ACTIVIDAD DE APRENDIZAJE 11 EVIDENCIA 3: ENSAYO “FREE TRADE

AGREEMENT (FTA): ADVANTAGES AND DISADVANTAGES”

APRENDIZ: Esteban Ramos Garcia

INSTRUCTOR:
Jose Yesid Gutierrez Guerrero

SERVICIO NACIONAL DE APRENDIZAJE (SENA) PROGRAMA

DE NEGOCIACIÓN INTERNACIONAL MODALIDAD VIRTUAL
2022
 Actividad de aprendizaje 11 Evidencia 3: Ensayo “Free Trade Agreement
(FTA): advantages and disadvantages”

Es de suma importancia en este proceso de aprendizaje, conocer muy bien los tratados de
libre de comercio que se tienen en un país, antes de iniciar cualquier operación de
importación y/o exportación.

Para desarrollar esta evidencia es importante que lea y analice previamente el material de
formación denominado The sentence, además del siguiente material complementario:

English sentence structure and entity-relationship diagrams.

Sentence structure

Posterior a estas lecturas, elabore un ensayo en inglés de mínimo tres (3) páginas,
que dé respuesta a lo siguiente:

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.

Desarrolle esta evidencia con la herramienta de su preferencia y envíe el archivo al

instructor a través de la plataforma virtual de aprendizaje.
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, that increase their productive
capacity and have a stability intime 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 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.

"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 38 percent
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

 ACCESS TO WIDER MARKETS: FUNDAMENTAL FOR SMALL

BUSINESSES.

 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
sufficient 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 countryside, since it has totally
protectionist policies in its favor in its different economic sectors, they generate
lower costs for its products.