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This month, the U.S. and Colombia mark the seventh anniversary of the bilateral trade promotion agreement that laid the groundwork for an economic component to one of the most important strategic partnerships in the region. This agreement between two countries committed to market liberalization and integration is worth commemorating, and it just happens to fall during World Trade Month.
The U.S. Chamber of Commerce’s U.S.-Colombia Business Council marked the anniversary during a meeting with Colombian Vice President Marta Lucía Ramírez earlier this month, where she expressed support for foreign investors and American exports, welcoming their contributions to Colombia’s prosperity.
Under the leadership of President Iván Duque Márquez, the future of bilateral economic ties looks promising. During his keynote address at the U.S. Chamber on February 14, President Duque reiterated his objectives of increasing trade and removing barriers through full implementation of the U.S.-Colombia Trade Promotion Agreement (TPA).
President Duque also recognized the U.S. Chamber’s role in advancing the bilateral economic relationship by bestowing the Order of San Carlos on U.S. Chamber President and CEO Tom Donohue.
Among other achievements, the award acknowledged Donohue for helping to secure passage of the TPA, which entered into force on May 15, 2012. As the agreement hits the seven-year milestone, the U.S.-Colombia Business Council reflects on the benefits of the U.S.’s commercial partnership with Colombia.
History of the TPA
Negotiations for the TPA were launched in a very different context. In 2004, Colombia was engaged in a decades-long armed struggle with the leftist FARC guerilla group, which constricted market access and deterred foreign investment. Despite these challenges, both countries embraced a long-term vision of strengthening commercial ties. And by the time the agreement came into force in 2012, Colombia was just years from concluding a historic agreement that would allow it to reap the commercial benefits of peace.
Economic benefits of strategic partnership
Colombia is now an example of economic dynamism, a member of the Organisation for Economic Co-operation and Development, and has a market for over $14.9 billion of annual U.S. exports — a 171% increase from when negotiations commenced in 2005. Thanks to the trade agreement, the U.S.-Colombia relationship has advanced beyond the threshold of security and counter narcotics to become a partnership grounded in shared prosperity.
This is a fitting evolution for an indispensable U.S. ally in Latin America, which has modeled its emphasis on innovation and free enterprise on the U.S.’s own vibrant economy and whose President shares the Trump administration’s focus on boosting growth. This U.S.-Colombia bilateral relationship has never been stronger and will be critical as we collaborate to ensure a peaceful Colombia flourishes and as we stand shoulder-to-shoulder to confront the economic, political, and humanitarian crisis in Venezuela.
To that end, benefits of the TPA are evidenced in a reinvigorated commercial relationship, in old and new sectors alike: according to the U.S. Department of Agriculture, traditionally strong corn exports have hit record highs every year since FTA implementation, while U.S. exports of aircraft parts surged after the elimination of a 5% tariff. On the other side, U.S. industry continues to depend on Colombian chemical and petroleum imports, which led to the recent signing of a Memorandum of Understanding between the respective Energy Secretaries. And from a newer industry, Americans purchased 4 billion Colombian flowers in 2018 alone.
The gains have also been felt among small and medium size enterprises (SMEs) — according to the Colombian government’s export agency, more than 279 apparel stores have exported their goods to the U.S. for the first time since the agreement’s signing. From the U.S. side, the growth of Colombian tech hubs has proved a boon for small-scale exporters of IT goods and services. This diversification of the bilateral exchange is a tribute to the TPA’s wide-ranging effects.
A promising future
Under the leadership of President Duque, the future of the economic relationship looks promising.
As with any deal, there is progress to be made on the trade agreement’s execution. There are still opportunities to expand implementation, strengthen fidelity to the agreement through enforcement, and conclude efforts to successfully address lingering trade irritants that remain in truck scrappage and intellectual property.
But the gains in market access, trade facilitation, investor protections, and transparency showcase the TPA’s undeniable success, and provide the U.S.-Colombia Business Council a solid foundation on which to build a strong bilateral economic agenda.