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100 faqs about TLC.
And how many jobs will be generated in each region?
We don’t have an answer to this question as the projections that are available come from entities and institutions outside the Ministry, and the studies do not define regional estimates, only global ones.
The economy is doing well, but the generation of employment is still lacking. Would the FTA itself help on this front?
This is a key point on which there are positive expectations, not only by the Government, but by the private sector: 500 thousand new jobs are expected to be created. The implementation of this FTA will mean a drop of 1 point in the unemployment rate, and 2 points in the informal employment rate of the country. These figures can be achieved with more foreign investment, or improvement in the supply chain. Let us remember that the great generation of employment in modern economies comes from the service industries and commerce, which will be the sectors to be benefiting the most with the FTA.
Is the country in a good moment to embark on this FTA?
For sure. The Colombian economy is going through one of its best moments in recent years, which is a very good situation to materialize this initiative. Also, remember that President Juan Manuel Santos is committed to advancing the implementation of a comprehensive policy to generate wealth for all Colombians, and trade agreements contribute to this goal from different angles: they invigorate trade and production, attract foreign investment, and stimulate tourism.
The health issue is very sensitive. Will there be assistance in this area?
Of course. There will be experts that will strategically work on overcoming obstacles to the export supply in this area. Also, there will be training provided for those seeking quality certifications that will promote a more competitive offer. The strategy: 18 investigations of niche or new products to empower the current export supply.
And in regards to consulting and market research?
Proexport identifies entrepreneurs and businesses in need to strengthen their knowledge on issues related to certification, quality standards, legal issues, phytosanitary and customs volumes. For this, ten international experts on specialized topics of access to US markets will provide technical assistance in sectors such as agribusiness, manufacturing and clothing.
But to reach success, a lot of promotion is required, isn’t it?
That is clear. And that is why, from the standpoint of export promotion, tourism and investment, Proexport is working hard on disclosing the different opportunities that will be available (two-way) to both Colombian and US entrepreneurs. So, we are conducting an extensive program of promotional events that allows closer ties between buyers and sellers, investors and travelers from both countries.
How many activities are planned for this year?
For 2012, we have over 150 events scheduled in 32 provinces and in all 50 US states. With these events, we expect to reach more than 1,500 Colombian exporters and 1,300 U.S. buyers. We are also going to secure more than 15,000 business meetings. Additionally, we plan to further the participation of exporters in 35 specialized international fairs in the US.
As an entrepreneur, where can I find information about the opportunities available for my products or services in the U.S. market?
The Ministry of Trade, Industry and Tourism along with Proexport are leading a series of strategies for the expansion of more businesses, or to open new markets there. As such, we have designed various seminars and business rounds for entrepreneurs from both countries, in order to share their business opportunities, learn access conditions, and requirements of each market.
In the specific case of the Ministry of Trade, Industry, and Tourism, what policies are being advanced to provide assurance to business people?
Along with the necessary legal standards that support the FTA, we have been working on several fronts so that Colombian companies gain in productivity, and that the products and services we offer can compete on equal terms. One of the fronts we are working on is to obtain competitive regulation for Colombia. That is, that our standards do not become an obstacle to business growth. For example, in partnership with the private sector, and the different regions, we have identified 70 regulations that hamper the competitiveness of businesses, which we now intend to remove.
What would you say to those who argue that there wasn´t sufficient preparation from the side of the Government?
With the leadership of the Ministry of Trade, Industry and Tourism, and Proexport, we designed a strategy that is the result of a work that began five years ago. This effort was aimed at developing the productive sector to the opening of trade borders. Three phases were developed: Strengthening, Expansion and Innovation. The purpose of this effort is to provide guidance to entrepreneurs throughout the country who are seeking international business opportunities.
What PTP sectors are most likely to grow with the FTA?
All the sectors that are currently in the PTP will grow with the FTA. These 16 sectors of our economy are working, through a public-private partnership, in the implementation of business plans to build these sectors into world-class players. These sectors include textiles and clothing, fashion and design, auto parts and vehicles, cosmetics and personal care, metallurgy and the steel industry, graphic communication, electric energy and its goods and services, health tourism, nature tourism, BPO&O, software & IT, horticulture, palm and vegetable oils & fats, biofuels, beef, chocolate, confectionery and its raw materials, dairy, and shrimp. Through the PTP, we are boosting these sectors of goods and services, so that Colombian businesses can make the most of the export opportunities that will open up with this FTA.
What specific projects are planned so that Colombia can make the best use of the FTA?
The trade liberalization process that Colombia is undergoing is moving hand in hand with the implementation of industrial policy, one of which is the Productive Transformation Program (PTP), led by the Ministry of Trade, Industry, and Tourism.
What is the purpose of the Achievement Office of the FTA, which was recently created?
This office will help to identify opportunities in the U.S., as well as bottlenecks. It seeks to resolve specific problems and constraints on exports. The focus that we have helps us to make a series of reforms and adjustments, which sometimes cannot be realized because no conditions exited for this.
Who may participate in public tenders?
Colombia reserved contracts of up to USD 125 000 for domestic SMEs. This extends to USD 250,000 for some entities that generate high volumes.
In numbers, what does this benefit mean?
Over 80% of what Colombia buys from the U.S. is goods not produced in the country. Domestic SMEs, most of which are not exporters but rather serve the local market, still have to import equipment and raw materials. So now they will have access to such items at better prices.
Almost all companies in the country are micro-, small-, or medium-size enterprises (MSMEs). How will this sector fair under the FTA?
Indeed, MSMEs are the foundation of our economy, and most of them are in the field of trade and services. For this fact alone, they will be favored with the FTA. On the other hand, those in the manufacturing sector will also have access to cheaper equipment and raw materials, so as to meet domestic demand.
Specifically, what benefits were gained for footwear for export to the U.S. market?
The FTA includes various types of shoes (made from synthetic materials) that were excluded from the ATPDEA, but under the FTA, these items will be duty-free, after completing the period of relief. It is worth mentioning that this sector of the economy is mainly composed of small and medium sized enterprises.
In this regard, is there more flexibility in accumulation of origin?
The FTA, unlike the ATPDEA, opens the possibility for agreements on the figure of accumulation, which approves the incorporation of inputs from countries that are not members to the FTA. This figure is very important for Colombia because it allows for access to favorable terms of competitiveness, in respect to important inputs, such as denim, for domestic industry.
On the issue of origin, did this sector achieve any improvements for garments that have potential in the U.S. market?
Yes, the rule of origin improved for the export of bras. The new rule gives immediate preferences to bras that have been cut and sewn in Colombia, while the previous standard was much more restrictive. Thanks to the FTA, we have eliminated tariffs on manufactured goods for the home. This market line had not been included in the ATPDEA, but it will now receive immediate relief, which will open important opportunities for Colombia. The FTA creates better access for raw materials, such as cotton, which means improved competitiveness for the Colombian textile industry.
What new states in the U.S. will the industry be able to reach?
From this point forward, Colombian exporters will have their textiles, apparel, design, and the U.S. These are located in California, Texas, Florida, New York, Georgia, and Illinois. This goes for the whole package, from raw materials and inputs to finished goods.