ColombiaOne.comBusinessColombian Manufacturing Thrives Since US Free Trade Agreement

Colombian Manufacturing Thrives Since US Free Trade Agreement

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Colombia US Free Trade Agreement
Since the signing of the Free Trade Agreement between Colombia and the United States, manufactured products from Colombia have seen a significant increase in US markets. Credit: DNP Colombia

It’s been twelve years since the free trade agreement between Colombia and the United States became legal. The agreement has allowed many economic sectors to benefit from it and has contributed to a very successful process of economic diversification. This has allowed both agricultural production and industrially manufactured products from Colombia to play a more significant role in the United States markets. 

The US Free Trade Agreement and Colombian industrial production

According to the Colombian American Chamber of Commerce, 748 industrially manufactured products have increased their U.S. market share by 492% and have raised USD 1748 million in the years since the agreement came into force. 

Some of the products that have particularly benefited from the agreement are doors, windows, electrical equipment, auto parts, and plane and helicopter parts. Besides these industrial products, clothes, swimwear, underwear, and latex products have also benefited from the agreement. 

Maria Claudia Lacouture, president of the Colombian American Commerce Chamber, stated, “The Free Trade Agreement with the United States still has a lot of potential to explore and take advantage of. It is important to see that there are 748 manufactured products that have increased their exports to that country, beyond the agro-industrial sector that has traditionally been one of the sectors that has benefited the most from the trade agreement.” 

She added, “The call is to reinforce efforts to improve the competitiveness and productivity of companies in Colombia, especially in the context that the country has in 2024 where we have a significant growth challenge. The opportunities offered by the Free Trade Agreement will help in the process of economic reactivation.”

How has the free trade agreement benefited Colombian agricultural products?

Agricultural products have also seen growth. These products have also seen much diversification, with 153 agricultural products that do not include coffee, bananas, and flowers registering a growth of 210%. 

Some of the products that have benefited are sugar cane, fruits, edible plants, and Tahiti lemons. 

Lacouture pointed out that “Colombia still has opportunities to increase its sales to the United States in 607 products from the agricultural sector. Of these, 171 have a growing market in the US, and in the remaining 436 products, it can increase its export capacity through coordinated and defined medium and long-term work that is based on the productivity of the sector, so that they translate into final sales to the U.S.”

The Colombian export basket

In turn, the Colombian export basket has shown a macro-sectoral switch. While in 2012 the energy mining sector (ME) represented 71% of the exportable offer, in 2023 it consolidated at 41%. On the other hand, the non-energy mining sector (NME) went from representing 29% in 2012 to 59% in 2023.

Between 2012 and 2023, Colombia exported to the whole world US $539,908 million, of which 29% went to the United States, the country’s main trading partner, selling within the framework of the Free Trade Agreement US $15,442 million.

“The Free Trade Agreement provides clear rules and tools for exporting entrepreneurs to bring their products and services to the United States, and with the Pact for Opportunities for Growth, these opportunities can be further exploited,” explained Lacouture.

Meanwhile, according to information from the Ministry of Commerce, Industry, and Tourism, the arrival of travelers from the United States to Colombia increased by 230% from 330,805 in 2012 to 1,090,017 in 2023.

The United States sends the most foreign travelers to Colombia, with Antioquia, Bolívar, Bogotá, Valle, and Atlántico being the main destinations of Americans.

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