ACTIVIDAD DE APRENDIZAJE 11.

EVIDENCIA 3: ENSAYO “FREE TRADE AGREEMENT (FTA)” –

ADVANTAGES & DISADVANTAGES.

APRENDIZ:

MARCELA BELTRÁN HENRÍQUEZ.

INSTRUCTOR:

ROLANDO VEGA.

SERVICIO NACIONAL DE APRENDIZAJE SENA.

NEGOCIACIÓN INTERNACIONAL.
REGIONAL CAUCA.
06 JUNIO DE 2022.
 ESSAY ABOUT “FREE TRADE AGREEMENT (FTA).
The entry into force of the Free Trade Agreement (FTA) between Colombia and
the United States is the beginning of a "new era" in relations between the two
countries.
“It is one of the most important days in the history of relations between the
United States and Colombia. We started a new era in the diplomatic and
commercial alliance of both countries. With NAFTA, Colombia enters the big
leagues ”said Ambassador Silva.
In the last decade, Colombia's foreign trade policy was based on
the deepening of trade relations with the Andean Community and the efforts to
obtain unilateral access to certain markets, especially the United States,
through the ATPA schemes. / ATPDEA, and that of the European Union,
through the GSP scheme.
He reaffirmed that Colombia is today a country more open to the world, with a
productive sector that has matured and has better conditions to attract
investment and conquer foreign markets.
Due to the increasing gap between exports and imports, being the second
largest in Colombia, it is evident the need to promote important changes in
trade policy, such as finding new markets and for this it is important to move
forward without delay to the subscription of free trade agreements such as the
one decided to negotiate with the United States. After the last extension of the
ATPDEA in 2010 that ended on February 15, 2011, the FTA with the United
States is seen as a possibility for entrepreneurs to make long-term investments.
Term, which increase their productive capacity and have stability in time and
favorable conditions for exports.
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 the entire 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.
"Both economies are complementary. Colombian citizens will benefit because
our exports will increase; there will be more investment for infrastructure, for
industry, for rural development, in short, more opportunities ”.
General benefits:
The FTA opens for Colombia the largest market in the world in goods and
services, with more than 300 million inhabitants.
The treaty creates a stable long-term framework, promoting national and
foreign investment in Colombia. Likewise, it is a permanent instrument that,
unlike the Atpdea (for its acronym in English), does not require periodic
renewals and, therefore, provides stability and predictability in the rules of the
game for trade in goods and services between the two countries.
This means that Colombian companies will be able to develop long-term
business plans and make the necessary investments to take advantage of
opportunities in the US market.
Multiple studies show the positive impact of the agreement on economic
growth, increased exports and the generation of quality jobs. According to the
Government of Colombia, GDP will grow between 0.5 and 1 additional
percentage point each year. Likewise, the unemployment rate will be reduced
by one percentage point and 500 thousand additional jobs will be created
within the next 5 years.
The sectors with the highest growth potential include clothing, textiles, leather
products, metal products, vegetable oils, fruits, vegetables and services. There
are also significant opportunities for beauty and agro-industrial products.
With the FTA, Colombian families will be able to enjoy a wider variety of
product options at more competitive prices, increasing their purchasing power.
The United States is the main destination for Colombian exports, with a
38percent share in 2011. The FTA guarantees total and permanent tax relief on
all Colombian merchandise exported to that country.
The FTA guarantees greater access for the Colombian productive apparatus to
the acquisition of capital goods, mainly machinery and equipment imported
from the United States, by immediately eliminating the vast majority of tariffs
(between 5 and 20 percent). The effect will be an increase in competitiveness
for the entire national productive apparatus, both industrial and agricultural,
and a special benefit for small and medium-sized enterprises.
ADVANTAGE:
The advantages of signing this agreement are that for Colombian companies
there is the possibility of exporting their products to the north of
the American continent, thus benefiting the agricultural sector mainly,
the industrial sector, services and SMEs; On the other hand, having the tariff
benefits will enter the country all kinds of merchandise at very low cost, thus
harming the trade sector
ccess To Wider Markets: Fundamental for small business.
Access to products of higher quality and lower price.
Contact with technological and scientific advances.
Better salaries and quality of employment.
It opens us the doors to the largest market in the world.
Consolidates ATPDEA preferences and covers the whole tariff universe.
It is binding because it will reduce insert.
It involves lower cost of goods and capital imports.
DISADVANTAGES:
Among the disadvantages, it can also be considered that many products will
enter the country, trying to replace the one already manufactured, thus
generating loss and tax-type disturbances by not harboring those taxes for
imports, small companies will not have the ability to compete internationally
causing that are stagnant and limiting themselves to the manufacture of
products only for the few local clients that may remain, the productive sector
will also be harmed by not receiving the expected support for both the
cultivation and harvesting of their products, thus achieving economic losses due
to the do not buy from your farm. The first sector will be affected, since the
Colombian countryside is not fully industrialized to be able to compete against
agricultural products from the United States, nor do they have enough
production and quality mechanisms. Colombian peasants do not have enough
educational capacity to respond to the demands that will be made of them.
We are also at a complete disadvantage with the US country side, since it has
totally protectionist policies in its favor in its different economic sectors, they
generate lower costs for its products.