Though still awaiting a verdict on the pending free trade agreement with the United States, the Colombian government and business community are ready to welcome Atlanta trade missions to the country, Juan Carlos Cadena told GlobalAtlanta during an interview in Bogota, Colombia, Aug. 14.
“We have not hosted as many trade missions from the U.S. recently because of the uncertainty surrounding the [Colombia-U.S.] free trade agreement,” said Mr. Cadena, director of commercial relations for the Colombian Ministry of Commerce, Industry and Tourism. “But we are absolutely interested in receiving any business mission from Atlanta or the Southeast U.S.,” he added.
The Colombia-U.S. Free Trade Agreement was signed by both countries on Nov. 22, 2006. The Colombian Congress approved the agreement in 2007, but the U.S. Congress has still not accepted it. Mr. Cadena believes, however, that there is a “small but important chance” that the measure will be approved by Congress this year.
If the FTA is implemented, Colombia will immediately eliminate tariffs on 81.8 percent of U.S. exports and phase out other remaining tariffs. Colombia already has duty-free entry for some 80 percent of its exports into the U.S. under the Andean Trade Promotion and Drug Eradication Act, so the FTA would mainly improve U.S. companies’ ability to export to Colombia, Mr. Cadena noted.
For Georgia exporters, this would be good news, because Colombia is one of the state’s top agricultural markets in South America, Mr. Cadena said. Georgia exports of chicken leg quarters, cotton, peanuts, beef and peaches would enter Colombia duty-free under the FTA. Overall, duties on most U.S. exports to Colombia, which currently face up to 20 percent tariffs, would be eliminated.
Although some Colombian products like poultry, rice and those made from wood would see increased competition, the majority of the Colombian business community is in favor of the agreement, Mr. Cadena said. “For us, it is more about recognition and about consolidation of trade preferences. But it definitely would be good for U.S. producers.”
In addition to removing tariffs, the FTA also includes regulations for investment, intellectual property rights, labor rights and environmental protection in Colombia.
Mr. Cadena cited U.S. domestic political issues and the economic crisis as deterrents in the FTA’s approval during the Bush administration. But the agreement has mainly been stalled because of Congress’ concern about violence and human rights violations against Colombian labor unionists.
Mr. Cadena, a lawyer who worked on behalf of the Colombian ministry in Washington from 2004-2008, was part of the treaty’s negotiating team and did the technical revisions of the FTA text. He continues to work from Bogota to document Colombian progress in reform areas required by the treaty. Working directly with the U.S. Trade Representative, State Department and Commerce Department, Mr. Cadena’s office is putting together a packet of information to present the FTA once again to Congress before the end of this year.
For the Colombian private sector, the agreement is “still definitely a priority,” Mr. Cadena said. He noted that the government and private sector have been working together to protect workers’ rights and prosecute related crimes, such as the murder of union members, violation of contracts and other labor disputes.
“Colombia has a new face to show since three years ago. In terms of workers rights protection and prosecution of rights violations, many advances have been made,” Mr. Cadena said. Although the International Trade Union Confederation reported in July that Colombia remains the world’s more dangerous country for labor organizers, with 49 killed last year, that number is down from 78 in 2006. He was careful to note that the improving numbers do not mean that labor unions’ problems have been completely resolved, but the situation has improved and his ministry has the documentation to prove it. “We are creating a new Colombia,” he said.
The main role of Mr. Cadena’s office is to evaluate the potential for investment and trade with certain countries. He and his team receive notices from Colombian embassies and Colombian businesspeople abroad about potential business and investment leads, and then make the necessary introductions to facilitate business relationships.
Mr. Cadena said many American businesspersons who visited Colombia – recently, for mining, hydrocarbons and services industries trade – visited clients directly rather than using his office as the intermediary. But they have been mistaken to so, he noted, because the office has resources to offer U.S. companies that may help in making trade and investment decisions.
These resources include a better understanding of Colombia’s investment climate. The stability of the rule of law in Colombia, for example, is an important part of the proposed FTA, Mr. Cadena said. Under the treaty, all regulations surrounding an investment, including protection of private property, will be valid for the life of that investment. And security has improved around the country, he added, noting that Washington now experiences more annual crimes per capita than Bogota.
“It’s just a lack of understanding. Once people come here, they gain a different perspective,” Mr. Cadena said.
Some 50-70 members of the U.S. Congress have visited Colombia over the past few years and have had good experiences, he added, which he hopes will help to change the image of Colombia among legislators in Washington.
Colombia is launching a public relations campaign in September that includes giant heart statues, Colombian music and cultural displays in Washington to send a message that Colombia is a good place to visit and do business. While the campaign, which uses the country’s brand slogan, “Colombia is Passion,” is not intended to promote the passage of the FTA, it is expected to help encourage tourism and investment in Colombia, according to Oscar Rueda, Colombia’s vice minister of tourism.
In a separate interview with GlobalAtlanta in Bogota, Mr. Rueda also acknowledged free trade agreements as encouraging tourism. “Without doubt, free trade agreements are generators of tourism,” he said, noting that Colombia currently has FTAs with 11 countries. He said that business tourism is becoming more important in Colombia and that FTAs protect tourism investments in the country. He added that U.S. representatives, who made the 10-15 visits to Colombia during the FTA negotiations, experienced some of the country’s extensive tourism possibilities.
In addition to tourism, the FTA offers benefits for other Colombian sectors that have not been traditional exports, Mr. Cadena said. While coffee, petroleum and flowers have been staple Colombian exports for the past 40 years, additional, less well known services, such as cosmetics production, are now being promoted by the Colombian government.
A recent study completed for the Colombian ministry assessed global demand and found 10 strategic sectors on which the country should focus over the next several years, and which Mr. Cadena said would be positively supported by the FTA. These include business process outsourcing and offshoring, information technology services and software, health tourism, cosmetics and personal care products, biofuels, forestry, automotive industry, electric power, textile/apparel/fashion/design, infrastructure and the graphic communications. These sectors are not only important for trade with the U.S. but with Asia, the Middle East and Africa as well, and are expected to generate jobs and “improve lives of Colombians,” Mr. Cadena noted.
Georgia ranked seventh among U.S. states in total exports to Colombia in 2008, exporting more than $232 million worth of goods, a 27 percent increase over the previous year.
Georgia ranked first in exports of wood pulp, prepared meat, fish, baking items and textile floor coverings last year. Georgia was second in exports of meat, cocoa, salt/sulfur/earth/stone, photography/cinematography, live animals and man-made staple fibers in 2008. Paper products were Georgia’s top single product exported to Colombia last year, and its top exports to Colombia in the first trimester of 2009 were chemical manufactured goods, computers and electronics, paper products and processed foods.
Imports from Colombia into the Savannah Customs District increased 11 percent from 2007 to 2008 to a total of $194 million. Top imports from Colombia include mineral fuel and oils, salt/sulfur/earth/stone, plastic, electrical machinery and spices/coffee/tea.
Mr. Cadena’s team has been busy tracking commercial activity with the U.S. and presenting the necessary information about Colombian reforms to U.S. representatives in hopes of convincing them to approve the FTA. “Then, we’ll just have to wait,” he said of a potential vote by Congress before the end of the year.
Georgia businesses can send written public comments to the USTR about how the Colombia-U.S. FTA (and/or the pending Korea-U.S. FTA) will benefit them. Comments can be submitted electronically at www.regulations.gov before Tuesday, Sept. 15, at 12 noon. Copies should also be sent to KMcInerney@uschamber.com to be shared with members of Congress by the U.S. Chamber of Commerce. For more information about the comments, contact Gloria Blue at (202) 395-3475. To reach Mr. Cadena send an email to jcadena@mincomercio.gov.co
Go to www.mincomercio.gov.com for more information.
