Opportunies with our new Free Trade Agreement Colombia - USA in the apparel sector
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  • 1. Opportunities with our new Free Trade Agreement Colombia – USA May 2012
  • 2. 0% Duty100% Business Opportunities1.000% Fulfilling Experiences
  • 3. OUTLINE Colombian Economic Outlook What does the FTA between the United States and Colombia imply? Colombia a country for buying, investing and traveling About us…
  • 4. 2011 was a year of great economic achievements • 1 million barrels • 5.9% growth rate • 2 million new of oil and gas in 2011 jobs* production 12% higher than the Fourth largest average growth rate Unemployment producer in Latin of Latin America rate (11%) America (3.6%) • Direct Foreign • Exports of goods Investment (U.S. and services U.S. • Reduction of the $ 13.234mill) $ 60.000mill fiscal deficit (2.2%*) • (4.0% of GDP) • (18.5% of GDP) Record figure in Record figure in Reduction of the the history of the history of fiscal deficit Colombia Colombia (2.2%*)
  • 5. In GDP terms, Colombia is the 28th largest economy in theworld using the PPP method of evaluation GDP (PPP) US $ Billion - 2011 466 443 423 387 378 367 348 301 298 278 272 246 233 205 184 133 D G IR ND EZ D ZE ND NG LA EL A RE U L ZE EN E M L A SW M N AE PO HIL N N A R I BI A IU YS LA E PO G LA VE LA PE O ED EW ELA N M G R U TU K C ET LA A LO N R IS A FI G R VI A B N O N M O IT C SI H SW N Note: PPP (Purchasing Power Parity) (February 7 2012)
  • 6. GDP per capita adjusted to PPP reaching US$10,000 Colombias GDP per capita (PPP)*, 2000 – 2011e (US $) 9.790 8.842 8.940 9.310 7.817 8.474 6.343 6.817 7.204 5.826 5.984 6.151 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (e) +60% •GDP Per Capita adjusted to prices at purchasing power parity (PPP) Source: EIU (Economist Intelligence Unit) (February 7, 2012)
  • 7. Macroeconomic stability GDP, Inflation and Unemployment rate (%) 2002 – 2011 (Annual Average) Unemployment rate GDP Inflation Source: DANE- Colombia Central Bank - EIU: Economist Intelligence Unit Forecast e: Estimated (February 2012)
  • 8. In 2011 Colombia reached the highest FDI inflow in history Main Investors in Colombia 2000 – 2011** United States • US $9,595 million • Share of 24.8% England • US $5,684 million • Share of 14.7% Spain • US $3,431 million • Share of 8.9% Canada • US $1,373 million • Share of 3.6% Variation 2010–2011: +92% *Figures obtained through the foreign currency balance of the Bank of the Republic. **Share of all countries with positive cumulative investment, without reinvested profits or investments in the oil sector. Accumulated value 2000 – 2011: US $38,615 million Note: the list of the top countries investing in Colombia does not include Anguilla or Panama, in third and fourth place. Source: Bank of the Republic - Balance of Payments
  • 9. Colombia is also increasing its outbound investment flowsUS $Million Ranking of countries receiving FDI from Colombia (2000-2010) 1. USA 2. England 3. Panama 4. Brazil 5. Peru 6. Guatemala 7. Mexico 8. Chile 9. Ecuador 10. Venezuela Assembly of the first 500,000-volt Purchased 60% of Peruvian energy electric transmission system in Peru. company Cálidda. Investment: US $130 Million Investment: US$ 111 Million Purchased ING companies in Chile, Mexico, Acquisition of one hundred percent of the Peru, Uruguay and Colombia Central American Bank Investment: US$ 3.763 Billion Investment: US$ 1.9 BillionSource: Banrep
  • 10. In eight years, exports quadrupled Top Exports Destination, 2011 United States • US $21.720 million • Share of 38.1% Netherlands • US $2.524 million • Share of 4.4% Chile • US $2.205 million • Share of 3.9% China • US $1.989 million • Share of 3.5% Variation 2009 - 2010: -21.2% Variation 2010 - 2011: 43% Variation Jan – Mar 2010 vs. Jan – Mar 2011: 23.2% Source: DANE (National Department of Statistics)
  • 12. Productive Transformation Program: A Public - PrivatePartnership to strengthen and build “world class sectors” INNOVATION INFRASTRUCTURE AGRIBUSINESS MINING |
  • 13. A country with various regions and opportunitiesfor investment Caribbean Region Caribbean Region: tourism, logistics, petrochemical cluster, construction materials, and an export platform to the Caribbean/Atlantic Central / Andean Region Central/Andean Region: service outsourcing, high value-addedPacific Orinoquía manufacturing, hub to cover the domesticRegion Region market, and a specialized agriculture industry. Pacific Region: manufacturing, agroindustry, logistics, biotechnology, and Amazon an export platform to the Pacific Rim. Region Orinoquia Region: agriculture, forestry, biofuels, and hydrocarbons. Amazon Region: conservation and ecotourism (Leticia).
  • 14. “Colombia, one of the stars of Latin America…”IEE (Institute of Economic Studies) - Spain “Colombia will do better than other countries of the region in case of a new global recession… The country has accumulated savings which can stimulate the economy in case of an economic downturn.” Rodrigo Chavez – Director, Latin America and Caribbean“Colombia has become an attractive destination for investment…Increased security promoted per capita GDP growth since 2002.”
  • 15. “From nearly failed state to emerging global player, in lessthan a decade.” THE COLOMBIAN COMEBACK: Colombia’s President Juan Manual Santos interview with TIME. The hemispheric gathering (“Sixth Summit of the Americas” in the Caribbean city of Cartagena), marks a comeback for Colombia, which is emerging from half a century of crippling guerrilla, drug and political violence and is making a serious bid to be Latin America’s new economic and diplomatic player. Source: TIME Magazine, April 23, 2012
  • 16. OUTLINE Colombian Economic Outlook What does the FTA between the United States and Colombia imply? Colombia a country for buying, investing and traveling. About us…
  • 17. Main Features of the FTA Issues addressed during the negotiation: -Labor -Government bids -E- commerce -Services -Dispute resolution -Intellectual property -Competition -Environment -Investment regime -Market access (industry and agriculture) ATPDEA, preferences were consolidated and extended due to the Colombia-US FTA. Colombian companies’ will have access to US government bids. Provisions regarding this subject aimed to ensure transparency and clear regulations. Both parts will offer national treatment to either Colombian and/or US companies, regarding FDI (Foreign Direct Investment).
  • 18. Main Features of the FTA After the FTA implementation, Colombia will get free access for 97.5% of the agribusiness products, approximately 1,100 Colombian products (77% fruits, 90% vegetables, 88% processed vegetables, and 100% flowers) will be duty free. On the other hand, the United States will have free duty access for 84.4% of its agro-industrial goods. 99.9% of Colombian industrial products will become duty free immediately upon the FTA implementation. More than 2,900 Colombian products (building materials 64%, house-ware(s) 64%, beauty and personal care 55% and auto parts 48%) will have the benefits More than 1,600 products of the apparel-textile and ready to wear categories, 90% for leather manufacturing goods, 73% of footwear and 76% of leather categories, will enter the American market duty free. Both parts agreed to eliminate certain legal figures which didn’t facilitate suppliers to provide their services; Not forcing the local presence of suppliers and not discriminating on limitations with the number of suppliers, the value of assets or transactions and the number of employees.
  • 19. OUTLINE Colombian Economic Outlook What does the FTA between the United States and Colombia imply? Colombia a country for buying, investing and traveling. About us…
  • 20. A country where you can buy competitive products, and getaccess to other markets, while also living fulfilling experiences.
  • 21. A country where you can buy competitive products.
  • 22. Why buy from Colombia? Year-round availability for a wide range of our agricultural products, due to the countrys geographical location . Some Colombian companies are certified by: Globalgap, Fairtrade, HACCP, Organic, Ecocerts, BCS OKO JAS and UTZ Certified, among others. Agribusiness
  • 23. Why buy from Colombia? High availability of skilled and qualified human resources Connectivity redundancy Double-taxation agreements in place or approval process and Value Added Tax (VAT) exemption on service exports High degree of adaptation to new technologies, specialization, experience and value-added products. Presence of several multinational companies Colombia stands out for its research in scientific and health topics Home to great medical advancements. Services 23
  • 24. Why buy from Colombia? The corporate sector has made scientific and technological knowledge and creativity available to the productive sector, thus offering a menu of export goods or services with more drive and content. Colombian companies have international quality certifications backing their production processes, such as: ISO 9001; registration under the National Institute for Surveillance of Medications and Food (INVIMA); best manufacturing practices (BPM); and it’s logistics processes with the BASC certification. Manufacturing 24
  • 25. Why buy from Colombia? Consolidated industry with more than a century of tradition, already recognized around the wold . Ongoing development of new products with innovation in finishes and processes following world trends. Integration of players assures consistent quality and reliable delivery times. Skilled manual labor has granted Colombian products international acknowledgement for their premium qyuality. Textiles and Apparel 25
  • 26. One of the best environmental businesses, where you can also access other markets
  • 27. Colombia: the top reformer of the region Change in Doing Business Ranking, 2007-2012* (Variation in the number of positions) Source: Doing Business 2012 World Bank Report *Positive numbers indicate improvements in business environment
  • 28. Three of the top risk rating agencies granted Colombiathe "Investment Grade” The three agencies agreed on the countrys positive economic and financial situation, highlighting:  Its ability to deal with external shocks  Its historic fulfillment of obligations  An increase in its macroeconomic credibility  A visible improvement in security conditions May 31, 2011
  • 29. “Colombia is the second most attractive country forinvestment in Latin America for the next 3 years.” Brazil Colombia Chile Mexico Perú Source: Investor perception research JP Morgan Chase Bank Co.
  • 30. Colombia’s human capital Labor force growth, 2011 2/ Labor Market Flexibility, 20113/ Rating scale from 0-100. 0: Flexible - 100: Rigid Brazil, 1 Colombia, 10 Chile, 18 Colombia, 5 10.2% Argentina, 21 Peru,11 Peru, 39 3.9% Chile, 16 2.5% Mexico, 41 Argentina, 19 1.8% Brazil, 46 World Ranking of 59 countries Venezuela, 25 1.6% % Labor force growth 1.3% Mexico, 37 Venezuela, 69 0.2 %Source: IMD World Competitiveness, 2011. Ranking of 59 countries.2/ Ranking, percentage change3/ The flexibility of the labor market is measured by the rigidity of the employment index.
  • 31. Colombia’s human capital Availability of Skilled Labor, 2011 6/ Manager Credibility, 2011 7/ Scale 0-10. 0: low availability – 10: high availability Scale 0-10. 0: weak– 10: strong Source: IMD World Competitiveness, 2011. Ranking of 59 countries. 6/ The labor market has skilled labor available. 7/ The credibility of managers in the society is strong.
  • 32. A Competitive legal framework of areas 15% Income Tax. No taxes on imports and VAT. It benefits from FTAs. No restrictions on sales to the local market. Different types of Free Trade Zones according to the needs of the investor. Approximately 30 industrial park zones (Multiuse) and 70 Free Trade Zones around the country (Single Business). All Free Trade Zones in Colombia About 4 million Mt2 available for companies that want to locate in permanent FTZ’s.
  • 33. Main Investment sectors from the U.S. to the world Software & IT Services 17% Business Services 14% Financial Services 9% Communications 6% Food & Tobacco 4% Industrial Machinery, Equipment & Tools 4% Transportation 3% Chemicals 3% Total Greenfield Projects: 39.513 Consumer Products 3% Textiles 3% 34%Source: FDI Markets, period 2003-2011. Estimates: Proexport
  • 34. Regional Opportunities by Sector Opportunities in Assembly and Auto parts Assembly project for the Latin American and Caribbean market’s. Invested in the stamping process, welding, and finished painted product. Opened a bus assembly plant in Colombia. Automotive
  • 35. Regional Opportunities by Sector Opportunities in Oil & Gas Services A New plant with STAR technology, specialized in oil extraction. Indian company established in Colombia to increase extraction and production. Establish a new TSX lab for analysis of different minerals.Oil Productsand Services 35
  • 36. Regional Opportunities by Sector Opportunities in Agribusiness Development of 12,000 hectares of sugar cane for an ethanol plant with a capacity of 376,000 liters per day. Invested in the expansion of the facility in the city of Cali. Opened a new plant in Valle del Cauca.Agribusiness 36
  • 37. Regional Opportunities by Sector Opportunities in BPO, Software & IT Services and Telecommunications Global services center for BPO and IT operations. Services center for financial and accounting operations. Data Center oriented to System integration and support services. IT and BPO&O 37
  • 38. Regional Opportunities by Sector Opportunities in Production, Research & Development Centers and Logistics 3 different plants and new global innovation center. A plant production and Headquarters that cover 9 countries in Central and South America. Logistic Center to distribute all the of the Andean Community countries. Cosmetics, Toiletries, and Cleaning Products 38
  • 39. FTA´s Norway Norway European Union European Union Iceland Iceland Canada Canada Liechtenstein Liechtenstein United States United States Switzerland Switzerland Turkey Turkey South Korea South Korea Japan Japan Dominican Republic Dominican Republic Guatemala Israel Israel Mexico Mexico Guatemala Honduras Honduras Costa Rica Costa Rica El Salvador El Salvador Gulf Community Gulf Community Venezuela Venezuela Panama Panama Ecuador Ecuador Brazil Brazil Peru Peru Bolivia Bolivia Australia Australia Uruguay Uruguay Chile Chile Paraguay Paraguay Argentina Argentina New Zeland New Zeland In Force Signed In Negotiation Future AllSource : Ministry of Commerce, Industry, and Tourism
  • 40. Colombia as an export platform from the United States to Brazil Air MaritimeSource: Estimates Proexport Source: Estimates Proexport*** IATA tariffs (not airline tariff) in order for a high denomination *** IATA tariffs (not airline tariff) in order for a high denomination scalescale
  • 41. Doing business and living fulfilling experiences at the same time
  • 42. Tourism Products Nature Tourism Sun and Beach Cultural Adventure Nautical and Cruises Health and Wellness MICE Tourism
  • 43. International tourist arrival growth rate in Colombia triples vs. worldwide arrival rate World international tourist arrival vs. International Tourist Arrivals in Colombia 2000-2011 World Arrivals At the end of 2004 Average Growth Rate Proexport starts the 2001-2011: promotion of international 3.4% tourism in Colombia Arrivals in Colombia Average Growth Rate 2001-2011 10.3% Arrival growth rate in Colombia 2010: 8,9% - World 2010: 6,7% •Arrival growth rate in Colombia 2011: 7,3% - World 2011: 4,4% Source: WTO, Migracion Colombia. Proexport calculations
  • 44. Growing aerial international connectivity Colombia currently has more than 700 weekly international flights, connecting to 20 countries throughout the world. •The number of international direct flights to Colombia has increased over 130% throughout the last decade. •Colombia has one of the most extensive domestic flight networks in Latin America, over 4,000 domestic weekly.
  • 45. A few hotel projects in Colombia by prestigious chains B/quilla - 118 rooms Cartagena - 268 rooms Bogota- 191 rooms Bogota – 145 rooms . Bogota – 264 rooms Cartagena - 140 roomsBogota - 239 rooms Bogota - 142 rooms B/quilla – 126 rooms Bogota – 268 rooms Bogota - 180 rooms Bogota - 251 Hab. Bogota - 95 Hab. Medellín Bogota – 76 rooms Bogota – 216 rooms Bogotá – 126 rooms Cartagena – 256 rooms Cali - 150 roomsValledupar -108 rooms Cartagena- 278 rooms Bogota Bogotá - 56 rooms Medellin – 140 rooms. B/quilla - 180 rooms Bogota – 251 rooms Armenia - 140 rooms Armenia - 95 rooms Medellin - 68 rooms Bogota – 95 rooms Cartagena – 233 rooms Cartagena - 250 rooms2008 -2009 2010 2011 2012 - 2014 Opening year
  • 46. 0% Duty100% Business Opportunities1.000% Fulfilling Experiences
  • 47. About us Entity in charge of Promoting International Tourism, Foreign Direct Investment, and Exports EXPORTS INVESTMENT TOURISM
  • 48. Portfolio of Export tools Strategic plans to work together with exporters 1 Colombia Commercial Information and supply suitability (Zeiky, DEI, Cooperación) 2 3 Trade Missions for Buyers 4 Business matchmaking Colombia and the Exterior 5 International Trade Shows 6 Technical Missions and Trade Missions 7 Showrooms 8 Website for Exporters and Buyers Trade Agenda 9 Exterior Trade Missions for Exporters 10
  • 49. Portfolio of Investment tools 1 Seminars for investors Colombia 2 SIFAI 3 Joint promotion at regional level Colombia and the 4 Preparation of tailor made information exterior 5 Coordination and development of agendas for investors 6 Work with journalists and influential opinion generators Exterior 7 Seminars and international events
  • 50. Portfolio of Tourism tools 1 Colombia Joint work plan - Export Plan 2 Institutional Projects Colombia and the 3 Special Projects Exterior 4 Business matchmaking 5 Specific Promotional Activities 6 Joint promotional plans with operators 7 Workshops, destination presentations and International Trade Shows Exterior 8 FAM Trips 9 Tourism Portal 10 Value Added Institutional Presence (activations)
  • 51. Proexport around the world
  • 52. Rely on us to support you in identifying and developing business with Colombia Nombre Cargo Correo electrónico www.proexport.com.co