Colombia’s Economic Integration

 Colombia’s biggest ally and why:

After independence from Spain, the United States formed diplomatic relations with Colombia in 1822.
Colombia is a middle-income country and one of Latin America's oldest democracies. The United
States and Colombia share a determination to promote stability, development and democratic
governance in Colombia and across the Western Hemisphere. With the help of the United States, over
the last 20 years, Colombia has transformed itself from a fragile state to a vibrant democracy with an
increasing market-oriented economy. In 2016, the Government of Colombia reached a peace
agreement with the Revolutionary Armed Forces of Colombia (FARC) to put an end to more than half
a century of war. The United States strongly supports Colombia's efforts to ensure the just and lasting
peace that the people of Colombia deserve and to make the promise of security and economic
opportunity a reality for the citizens of Colombia.
The United States is committed to working with Colombia to dismantle transnational criminal
organizations whose operations, in particular drug trafficking, are detrimental to the people of
Colombia and the United States. Their programs concentrate on enhancing licit economic
opportunities; building and upgrading key infrastructure; and combating criminal activities, including
drug production. Their cooperation involves collaboration on research, cultural and sport exchange
programs as well as on social inclusion initiatives affecting African descendants and indigenous
groups in both countries.

The US government supports Colombian efforts in the conflict transition towards peace by operating
in Colombia's most challenging and ignored rural areas, where there have been recent converging
violence, the lack of the government and the lack of legal economic opportunities. U.S. programs
include funding Colombian government initiatives: introducing land reforms in Colombia; helping
and protecting vulnerable populations; growing educational opportunities; investing in private and
public resources; rehabilitating former fighters; and respect for human rights, social integration and
the rule of law.
 Colombia’s primary export/import and to which country:

The international trade in Colombia represented 34.9% of Colombia's GDP in 2017. Over the last
ten years, foreign trade has risen five times in the region. It makes Colombia's economy the 53rd
most complex in the world, according to the Economy Complexity Index (ECI). The growth of
international trade is due in part to the many trade relations with other countries. The free trade
between Colombia and the USA in 2012 saw a major trade increase with North America. That
same year, Colombia and Chile, Mexico and Peru formed the Pacific Alliance. The aim was to
establish commercial ties with emerging Asian markets in Latin America.
The United States, China, Germany, the Netherlands and neighboring Mexica, Brazil, and Panam
a are now Colombia's main trading partners.

Top Colombia Exports

Colombia is the world's fiftieth biggest exporter. Colombia exported $41.8 billion worth of goods
worldwide in 2018. It is a 10.6% increase compared to the previous year. In North America, the
bulk of exports were offered, followed by Latin America, Europe, Africa, then Asia and Australia.

The following are Colombia’s top 10 export commodities.

1. Crude Petroleum and Coal Briquettes

2. Coffee and Spices
3. Gems and Precious metals
4. Plastics
5. Live Trees and Cut Flowers
6. Fruits and Nuts
7. Steel and Iron
8. Vehicles
9. Waxes and Animal and Vegetable Oils
10. Sugar and Confectionaries
 Top Colombia Imports

A total of $51.2 trillion was imported from Colombia in 2018. This has been 11.2% higher than i
n 2017. The North and Asian countries each received roughly one third of their total imports, led 
by European, Latin American, and African exporters.

Listed below are Colombia’s top ten commodity imports.

1. Machinery and Computers

2. Other Electronics
3. Automobiles
4. Refine fuels
5. Plastic products
6. Pharmaceuticals
7. Organic Chemicals
8. Iron and Steel
9. Cereals and grains
10. Medical and other Technical equipment

 Colombia and Trade Blocs:

Colombia has been a member of the Andean Community since 1969, a free trade agreement with
Bolivia, Ecuador and Peru. In April 2011, Venezuela left the Andean Community. In 2011 and in
October 2012 a new framework for promoting limited trade ties was negotiated. For Mercosur
(Brazil, Argentina, Paraguay and Uruguay), the Andean Group signed in 2005 a free trade deal.
The government of President Santos has vigorously pursued trade liberalization initiatives. The
FTA between Colombia and the United States came into force on 15 May 2012. Colombia has
numerous FTAs with different countries or bodies, including El salvador, Guatemala and
Honduras, Canada, Mexico, Chile, the European Free Trade Association (EFTA) and members of
the European Union. In February 2013 the Colombia FTA had been signed by South Korea; in
 May 2013 Costa Rica; in June 2013 by Panama and in September 2013 by Israel. These FTAs are
not yet in place.

Colombia also has bilateral investment agreements (BITs) with Switzerland, Peru, and Spain to
promote trade and investment, and has included investment protection chapters in FTAs with
Chile, Mexico, Canada, EFTA nations, El Salvador, Honduras, Guatemala and the United States.
Investment protection chapters have been included. Certain BITs with China, India and the
United Kingdom were negotiated.

 Advantages to Colombia due to trade blocs

1. As trade barriers collapse, producers compete directly in various countries. That pushes them 
to be more competitive so that their market share is retained or increasing.
2. For customers, this is a good deal, as foreign products are becoming more available and cheaper.
3. Competition lowers prices, allowing consumers to buy products with better quality their 
money. As prices fall, Consumers buy more, boosting the economy.
4. Different countries have different assets, such as trained staff, access to raw materials or 
plenty of agricultural land. A trading bloc partner will concentrate on what it does best in 
realizing that it can market its goods to other countries.
5. Specialization allows large enterprises to build economies of scale which increase their ef
ficiency.
6. Trade and sales growth will contribute to employment growth.

 What does Colombia have to offer to its partners

1. Lower income tax in comparison to companies in the National Customs Territory (TNA)
While in the free trade zones it’s 20%, it’s 34% in the rest of Colombia.
2. No VAT or tariffs on goods imported from the free trade zones.
3. No VAT on raw materials sold from anywhere in Colombia to partners of the free trade
zones.
4. Companies in the free trade zones can conduct their business without any requirements to
make customs declarations.
5. Goods sold in any part of Colombia only ensue VAT on the imported inputs.
 Other trade benefits to Colombia’s partners

1. Crude Petroleum and Coal Briquettes

2. Coffee and Spices
3. Gems and Precious metals
4. Plastics
5. Live Trees and Cut Flowers
6. Fruits and Nuts
7. Steel and Iron
8. Vehicles
9. Waxes and Animal and Vegetable Oils
10. Sugar and Confectionaries

 Economic Integration level in the Andean Community

The Andean Community, which Colombia is a part of, is primarily a free trade area (FTA). A
trade bloc of four nations is the Andean Community-Bolivia, Colombia, Ecuador and Peru.
Participating Countries include Chile, Argentina, Brazil, Paraguay, Uruguay and Panama, Mexico
and Spain. CAN's head office is in Lima, Peru. For the period 2011–2012, Colombia took over
the Pro-Tempore Presidency of the CAN.
The Trujillo Treaty designated the Agreement the Andes in 1996. The Board of the Cartagena
Agreement was also turned into the General Secretariat in Lima, Peru, with not only political but
also technical responsibilities giving the integration process a new political direction. The Andean
Passport was established in 2001, which permits citizens of Member States to travel without a
visa between countries. The unification of the Latin American and Caribbean areas took
precedence on the Andean Community's agenda in 2005. Since Peru was fully incorporated, the
Andean Free Trade Area came into effect in 2006.
The following issues are addressed by the CAN community:

• Trade in Goods
• Trade in Services
• Customs Union
• Circulation of Persons
• Common Market
• Common Foreign Policy
• Border Development
• Social Agenda
• Sustainable Development
• Economic Policies