ACTIVIDAD DE APRENDIZAJE 11

EVIDENCIA 3: ENSAYO – FREE TRADE AGREEMENT (FTA): ADVANTAGES

AND DISADVANTAGES -

LESLY YULIANA CARRILLO CARRILLO

FICHA: 2281749

INSTRUCTOR:
EDWIN ALEJANDRO MARTINEZ AGUIRRE

SENA – SERVICIO NACIONAL DE APRENDIZAJE

TECNOLOGO EN NEGOCIACIÓN INTERNACIONAL
VILLAVICENCIO – META
JUNIO 22 de 2022

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 TABLE OF CONTENTS

1. Introduction.................................................................................................................3
2. Tial..............................................................................................................................4
3. Conclusión..................................................................................................................8
4. Bibliographical references..........................................................................................9

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 INTRODUCTION

The following evidence is important because it talks about the free trade agreements
between Colombia and the United States, which makes it very important because thanks
to these agreements Colombia has been changing its economy in a small percentage with
its exports of coffee, flowers and other various things, as well as knowing the
consequences that led to this treaty.

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TRIAL

Free Trade Agreements have become a fundamental strategy of the Colombian state's trade
policy, so much so that more than fifty have been signed in recent years. The Ministry of
Trade, Industry and Tourism has even developed a page focused solely on FTAs. In the
international context, it is one of the mechanisms that multilateral organisations such as
the World Trade Organisation (WTO) recommend to developing countries in order to
reduce poverty.

In the last decade, Colombia's foreign trade policy has been based on deepening trade
relations with the Andean Community and on efforts to obtain unilateral access to
certain markets, especially the United States, through the ATPA/ATPDEA schemes, and
the European Union, through the GSP scheme.

Due to the growing gap between exports and imports, the latter being the majority for
Colombia, there is a clear need to promote important changes in trade policy, such as
finding new markets, and for this it is important to move forward without delay towards
the signing of free trade agreements such as the one that was decided to negotiate with the
United States.

After the last extension of the ATPDEA in 2010, which ended on 15 February 2011, the
FTA with the United States is seen as a possibility for businessmen to make long-term
investments, increase their productive capacity and enjoy stability over time and
favourable conditions for exports.

During this time, exports of non-mining and energy goods grew by an average of 4.8%
annually, and if sales in 2021 are compared to those of 2012, the growth is 53.4%. They
went from US$3,415 million in 2012 to US$5,239 million.

Sales to that market, specifically non-mining sales, have increased year on year with the
exception of 2020, which was the year of the pandemic. Today Colombia is the United
States' third largest trading partner for goods in South America, while the United States
is

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the largest buyer of the goods and services it exports and one of the largest investors
in Colombia.

In turn, Colombia is the main supplier of products such as carnations, chrysanthemums,

roses, fresh cut flowers and buds for bouquets, lilies, and unroasted and non-decaffeinated
coffee.

While the balance of these first 10 years is positive and we have taken advantage of this
instrument, there is still plenty of room to exploit the opportunities that this market of
some 320 million consumers continues to offer.

This agreement has complemented, strengthened and boosted trade relations, allowing
close to 11,500 Colombian products to enter the US market with tariff preferences by 2022,
which accounts for 30% of Colombia's total exports of goods and 40% of its exports of
services.

Colombia is one of the 14 countries in the world with which the United States has an FTA
in force, and is South America's third largest supplier.

According to an analysis by Pro Colombia, the export basket has diversified and the non-
mining energy and services sectors gained a share of 10 percentage points, from 40% to
50% in 2021. In 2021, non-mining exports totalled US$5.239 billion, 25% more than in
2020, and between January and February 2022 they reached US$1.064 billion, 39%
more.

In terms of sanitary diplomacy, the interlocution as partners under the umbrella of the
FTA has allowed the technical agencies of both countries to have a more fluid
interlocution, which has made it possible to fulfil admissibility processes that for
Colombia mean access for around 100 agricultural products to the US market.

With the aim of continuing to diversify the non-mining export basket, the Ministry of
Trade, Industry and Tourism, together with Pro Colombia, is developing proactive
actions that seek to consolidate Colombia as an export hub for more products and
services.
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What opportunities does the Colombia-US FTA project for the future?

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Colombia has the best negotiation in Latin America in terms of rules of origin, the lowest
amounts of local added value required for a product to be considered of Colombian origin,
so all this need that the US has lately for suppliers closer to their country could be supplied
by us, we can have adequate value proposals for many international companies to use
Colombia as an export base.

The other opportunity lies in the agricultural sector: the US is a large net importer of all
kinds of agricultural products and Colombia has an impressive agricultural production
capacity, as we have begun to see with the Hass avocado, with Tahitian lemons, with palm
oil, and now that food prices have risen so much, by God! We have production capacity and
what we need is a bit of organisation of our agricultural production, to send clear signals to
these investors, to give them a boost to the country's tertiary roads, to lower the country's
cost of exporting these products.

Within these actions, the articulated work between the different actors that connect the
Colombian offer with the American businessmen, adapting it to the requirements of the
demand, stands out; likewise, and for the achievement of this objective, it seeks to
deepen in different distribution channels such as e-commerce.

In addition to the 10 years, the two countries are celebrating 200 years of bilateral
relations, which is why the Colombian Embassy in Washington held a commemorative
event on May 10 with Pro Colombia, the Ministry of Commerce, Industry and Tourism,
and U.S. businessmen.

By virtue of free competition, consumers have access to a variety of products and

better prices.

Diversification of export supply and export markets.

The longer trade agreements are in force, the more companies take advantage
of them.
Stability in tariff preferences, no longer relying on unilateral,
discretionary preferences subject to periodic review.

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 Free trade agreements, together with other economic measures, can contribute
to employment generation and increased foreign direct investment.
They facilitate the movement of people for both business and tourism.
In terms of taking advantage of the opportunities arising from free trade
agreements, Procolombia has been working on this through its commercial
offices in Colombia and in several countries.

As for the disadvantages, we can say that some sectors of national production may be
affected by the signing of free trade agreements as they open up to international
competition; however, in the negotiations, the national government, headed by the Ministry
of Trade, Industry and Tourism, has been very judicious in listening to and working hand
in hand with each of the trade unions, to agree on the necessary protection measures,
establishing for imported products baskets of relief according to the sensitivity of the
production chains and for exports, verifying effective access to markets, through rules of
origin and the elimination of non-tariff barriers.

Disappearance of domestic production.

Competition with imported goods.
Cheap
labour.
Lower
wages.
Decrease in state resources.

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 CONCLUSION

With this evidence it was determined that the free trade agreement that Colombia has with
the United States has produced an economic improvement for the Colombian country, but
it was also determined that these implementations of export and import have generated
many unfavorable factors for the country.

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 BIBLIOGRAPHICAL REFERENCES

 https://www.linguee.es/
 https://www.ego4u.com

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