The Republic of Colombia is the fourth largest economy in Latin America, after Brazil, Mexico, and Argentina, and has the third largest population with approximately 46 million inhabitants. It is the only country in South America with two seacoasts (Pacific and Caribbean), which provides tactical shipping advantages in today’s global market. Aided by major security improvements, steady economic growth, and moderate inflation, Colombia has become a free market economy with major commercial and investment ties to the United States, Europe, Asia, and Latin America. With the implementation of the U.S.-Colombia Free Trade Agreement on May 15, 2012, Colombia is the third largest market for U.S. exports in Latin America.
Nevertheless, in the eyes of many U.S. exporters, Colombia still suffers more from the perceptions of the past than the realities of the present. The reality is that the past 10 years have brought extraordinary change to the country in terms of economic development due to improvements in the security situation. Strong political stability, a growing middle class (35.3% of the population), and improved security has created an economic boom in Colombia that, coupled with the government’s conservative fiscal policies, lessened the impact of the global economic crisis. Key economic indicators demonstrating the positive long-term effect of Colombia’s political and economic policies include: GDP growth of 5.5 percent in 2011 and 4 percent in 2012; foreign direct investment of USD 15.8 billion in 2012, a record for Colombia, which is an increase over the previous record of USD 14.8 billion in 2011, and inflation of 4 percent in 2012 and 4.3 percent in 2011. These are all signs of a strong and growing economy.
Due to Colombia’s close ties to the United States and Colombians’ appreciation for the quality and reliability of U.S products, consumers in Colombia often favor U.S. products and services over those of our foreign competitors. The United States is Colombia’s largest trading partner and Colombia is the 22nd largest market for U.S. exports in 2012. U.S. exports to Colombia in 2012 topped USD 16 billion, an increase of more than 14 percent over 2011.
Colombia is unique in that there are five bona fide commercial hubs in the country: Bogota, Medellin, Barranquilla, Cali, and Cartagena. As opposed to the majority of Latin American countries that have one or two major cities, Colombia offers U.S exporters access through multiple commercial hubs, each of which has its own American Chamber of Commerce. While these cities, and many other secondary cities, offer unique market opportunities, they are close enough via air routes that is common to have one partner (agent, distributer, or representative) to cover the whole country.
Regarding foreign direct investment by U.S. companies, coal mining and oil and gas exploration/production are the principal areas of U.S. investment, followed by the consumer goods, high-tech and tourism/franchising sectors. A sample of the major U.S. companies in Colombia include: 3M , Citibank, ChevronTexaco, Chicago Bridge and Iron , Drummond, ExxonMobil, Goodyear, General Electric, General Motors, Johnson and Johnson, Kimberly Clark, Kraft, Microsoft, Marriott, Marriott International, Occidental Petroleum, Sonesta Collection Hotels and Unisys.
2013 will bring greater investment in infrastructure projects ranging from roads (USD 26 billion allocated over the next 4 years), airport modernizations, port construction, and railway projects. New FDI will begin to be reflected in major hotel (Hilton and Hyatt) and infrastructure (highway, mass transportation, ports and airport) projects.
The Colombian government has implemented bilateral or multilateral trade agreements with most countries in North and South America, including the United States and Canada. The European Union ratified a Free Trade Agreement with Colombian in December 2012, but must be passed by each member country before being implemented. Colombia has an ambitious trade agenda and has initiated FTA negotiations with South Korea, Panama, Japan, and Turkey.
Regarding the U.S.-Colombia FTA, on May 15, 2012, the agreement went into force, immediately eliminating import tariffs on 80 percent of U.S. exports of consumer and industrial products to Colombia, with remaining tariffs phased out over one to ten years. Other provisions include strong protection for U.S. investors (legal stability), expanded access to service markets, greater intellectual property rights protection, market access for remanufactured goods, increased transparency and improved dispute settlement mechanisms (arbitration).
While this page presents you with a brief synopsis of the comprehensive information contained in the Colombia Country Commercial Guide, you can access other chapters here.
You can also use the link below to access a PDF version of the complete report.
For assistance in identifying specific areas of opportunity, and to receive tailored business counseling services, please contact the Commercial Service at the U.S. Embassy in Bogota: Tel: (571) 275-2519; Fax: (571) 275-4576/4575, e-mail email@example.com.