EVIDENCE 10: ADVANTAGES AND DISADVANTAGES OF IMPORTING

AND EXPORTING IN / TO COLOMBIA

PRESENTADO POR:

CLAUDIA GUERRERO

PRESENTADO A:

JOHAN OSPINA

SERVICIO NACIONAL DE APRENDIZAJE SENA

FORMACION TITULADA VIRTUAL
TECNOLOGO EN NEGOCIACION INTERNACIONAL
BOGOTA
2017
Evidence 10: Advantages and disadvantages of importing and exporting
in / to Colombia

To talk about the advantages and disadvantages of the export and import in
Colombia we have to talk about what is current the free trade agreement or FTA
which is not only in Colombia but in many countries of the world.

In the last few days there has been much talk and speculation on the issue, as
Colombia, Peru, Ecuador and the United States are in the process of signing an
FTA. What transcendental is that the country has begun the strategy of the
internationalization of the economy, from this treaty. According to the
government, this tactic is the only one that will serve for the Colombian
economy to grow and develop optimally, since in the last decade it has not
grown or its growth has been little.

According to experts from Colombia, such as Mauricio Rodrguez, Juan Camilo

Restrepo, Hernando Gmez Buenda and others, the FTA is something that
Colombia has to do, otherwise other countries that also produce and export the
same as us will arrive. We "steal" the market, condemning us to
underdevelopment. Sooner or later Colombia will come to establish economic
pacts in this country or with other countries of the world; The fundamental thing
is that you can not miss an opportunity of these, since the first of the countries
that arrives to the United States, through an FTA, will be the colonizer that will
control the market and will know better than the others. In addition, ours is a
medium-sized economy that needs to open its doors to other countries, to
achieve a development, and if it does not with its internal economy, it can not
survive.

The United States is a country of 285 million people, with $ 35,000,000 per
capita income, which represents a great purchasing power. It is also a very rich
market and one of the largest and most dynamic in the world, in which
Colombia can sell, negotiate and export innumerable products, which will
generate a better level of economic and social development for our country.
Colombia is not a great threat to the United States in political and economic
matters, since the total production of our country is only a quarter of the
production of them. We are irrelevant in the impact that we can cause to its
productive apparatus, reason why, economists consider that united states, will
be generous with us in this agreement that is trying to sign.

What has to be kept in mind is that Colombia is totally disadvantaged with

respect to the United States, since it has a greater capacity of competition and
production in the sectors where our country is more dynamic. But in this way,
Colombia also has sectors in which it can compete with its main ally and rival,
such as: fruits, vegetables, footwear, textiles, etc. Although Colombia may have
advantages and certain competitive options, as mentioned above, it has a great
disadvantage represented by the great gap between a developed country, or
rather a world power, and a developing underdeveloped country such as ours.
The main cause for Colombia's ability to compete with other developed or
developing countries is that it does not have a state that makes full presence in
its territory, added to this the great problem represented by the presence of
insurgent groups, The lack of interest in our nation or the lack of nationalism,
and many other factors that prevent Colombia from being an integrated nation-
state as such, factors that the United States does not have.

Another disadvantage for Colombia is the little infrastructure it has to control

and make a treaty of these characteristics, such as ways to transport products,
ports, machinery, bridges, railways, warehouses, plant capacity of companies
and many Others that are needed to compete with the United States.

In addition, in order to be able to enter this trade on an equal footing, a radical

social change in production, competitiveness, protectionism, education, quality
of processes and improvement of the judicial and mercantile system must be
carried out in the country. With this agreement the demands will be greater,
requiring a more effective and effective response in these fields.

Today, the main concern with the opening of the Free Trade Agreement is the
different negative repercussions, especially on two sectors of our economy: the
agricultural field or system and SMEs (small and medium-sized enterprises) .

The first sector will be affected, since the Colombian field is not totally
industrialized to be able to compete against the agricultural products of the
United States, nor has the sufficient mechanisms of production and quality. The
Colombian peasants also do not have sufficient educational capacity to respond
to the demands they are made. In addition, we are at a complete disadvantage
with the American field, since it has in its favor purely protectionist policies in its
different economic sectors; Generates lower costs for its producers and
therefore a greater threat for our peasants.

SMEs, the second sector, will be affected due to the low productivity, the low
quality and the high costs of production that characterize them, which prevents
them from competing in a highly specialized market, leading them to their
imminent disappearance, which Is very dangerous, since they generate more
than 80% of employment in the country.

The serious thing is that Colombia does not have a protectionist policy, which
clearly affects peasants, generating unemployment in the countryside. Neither
is there a vision of the disasters that can be generated internally and how to fix
them, when the FTA is underway: the unemployment generated by the demise
of SMEs, the total lack of state protection for the peasants, the mass
displacement of peasants or The population affected, who are looking for work
or better opportunities in the cities, since in the rural areas they did not benefit
from the treaty; The common violence that is generated due to these factors; It
will then bring unemployment, famine, homelessness, etc.

However it must be recognized that the government is not doing all this blindly:
it is preparing to achieve a GOOD NEGOTIATION. To this end, the Ministry of
Foreign Trade has taken the reins of the process, counting on the invaluable
accompaniment of qualified private sector entrepreneurs. Thus, it is sought that
the interests of the country are not affected, that the treaty serves to improve
the economy and not to destroy it and that there are no negative consequences
especially for the agricultural sector and SMEs.

Within the negotiation is discussing the problem that is presented with visas;
This is a very important aspect and must be taken into account, because it is
always a "torture" for Colombians to achieve this document and thus be able to
enter the country of freedom and opportunities. This, even if it seems routine or
normal, is something that should be paid attention to, because if Colombian
merchants do not have the visa, it will be impossible to establish market
relations and market their products in the north country, because in The
principles of the market, or with just rationality, it is known that if there is no
presence of the negotiators can not give economic opening. It is paradoxical
that the Americans could enter our country, as if it were the garden of their
house and we have vetoed, for reasons that is not the case, the simple entry
into their territory. This creates an act of inequality in the negotiation, they can
trade and generate profit, taking advantage to have a greater advantage over
our country. In conclusion, if there are no visas for the merchants, there are no
businesses and therefore we can not capitalize on those virtues of the FTA.

When talking about the Free Trade Agreement, it is realized that with it there
were no tariff barriers, or there would be very low taxes, which would achieve a
trade between countries without restrictions, and the disappearance of
contraband. Although there would be no tariff barriers with the treaty, there will
be some non-tariff or phytosanitary calls which will prevent many Colombian
products from entering the United States. This is due in part to US
protectionism, since they believe that products such as meat can filter out lethal
diseases, such as mad cow disease and foot-and-mouth disease, porcine pigs,
chicken flu, Pests and fungi that can come with plants, diseases that would
generate a crisis of great proportions in that country. But not only the United
States has these barriers: Colombia also has these barriers.

The problem is that the United States could not prohibit the entry of some
Colombian products, including meat, poultry, and different fruits and vegetables.
Arguing that these products have phytosanitary barriers, and that is why they
will not allow entry to their country, which would detract from the advantages of
a positive economic increase for Colombia, since there would be very few
products that would actually be marketed.

There is another aspect worth considering in terms of tariffs: Colombia had

previously established tariff reduction pacts, such as the FTAA or APTDEA - in
which Colombian products no longer have tariffs or have very low taxes, but
which in the Treaty Of Free Trade are being re-granted as if they had tariff
barriers, in other words, they are giving us advantages in this treaty, which we
already had. For example, in the FTAA, for Colombian textiles, 20% Of taxes:
for the entry of this product in the United States, and in the FTA, the same rate
of rebate is being re-granted, and in reality they are not offering us any real
benefits.
Another concern is that the United States is committed to the fact that there are
no state companies in our country, among which are Telecom, Empresas
Publicas de Medelln, ECOPETROL, among others, because they do not agree
with the US capitalist system, since according to them There would be no
competition governed by the law of supply and demand.

They argue that national companies would not be able to negotiate freely, since
they are linked to national legislation and so things would present personal
political interests and this would not achieve the propitious interest for the FTA,
while private companies are free Total, its economy is based on the laws of
supply and demand, and the managers of these do not have to request
authorization to make their commercial decisions. Thus they would be fully
capitalizing on our economy, their political interests in our country could be
brought to perfection, and they would not have the barrier of a mixed system
that they consider obsolete, and that operates in Colombia. With this they intend
to enter our country with total freedom.

Finally, NAFTA is considered as a very important step that must be taken in

order for Colombia to be able to adjust to the accelerated pace of the new
world, especially in that of globalization. Failure to do so would be doomed to
poverty and underdevelopment. But this should be looked at objectively. It can
not be expected that once the treaty is signed it can be started immediately.
The government knows this and asks for time and deadlines of up to 10 and 12
years, in which it will be able to reorganize its society, train it, train it, improve
infrastructure and all those gaps it has, in order to compete with the United
States, Economic interests of the two are matched and meet their expectations
under the premise of "win, win".