Evidence 14: Colombias performance in importation and exportation

1. Make a comparative chart in English of the Colombian performance in

importation and exportation, before and after signing the FTA with the USA.

SOLUTION

Prior to the Free Trade Agreement (FTA) with the United States, Colombia was
already managing agreements with other countries, its performance was as
follows

EXPORT IMPORT
Free and immediate access for Free access immediately
88% of the agricultural area 62.6%
Consolidated SGP Partial concessions with
Partial concessions, with annual deductions
preferences on MFN tariffs between 5 and 17 years
sometimes within WTO quotas For some products the
For some processed special price mechanism
agricultural products preference is maintained
no less favorable than those Quotas are applied for
granted in 2008 to the EU cheeses from
Exclusion of some poultry, dairy Switzerland
products and various Exclusions of some oils,
chemicals. dairy products, cattle
dogs, hides and skins.

COLOMBIA AFTER THE FTA WITH THE UNITED STATES

Each of us has to become a pedagogue of the Free Trade Agreement. An effort

of 22 months of negotiation, which represents a great opportunity and a
challenge for our country.

This is one of the first treaties, or perhaps the first, signed by the United States
where it accepts that the other country has a letter of protection of the
environment and where it gives the other country a great possibility of
advancing the phytosanitary issue.

The closing of the negotiation of the Free Trade Agreement between Colombia
and the United States represents a great success of the trade integration policy
with the world, which has been advancing the Colombian government, with the
FTA, Colombia obtains permanent preferential access to the States United
States, which is in addition to what we already have in Mexico and the countries
of South America.

2. Consider the duty rates and exportation costs by analyzing if those have
presented any increase, decrease or disappearance after the FTA came
into force.
SOLUTIN

The effects on production, demand, import and employment for the Colombian
maize agricultural product are quantified, based on the estimations of the
system of supply, demand and maize import equations through the integration
analysis and the vector model Error correction (VEC), using information data
from 1966-2005. The results of the econometric model indicate that the
estimated supply has the expected signs and is inelastic with respect to the
domestic price of maize and the costs of the production inputs and is elastic in
relation to the area harvested. The estimated demand shows the expected
signs and is inelastic with respect to the domestic price of maize and per capita
income available, and is elastic in relation to the international price of maize and
the international price of sorghum. Maize imports have an elastic behavior with
respect to the international maize price and per capita income available, and
inelastic in relation to the real exchange rate. For the analysis of social net
welfare, the draft text of the NAFTA negotiation and current imports were taken
into account, which allowed for two scenarios: first, the national price of maize
would be reduced to the level of the international price (at 29.06 %), Where the
net welfare of the corn market would improve by US $ 31.62 million per year.
According to the scenario, the domestic price is considered tariff elimination by
excess imports, where the domestic price decreases by 23.76%, this would
generate an improvement in the net social welfare of the corn sector of US $
20.44 million annually. The decrease in maize production would lead to losses
of harvested area, employment and labor income for scenario 1 of
approximately 31%, and for scenario 2 of about 28%

3. After doing this analysis, make a projection chart of what you think it will
happen with exportations in Colombia in the next years.

SOLUTIN

The argument against these agreements is that they are flooded to the country
of foreign products that arrive without tariffs or with reduced tariffs, with the
aggravating one that they come from developed countries like EE. UU. Or of the
European Union as a whole, which subsidize their producers,
Allowing them to export at prices below their production costs: something
Colombian peasants can not compete with
Numbers support this claim. According to data from Top Ten, monthly
publication of the SAC, total imports of potatoes in 2011, for example, totaled
15,224 tonnes, which rose to 19,128 in 2012. In both cases, the largest supplier
was Holland; Of Belgium brought in 2,238 tonnes, 4.4 times more than a year
ago. However, in no case has this increase been related to the FTA signed with
the EU (to which the two countries belong), since it began to govern less than
40 days ago.
Imports of potatoes from the United States The country with which we have a
year and four months of FTA, also increased by 211 tons in 2012 (they reached
a total of 4,407), but decreased the purchases of the tuber to countries like
Argentina.

To do this evidence, read the following supplementary material:

The U.S.-Colombia Free Trade Agreement: Background and Issues.

Compliance Guidelines: How to Develop an Effective Export
Management and Compliance Program and Manual.
Taxation and Investment in Colombia 2011 Reach.
A U.S.-Colombia Free Trade Agreement: Strengthening Democracy
and Progress in Latin America.

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