribed by the State Council, while the rest of the products are subject to a

rate of 17%
 Trade agreements with Asian countries

• Import consumption taxes: which are only levied on a limited number of consumer

goods such as tobacco, liquor, cosmetics, rubber tires, jewelry, automobiles, high-end watches

and golf equipment, with rates ranging from 1% to 40%.

NO DUTY BARRIERS

China classifies its imports into three categories:

Permitted

Currently the majority of products imported into China are in this category, some of these

already have their license which is renewed annually and are in the product catalog generated by

MOFCOM and the General Administration of Customs (AGA)

Restricted Merchandise

In this case the products are controlled by quotas or licenses, this determination is made

by the state if they incur the safety of the people residing in China and the protection of

exhaustible natural resources. Among these restricted products are: used mechanical, electronic

products and substances that reduce the ozone layer.

Prohibited merchandise

In this country the importation of merchandise such as certain wastes and toxins is

prohibited.
 Trade agreements with Asian countries

Farm products

Currently, the importation of agricultural products in China grows year after year, the

products imported by China have a relatively equitable distribution, with the exception of

soybeans, which account for 30% of total imports. In this sense, the most imported products, in

addition to this oilseed, are non-carded cotton, whole milk powder, whole hides and turnip and

rapeseed, among others.

For Colombia there are opportunities to export products such as bananas, avocados,

coffee, flowers and meat to China, among others whose objective is diversification. Currently

85% of Colombian exports to China are mining-energy and non-traditional exports barely exceed

US $ 200 million, so that our country can expand expectations of entering the Chinese market

with cultivated products, which are attractive for this market.

INDIA

India is characterized by being a complicated and diverse market, with economic policies

and socio-cultural behaviors that vary between the different territories that make up the country.

It should be borne in mind that india has not consolidated its development. It is an emerging

market, which is why to access this market you must have a representative and the ability to

maintain yourself in the long term. At the same time, a trusted partner in the country is

recommended. The government wants to promote international trade relations, which is why it

has adapted the reduction of import tariffs for some products. "The import and export of goods in

India is governed by the Foreign Trade Act of 1992 and the country's export and import policies

are regulated by the Export and Import Policy or EXIM, responsible for the regulations that
 Trade agreements with Asian countries

apply to international trade in India . The international trade policy for the current period can be

found in Foreign Trade Policy 2015-2020. ” (ICEX, 2019)

Tariff and non-tariff measures

The Indian Government taxes different types of tariffs on imported goods, including:

Basic tariff: Applies to the CIF value of imported products. Normally “Ad Valorem” is
applied.

Extra Duty (or Countervailing Duty): The Countervailing Tariff (CVD) is equal to
internal taxes and is levied on items imported and produced in India.

Anti-dumping tariff: The central government can impose anti-dumping tariffs if it

determines that a specific good is being imported at a price lower than fair market value, in
which case the importer will be notified. The tariff cannot exceed the difference between the
export and the normal price (dumping margin).

Safeguard duty: To protect the national industry in India there is a safeguard duty, also
called a safeguard duty, which is a tax that the Government applies to protect the local industry.
This tariff is imposed when the Government decides that imports have suddenly increased and
this may cause injury to the local industry.

Protectionist tariff: Protectionist tariffs are sometimes imposed to protect the local
industry from imports. With this, the tariff commission issues recommendations for this tariff.
The government can determine the time in which this fee will govern.

The main products that India exports, stand out ground rice responsible for 16% of
exports, in addition is cotton, wheat, soy, peanuts, beef, coffee and tea. Among the most
imported products by India vegetable oil stands out.
 Trade agreements with Asian countries

One of the products that has the most business opportunities in India is Colombian coffee
due to its high quality, but one of the great difficulties in the tariff, which is very high, is the
possibility that the partial AAPA agreement, which advances such as the Indian and Colombian
Negotiations, coffee and other products established in this agreement, which is not an FTA, but if
an agreement can lower that tariff or inclusive, bring it to zero.

Conclusions

Colombia has the wide possibility of generating more agricultural production since, due
to its geographical location, it can produce a great variety of these products, counting on
standards of the best quality and impact for countries that have to import it; Most of these goods
due to various factors such as Russia being one of the coldest countries in the world cannot
 Trade agreements with Asian countries

generate at the same rate of consumption as the population requires, this being a sector in favor,
China the Asian giant with more than 1,433 million inhabitants, with constant growth, represents
an attractive country for anyone, being the world's largest agricultural producer by volume and
the second largest agricultural importer in the world by value, a sector in favor of exotic
Colombian products such as mango, cocoa, the African palm, bovine meat, among others, India
being the second most populous country in the world, with more than 1,366 million inhabitants
and being one of the 10 most important economies, it is located as a growing country due to its
low living standards. of its population. More than half of its territory is cultivable but due to the
constant socio-political changes and social inequality they do not have the option of exploiting it
at a higher rate, being the opportunity to export a wide variety of national products, highlighting
that it is necessary to have a wide catalog of products already that this country's tariffs are too
high.

Colombia is an emerging country with ample opportunities to grow, although in order to

get more out of these goods, it has important issues to improve, such as logistics routes to export
its products from the center and south of the country to seaports, armed groups create fear
Among the regions preventing growth of these sectors, also mining and illegal crops destroying
natural territories and with opportunities for cultivation and economic growth and GDP of the
country.

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 Trade agreements with Asian countries

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 Trade agreements with Asian countries

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