Colombia’s exports to US drop 13% after US-Colombia Free-Trade Agreement

[ErikJ]

Source: Colombia Reports




While the governments of Colombia and the U.S. celebrate the first anniversary of a free trade agreement between the countries, government statistics show there is little to celebrate for Colombian exporters who saw exports drop 13%.
According to Colombia’s statistics agency DANE, Colombian exporters sold a total 0f $16.8 billion in products and services to U.S. importers between June 2012 and March 2013. The year before this was $19.2 billion.


The drop in exports is contrary to promises made by the Colombian government. Days before the implementation of the free trade agreement on May 15 last year, Trade Minister Sergio Diaz-Granados said his ministry estimated a 10% increase in exports to the U.S.
While Colombian exporters saw their sales drop significantly, American businesses seem to have been able to benefit from the trade pact. Imports from the U.S. went up 15% between June and February.

The trade pact between the two countries took more than six years to be ratified as labor rights workers, U.S. unions and U.S. President Barack Obama’s own Democratic Party opposed the treaty over labor rights violations in Colombia.
Colombian opponents of the then-proposed pact told Colombia Reports that the country’s labor rights situation was a false argument and weakening the South American country from bargaining a good deal with its much larger trading partner.

U.S. Acting Secretary of Commerce will be in Colombia’s capital Bogota Wednesday to celebrate the first year of free trade between the two trade partners.

Read more: http://colombiareports.com/colombia-exports-to-us-down-13-after-implementation-fta/

[davidpdx]

1. There could be a many different reasons for this

Last edited Tue May 14, 2013, 08:10 AM - Edit history (1)

Colombia's economy is transitioning from the reliance on plants used for drugs to other agricultural products. Violence between groups has finally died down over the past few years allowing them to focus more of commerce. You can't have a stable economy with a civil war going on.

The country is divided in so many ways geographically it is difficult to move things around. Some areas can only be reached by plane. Infrastructure needs to be improved, but at the same time there are ecological dangers (the rain forests which have already seen devastating damage). On the flip side they are getting very cheap gas from Venezuela which helps them commerce wise, but again causes ecological damage. Fique is one of the things Colombia has been planting more of.

If anyone hasn't seen it, I highly recommend the episode of Anthony Bourdain Parts Unknown from a couple of weeks ago which was on Colombia.

[carla]

2. The real, effective reason

has nothing to do with your "analysis". The drop in exports has ZERO to do with Colombian infrastructure, fragmentation, civil war,geographic difficulties. If you have been paying attention then you would know that ALL FTAs have had the same effect on the smaller economy. FTAs are not about free trade, they are about corporate dominance of the smaller economy. FTAs DO NOT WORK. I know this first hand and have seen the effects in many lands.And the country's name is spelled Colombia.

[davidpdx]

3. FTA lower tariffs and other trade barriers increasing efficiency

of cost and lowering prices. For example, South Korea has a tariff rate quota on rice. Up to a certain amount of rice imported has no tariff (I have no idea how many tons it is because it changes per year), after that a tariff is applied raising the cost of the rice.

Protectionism is what doesn't work. It is inefficient and raises the cost of goods. FTAs are not all about corporations, they affect small and medium sized businesses as well in both countries.

[CanSocDem]

6. "...not all about corporations..."????

Are you kidding me? Do regular citizens get to vote on "tariffs" and "trade barrieres...."

No they don't. Not even when they are directly affected like the 13% of the producers who are no longer able to sell their products to the USA.

Like the poster who you are responding to, I have experience of having to deal with the consequences of my corporate-controlled government choosing to go into a trade deal with the corporate-controlled government of the USA.

"Protectionism" seems to be working fine for your country even if it is misnamed as "FreeTrade".

.

[pampango]

8. ""Protectionism" seems to be working fine for your country even if it is misnamed as "FreeTrade"."

'Free trade agreements' are not all created equal? Some can actually represent 'protectionism'? I have not seen that view posted voiced here before and quite likely very accurate. Quite often people seem to think that all FTA's result in totally tariff-free, regulation-free trade like between American states. That is never actually the case.

[Freddie Stubbs]

4. This one seems to be working pretty well for the US

[formercia]

7. The US has more products to offer the Colombians

Than the Colombians have to offer the US.

Just think, Colombia can now compete with Guatemala and Bangladesh for low tier manufacturing jobs.

It's all about more profit for Multinational Corporations.

[geek tragedy]

5. The Colombia-US FTA seems to be working for American

companies and workers, IF those numbers are to be believed.

[Catherina]

9. FTA With USA Has Harmed Colombia, Senator Says

FTA With USA Has Harmed Colombia, Senator Says

Bogota, May 13 (Prensa Latina) A year after the Free Trade Agreement (FTA) with the United States came into effect, the balance for Colombia is negative: we export less and import more, affirmed senator of the Alternative Democratic Pole Party Jorge Enrique Robledo.

...

Robledo underlined the existence of three pressing topics: stop the FTA negotiation, renegotiate or denounce the already signed agreements and implement a state-backed policy for national agriculture and industry.

During his analysis, published at the Senate's website, the legislator quoted reports from the U.S. Department of Agriculture, which show that from June 2011 and March 2012, when the FTA had not yet come into effect, Colombian agricultural imports reached 1,042,914 tons.

According to the United States Census Bureau, the sales of Colombian products to the U.S., 10 months after the FTA was implemented in March 2013, dropped 18 percent in comparison with the same period in 2012.
However, products imported from the U.S. increased 9.31 percent, proving that the FTA has damaged the trade balance between both countries.

http://www.plenglish.com/index.php?option=com_content&task=view&id=1407291&Itemid=1