Doing Business in

Colombia

Wanda Barquin, Commercial Attaché U.S. Embassy, Bogota, Colombia

Colombia at a Glance

• 3rd largest population in Latin America (48 million), 3rd largest economy

• Location- 2 coasts• Good literacy, low

English• Middle class: 35%

30% poverty rate.• 31% of population

between 20-39. • Air travel the norm

Why Colombia? World Bank- Doing

Business2014

Colombia at a GlanceBrasil

:196

Mill.

Mexico:

117 Mill.

Colombia:

48 Mill

.

Argentina

41 Mill

Perú 30

Mill

5 cities with 1 million+ consumer bases

BOGOTÁ:7.7 MILLION

MEDELLÍN:3.7

MILLION

CALI:2.3

MILLIONBARRANQUILLA:

1.2 MILLIONCARTAGENA:

1 MILLION

• Democratic Republic

• Juan Manuel Santos elected to second term as President in June.

• Colombia Peace Talks in Cuba: Since November

2012 the government and negotiators from the FARC have been seeking a deal to end the 50+ year conflict.

Colombia at a Glance:

Headlines

• Next Tier Market under President Obama’s National Export Initiative

• GDP growth of 4.3% in 2013                             4.0% for 2012    6.6% for 2011 4.6% projected for 2014 • Emphasis on Major projects – $26B – next four years (Much of this for roads)

• Direct investment: $16.8 B in 2013; $15.3 B in 2012, $13.5 B in 2011 ($8.4 B in first ½ of 2014)

Why Colombia?An Economic Tiger

Market Trends: Major Projects

• Two Refinery Modernization projects

• Ports – Cartagena, Salgar, Buenaventura

• Infrastructure – Roads, Bogota’s El Dorado Airport, Barranquilla airport

• Dredging of Magdalena River

• Construction of 8,000 km of new roads over next decade

• Tourism infrastructure: (e.g, 24 new hotels by end of 2014).

ChallengesSocial Economi

c• Obtain a peaceful solution to the internal conflict

• Defeat corruption in official agencies

• High displacement rate • Reduce poverty

• Large informal economy-tax evasion

• Bureaucracy/red tape

• Transportation Infrastructure-internal costs one of most expensive in world

• Paying for Peace

Market Trends: Leading Sectors for U.S. Exports

www.buyusa.gov/colombia/en

• Oil & Gas Machinery/Services

• Transportation and Infrastructure

• Mining Equipment• Construction

Equipment• Information

Technology and Communications

• Military Equipment

• Auto Parts/Accessories

• Electrical Power Systems

• Travel and Tourism• Food Beverage

Processing/Packaging Equipment

• Medical Equipment

Market Trends:U.S.-Colombia FTA

•U.S. exports to Colombia increased 14% in 2013 over 2012 to a record $18.6 billion (4th consecutive yr. of growth)

‐ Create/save jobs ‐ Increase market access for goods and

Colombia’s $166 billion services market

‐ Non-tariff barriers to trade will be progressively eliminated as FTA

enters into force‐ Improve business climate by reducing

corruption and informality

• 90% of Colombian products entered the U.S. market duty-free, while U.S. merchandise entering Colombia face tariffs averaging nearly 9%. (APTDEA)

• FTA eliminated tariffs for over 80% of U.S. exports of consumer and industrial products (excluding petroleum) immediately upon implementation and 87% within 5 yrs.

• The impact of eliminating tariffs and related barriers in Colombia is estimated to increase U.S. GDP by nearly $2.5 billion.

Market Trends:U.S.-Colombia FTA

Market Trends:U.S.-Colombia FTA

First 6 months of 2012:• Colombian exports to U.S.: 12.8 Billion• U.S. exports to Colombia: 7.6 Billion  First 6 months of 2013:• Colombian exports to U.S.: 11.4 Billion• U.S. exports to Colombia: 8.8 Billion First 6 months of 2014:• Colombian exports to U.S.: 9.3 Billion• U.S. exports to Colombia: 9.9 Billion

U.S. exports to Colombia up 30% first 6 months of 2014 vs. first 6 months of 2012

Colombian exports to U.S. down 27% during same timeframe.

Market PracticesTips for Success in

Colombia • Be informed – Read Country Commercial

Guide www.export.gov/colombia• Use situational awareness for security• Colombia: Check the “Clinton List”/OFAC

website• Identify partners/background check • Include arbitration clause in contracts• Be familiar with the laws and regulations• Always get legal advice

Market PracticesTips for Success in

Colombia • Language & translate materials• Don’t push for big orders … ease into it• Stay well informed – things change very

quickly in Colombia – Info is critical• Be aware that Colombia has its own

cultural nuances

Exploring New Market Opportunities in Latin America

U.S. FTA partner markets in Latin America:

• Mexico• CAFTA-DR• Panama• Colombia• Peru• Chile

“...Latin America represents an incredible opportunity for the United States,especially when it comesto my top priority as President:creating good, middle-class jobs...Right now, over 40 percentof our exports go to the Americas.And those exports are growing fasterthan our tradewith the rest of the world.”

- President Barack Obama,May 4, 2013

Wanda BarquinCommercial Attachén@trade.govoffice.bogota@trade.gov