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Photo flickr /BlueAndWhiteArmy
This is one of the most representative negotiations for Colombia, given the special characteristics of this trade partner: Canada is one of the richest countries of the world. It generates 2.6 percent of GDP, world-wide, while the high spending power of its 34 million inhabitants, allows it to be classified as the fifth largest importer on the planet.
Additionally, Canada is a member of the G8, a group of industrialized countries whose political and economic weight is very relevant on global scale, and a member of the Organization for Economic Cooperation and Development (OECD), which confirms its level of importance.
When referring to the entry into force of the FTA with Canada, the minister of Trade, Industry, and Tourism, Sergio Diaz-Distinguished, emphasized the importance of this new trade relationship, saying that " now the ball is in the court of the exporter and investor it&rsquo s up to them to make the best use of this Treaty.&rdquo
According to Minister Diaz-Granados, " 98 percent of the exportable supply in Colombia is included in the agreement, as much for agricultural goods as for industrialists ones. All of which will be able to enter the Canadian market free of tariff. Additionally, it will be possible for Colombia to buy machinery, equipment, and many of the inputs that its industries require, at competitive prices, the final benefit of which will be passed on to consumers.&rdquo
Given the complementarities of the two economies, there are great opportunities both ways.
Thus, while the Canadian consumers will be able to receive numerous products, such as live animals, beef, yogurt, fertile eggs, flowers, vegetables, fruits, sugar, confectionery, ethylic alcohol, and aguardiente (a traditional, alcoholic beverage of Colombia), among others Colombians will be able to access capital assets, raw materials, and intermediate goods not produced in the country. These include fishing products, minerals, chemicals, medicines and pharmaceuticals, rubber, plastic, and leather and their manufactured goods, wood, paper, glass, jewels, automobiles, and auto parts.
IMPACT
According to simulations realized by the National Planning Department, the entry into force of the Treaty will lead to an additional 0.06% increase in GDP, with a growth in exports of 0.21 percent and a growth in imports of 0.08 percent.
Those that are expected to be the biggest winners include the sectors of sugar, textiles, vegetable oils and fats, vegetal fibers, and processed rice.
Another key objective with this opening for trade is that of job creation. In this respect, it is predicted that the sectors of textiles and garments, bio-fuels, sugar, and flowers will see big gains.
In addition to this, the subject of investment was also included in the Agreement. On this topic, it is expected that Canadian capital will arrive for new projects in the sectors of telecommunications, financial services, and mining, among others.
The Agreement also gives Colombia access to the Canadian procurement market, where each year the Government of Canada spends over 17 billion dollars, in goods and services. Colombia will be added to its list of suppliers, which includes Chile, Mexico, and Peru.
OTHER SUBJECTS INCLUDED
One of the aspects of great importance within the negotiations for the Agreement concerned the benefits that micro, small, and medium enterprises (MSME) would receive.
To this end, a commitment was established to have the Commission of the Treaty review, periodically, the impact of its application on this sector. The aim is to seek out the necessary actions, if needed, which would allow MSMEs to flourish under the Agreement.
Furthermore, the subject of cooperation was also included, which will permit the development of projects and actions that contribute to enhancing the effectiveness of the Agreement.
Finally, strict rules were included to ensure the protection of workers&rsquo rights and the environment, two points which were also included in the topic of cooperation.
OPPORTUNITIES
With the Treaty about to enter into force, PROCOLOMBIA has assumed the task of identifying opportunities for Colombian businesses. To this end, there is a clear list of the sectors towards which they should aim.
This includes the sectors of oils and fats, seafood, conserved and processed foods, sugar, nonalcoholic drinks, cacao, cigarettes, confectionery, flowers, fruits, concentrated proteins, baked goods, and fresh vegetables comprise the first package of opportunities.
In addition to this, there are the sectors of manufactured goods associated with auto parts, car batteries, brake pads, plastics, ceramic products, personal hygiene preparations, fiber glass, electrical insulators, and ceramic, marble, and stone flooring.
As for the textile and garments sector opportunities exist for synthetic threads and fibers, suits for man, under garments, bath and bathing garments, and leather articles.
And, in general, there are interesting possibilities for offices supplies, environmentally friendly cleaning products, and health foods that are easy to prepare.
Lastly, in services, the best options are in the areas of software development and computation, as well as the areas concerning linguistics, architectural design, and the environment. There are also opportunities in 2-D & 3-D animation, consultancy, telemedicine, call centers, online translation, data processing, computer science, and other services related to software and telecommunications.
