Business opportunities with the European Union

Yesica Mireya Barón Suárez

Heidy Liseth Medina Reina

Politécnico Grancolombiano
Facultad de Ciencias Económicas y Administrativas
Programa de Negocios Internacionales
Bogotá, D.C.
2021
 Introduction

The purpose of this document is to know the business opportunities that Colombia has in
the export of coffee to the European Union specifically with France, in addition to this, to
investigate the conditions of access to the European market.

Therefore, first, an economic analysis will be carried out between the French and
Colombian economies to determine if the business is viable and if it has business
opportunities, then a brief comparison will be made on the general trade balance between
these same countries and then the trade balance with respect to coffee exports.

There are also some of the main indicators that are traded on the stock market in the
transactions of Colombia and France, where they do not have such a high flow with each
other, however, they have similarity in the primary indicators of the stock market that both
handle.
 Business opportunities with the European Union

France is currently a country with a large population, it has around 67,320,216 people in
addition to this, it is one of the countries in Europe that belongs to the eurozone, therefore it
can be deduced that its currency is the euro. One of the important things in the French
economy is that it occupies one of the first positions in the ranking of the 10 most important
economies in the world, this due to its gross domestic product since by 2020 it´s GDP was
2,278,947 million euros, this in view of per capita GDP is approximately 33,690 euros per
person, which indicates that France is a country that is economically stable and reflects
quality of life for its inhabitants, while in Colombia it can be evidenced that its economy is
ranked 42 by GDP and has a really high public debt with an approximate percentage of
52.29% of GDP, also Colombia is one of the countries with the most unemployment in the
world and therefore its GDP per capita is 5,738 euros, therefore it is classified among the
countries with the lowest level of quality of life, [ CITATION Dat20 \l 9226 ].

Figure 1. Compare the trade balance between France and Colombia

Source: Taken from Datosmacro.com

 In graph number one we can identify the trade balance of both France and Colombia
from 1960 to 2019 where we can realize that France has always maintained a low deficit in
its trade balance while Colombia maintained a stable low deficit until 2002, since then its
deficit in the trade balance has grown. However, the export of coffee from Colombia to
France from August 2020 to January 2021 is 321,188.32 gross kilos and therefore France is
ranked 23rd as an importer of Colombian origin coffee, [ CITATION Leg211 \l 9226 ].

According to Vargas, 2020 indicates that “French figures for 2019 show that more or less
its historical level is 350 million euros, but trade will remain at around 1,000 million euros
(US $ 1,083 million)”.

The Colombian stock exchange is represented as BVC while the French stock exchange is
represented as Euronext, you have not made many transactions in the stock exchange,
however in the BVC we find the most important COLCAP, COLEQTY, FTSE Colombia
and in France we find CAC 40, CAC all shares, CAC -all tradable as main indicators of
each country, but among the main indicators of both countries in transactions on the stock
market are; IBEX 45, S&P 500 Futures, Nasdaq Futures, Dow Jones, DAX, Dollar Index
and Euro Index, [ CITATION Inv21 \l 9226 ].

In the next graphs we can see the main indicators of the transaction in the French and
Colombian stock markets.

Figure 2. Graph of main indicators Colombia

Source: Taken from Investing.com

Figure 3. Graph of main indicators France

Source: Taken from Investing.com

Examples of foreign direct investment

The first example is about Legrand, a French company that is domiciled in Colombia
and is dedicated to being a benchmark provider in the market of infrastructure solutions for
data centers and has created a strategic alliance with ICREA, where Legrand points out that
the end "is for contribute with their knowledge in the evolution of the standard, which
currently covers the aspects of design, construction, administration, operation, maintenance,
acquisition and installation of infrastructure for information technology environments ".

The second example is the investment of France that in 2017 in greenfield projects a
total of 45,927 million dollars in Latin America, generating more than 146,152 jobs in 761
different projects, where 42% of this investment is concentrated in Colombia specifically in
the city of Bogota , with a capital invested of 979.1 million dollars in a total of 44 projects,
it is indicated that the company that invested the most was Saint-Gobain from the
construction materials sector, with an invested capital of 160 million dollars, [ CITATION
Per18 \l 9226 ].
 Conclusions

In conclusion, we can say that France is a very attractive market to invest in coffee
exports because its economic stability is very good and its quality of life is also high, and
Colombia does not have so many commercial relations with France despite the fact that
Coffee is already exported to Europe, Colombia is not the main exporter for them, therefore
it would be a viable business opportunity to invest in coffee exports since we would be
employing more people in Colombia for the process of manufacturing and exporting coffee,
in In this way, it would help to contribute to the decrease in the unemployment rate in
Colombia and a greater link could be established with France, which is why we see a
market niche to which we can target and promote these coffee exports.
 Bibliographic References

Datosmacro. (2020). Datosmacro.com. Recuperado el Marzo de 2021, de

https://datosmacro.expansion.com/
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Legiscomex. (Enero de 2021). Legiscomex. Recuperado el Marzo de 2021, de
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Legrand. (2018). Legrand. Recuperado el Marzo de 2021, de
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