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Evidence 14: Colombia’s 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.

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.

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

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.

This evidence must be sent in Microsoft Word or PDF format through the virtual
learning platform, as follows:

1. Click on the title of this evidence.


2. Click on “Examinar mi equipo” and look for the previously saved file.
3. Leave a message to your tutor (optional).
4. Click on “Enviar”.
DESARROLLO

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