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100 faqs about TLC.
Flowers benefitted with the ATPDEA. How does this sector fair under the FTA?
This sector will fair much better. Now, the tariff preferences are for an indefinite period, which both guarantees the arrival of new foreign investment to the sector, as well as the possibility of long-term contracts.
What mechanisms were established to protect sensitive agricultural products?
For sensitive products, protection mechanisms were established, such as automatic safeguards, higher base rates, extensive elimination of tariffs, tariff quotas and grace periods.
Was banana exports included in the negotiations?
This is a product without charges, so its imported inputs enter, preferentially.
Returning to the issue of agriculture, many farmers feel that they are the losers with this FTA. Is there any reason to think that way?
On the contrary, the agricultural sector is among the big winners with the FTA, since there are mechanisms to ensure effective access, as well as instruments to protect sensitive products. In fact, there is big opportunity for fruits, vegetables, dairy, meat, and tobacco. And this also includes great opportunities for flowers, sugar and its derivatives, ethanol, palm oil and its derivatives, prepared foods, pastries and biscuits, cocoa and chocolate, brown sugar, herbs, coffee, and cotton.
Would you expect a dynamic business immediately?
That depends largely on how quickly businesses move. Our efforts at the Ministry of Trade, Industry, and Tourism and at Proexport have been to encourage business to act quickly.
But what are the immediate opportunities to reach the U.S. market?
It depends on the productive structure of each region of Colombia, but this may include, for example, lines of textiles for the home that were not covered by the ATPDEA. This includes such things as drapery, towels, linens, as well as footwear and leather goods, and metalworking (products such as window frames and tools). There are also possibilities in cosmetics, furniture, agro products, chemicals and plastics, as well as in services.
Which sectors have growth potential with the entry into force of the FTA?
Studies show that an FTA between Colombia and the U.S. will give opportunity for growth and export in sectors such as fisheries, oil and gas,his also includes professional services. We should not forget that the U.S. is the country that buys the most goods. Likewise, the experience of other countries in Latin America shows that sectors which did not register trade prior to an agreement can be unexpected winners once the agreement enters into force.
Will there be Government support for these sensitive activities?
Yes, the Government, through the Ministry of Agriculture, has announced $1 billion to support the technological transformation of sectors such as dairy, beef, rice, and poultry, which are those most threatened by the competition that may come.
Nonetheless, some sectors are nervous.
If it refers to the concerns of businesses in the sectors of rice and chicken, we have reiterated that the periods of relief range from 10 to 19 years, which is a reasonable time to increase competitiveness.
Now that the FTA is a fact, what remains pending?
Although the whole process has culminated, with customs ready to embrace the change, there still remain some further tasks to fulfill. These relate to various reforms, such as food safety issues for products such as meat, which will enable us to harness the full potential of this FTA.
Given the FTA, has the manufacturing sector taken up the challenge?
Among other actions, businesses have analyzed which inputs and imports become cheaper as a result of reduced tariffs. They have also identified significant opportunities vis-à-vis competitors, such as Brazil, Argentina, and China, where they pay tariffs above 5%. So, this opens up the prospect of capturing some new markets in the U.S. The Administration, Congress, and the Constitutional Court have done their part in realizing this FTA, now it is up to businesses to make the most of it.
If I go to a concert, for instance, can I record it with my camera?
If you are permitted to use a camera at the event, then yes, you can record it. What the law prohibits is to conduct a live broadcast of the concert, unless you have paid for the respective rights. By the way, to do so otherwise has been banned since the mid 90s.
If I am a student and I need to download information from the internet, can this be done without a problem?
Absolutely! Colombian legislation has, for many years, established exceptions for students, teachers, researchers, and so forth. Using information in good faith and without the intention of making a profit shall proceed without any problems. Again, this law does not change an internet user’s access because no new sanctions, limitations, or restrictions to the flow of knowledge have been incorporated. On the other hand, if a user intends to make money on such information, then yes, there will be a problem.
If there was nothing new, why was there a message of urgency for adoption given by the Administration to the Congress?
This is because the Free Trade Agreement that was signed with the U.S. sets out commitments that are required to become laws of the Republic prior to the entry into force of the FTA. Thus, this new law conforms to standards established and approved by Congress beforehand. This included, for example, updating legislation contained in Law 23 of 82, Law 44 of 93, and even Andean decisions that enshrine the rights of access to information and free expression.
So why do some say that it violates the rights of internet users?
This is also untrue. Nothing has been altered in terms of internet use. The Law contains provisions that were already pre-approved by the Colombian Congress in 2007, and a big portion of it content form part of the decisions made by the Andean Community. What was approved did not yet formed part of our legal system.
Recently there was much excitement by the Law to implement the FTA. Is it true that it was a Lleras Law "reloaded"?
No, this is an erroneous message, as this law doesn’t have anything that resembles what is known as the “Lleras Law,” which was not approved by Congress.
Is the FTA a formula for growth?
Yes, this FTA shall be a formula for growth, and it is similar to those agreements that other countries have signed with the U.S. It is also is a policy that complements the Development Plan, as it contributes to growth through the elimination of obstacles and uncertainties. And thanks to this FTA, Colombia can be a platform for companies wanting to establish in the region in order to receive the benefits of the FTA, so as to increase their sales to the U.S.
By the way, what sectors will be the first to benefit with the FTA?
The FTA covers almost all trade, services, and investment, so that the beneficiaries will be the sectors where businesses are proactive in seizing opportunities. Business tourism is one of them, given that initial trade and investment activities with the U.S. will increase the movement of businesspersons from both countries. Moreover, as of January 1, 2013, we will have open skies with the U.S. This is where airlines can fly cargo or passengers to any city in both countries. The opportunities that this FTA brings will help Colombia to become a world-class destination.
And what will this container possess as the first business under the FTA?
ANDI sources indicate that this will be loaded with textiles and apparel. Similarly, Asocolflores will be sending its first container of flowers on the same day, all with the zero tariffs that have come with the FTA.
Are you planning a formal ceremony for the entry into force of the FTA with the U.S.?
Yes, the National Association of Industrialists (ANDI) is convening a ceremony at the port of Cartagena, where they will send a container of goods to the U.S. rate. This is the first export container under the FTA and is a symbol of things to come for the country: more exports to our largest trading partner, more investment, and therefore more industrial development and employment, which supports the the Government’s policy to internationalization the economy.