FTS-DOC ITA

Moderator: Linda Abbruzzese

February 21, 2008

1:30 pm CT

Coordinator: Welcome and thank you for standing by. At this time all participants are on a listen-only mode. During the question and answer session please press Star 1 on your touchtone phone to ask a question.

Today’s conference is being recorded. If you have any objections you may disconnect at this time.

I’d now like to turn the call over to Linda Abbruzzese. Thank you Ma’am. You may begin.

Linda Abbruzzese: Thank you. Welcome to the U.S. Columbia Trade Promotion Agreement Webinar. I am Linda Abbruzzese, International Trade Specialist for the Marketing Communications Office for the U.S. Commercial Service at the Department of Commerce.

For those of you who just joined, you can still log onto the Webinar by entering the URL Web site and pass code per the instructions that were sent to you by email.

We do have a few housekeeping details to make sure everyone gets the most benefit from this afternoon’s Webinar. You will be able to hear the presentation via your telephone and via – simultaneously via your computer.

If you are not hooked up to both please take a moment to do this. If you are experiencing any technical difficulties please press Star 0 any time during the presentation.

Now we will be taking typed questions. At the end of the presentation, we will have a question and answer session. We invite you to type in questions on your screen as they occur to you during the presentation.

There is a box at the bottom of the screen on which you can click and type your questions any time during the presentation. We’ll compile the questions and present as many questions as time allows after the presentation.

Typed questions which are not answered during the Webinar due to time constraints will receive personal answers via email after the Webinar. In addition, all listeners will be provided with contact information of the speakers which can help you will counseling, expert assistance or market research you may need to pursue opportunities in the Columbia market.

Now for those of you who just joined us and logged in, you can still join in our Internet conference. Now I would like to introduce Senior Trade Advisor for the U.S. Chamber of Commerce, Leslie Schweitzer.

Leslie Schweitzer created the trade roots initiative, the only sustained national grass roots international trade education program in the country. The program is designed to raise the public awareness of international trades particularly to small and medium sized companies.

Leslie was also responsible for the U.S. Chamber of Commerce Business Partnership Program with TOBB funded by USAID in Turkey in 2006. Leslie has owned her own business involved in international trade for more then 30 years.

Leslie Schweitzer: Thank you Linda. Good afternoon. My name is Leslie Schweitzer and I direct the U.S. Chamber of Commerce Trade Roots Initiative. And welcome to the Webinar on the Columbia Trade Promotion Agreement.

Thank you for joining us in learning about business opportunities in Columbia. I’m very pleased to note that we have more then 250 people that have registered for this Webinar today and we have invited over 1300 trade staffers from the Hill to participate as well.

The U.S. Commercial Service and the U.S. Chamber of Commerce are bringing this Webinar to you in cooperation on joint trade promotion authority efforts.

I’d like to welcome all the Chambers of Commerce, the U.S. Commercial Service clients and other participants joining us from all across the UDS to learn about how to do business in Columbia to help your position your company for further expansion in key industries once the Columbia Trade Promotion Agreement has been approved by the U.S. Congress.

Many of you have been part of the grass roots efforts the trade roots is doing across the country, working with the commercial service, the Chambers of Commerce, economic development offices, world trade centers and other organizations to better educate the American business community on the importance of the Columbia Free Trade Agreement.

We’ve just been in Arizona and Utah this week and have ten more cities on our agenda through the next few months. We’re going to be in Texas, California, New York, New Jersey, Florida, South Carolina, North Carolina, Arkansas and West Virginia and more.

Also we will be launching our Faces of Trade book around the country that features the success stories of small and medium sized companies that are doing business in Columbia. Thanks to all of you, we built a tremendous momentum and a growing coalition of trade supporters through our effort with D. R. (Kaftan) and most recently the Peru for trade agreement.

It’s so important that we’re all aware of the importance of getting congressional support to pass this agreement with Columbia. I might add on a personal note that I did business in Columbia for several years prior to coming to the Chamber and the opportunities for American companies of all sizes is tremendous.

We cannot pass this agreement without all of your help. And again, thank you. Your voice is so important.

I now have the honor of turning this presentation over to Chris Padilla, the Undersecretary for International Trade Administration. Chris Padilla was nominated by President George Bush on September 4, 2007 and confirmed by the U.S. Senate on December 19, 2007.

Chris is responsible for leading the International Trade Administration which participates in the development of U.S. trade policy, identifies and resolves market access and compliance issues, promotes American competitiveness in the strengths of U.S. companies in the global economy, administers U.S. trade laws and undertakes a range of trade promotion and trade advocacy efforts.

Chris also served as the Chief of Staff and Senior Advisor to Deputy Secretary of State Robert Zoellick with a particular focus on U.S. China policy, Latin America, Sudan and international economic matters. He was also the Assistant U.S. Trade Representative for inter-governmental affairs and public liaison and was heavily involved in building support for the Central American Free Trade Agreement, the U.S. Australia Free Trade Agreement and several other trade agreements and initiatives.

He has private sector experience working at AT&T and Lucent Technologies and I must add that all of us involved in trade are thrilled to have Chris as our fearless leader in this effort.

I’d like to introduce live online Undersecretary for the International Trade Administration, Chris Padilla. And Chris, thank you for being with us. I know you also have been spending a great deal of time traveling across the country talking about the importance of the Columbia Free Trade Agreement. Thank you for your support and your passion.

Chris Padilla: Oh, thank you Leslie and thank you all very much for joining us this afternoon to hear about the importance of the U.S. Columbia Trade Promotion Agreement. I’m going to take a few moments this afternoon to go through some slides to lay out what I think what the key arguments are in favor of the Columbia Trade Promotion Agreement.

First the arguments in favor of it from a political and economic standpoint and then I’ll use some common sense everyday examples to illustrate why this agreement is good for the United States and good for Columbia.

And later we’ll hear from two folks on the line with us from Columbia, Maggie Hanson Muse, our Senior Commercial Officer at the U.S. Embassy in Bogotá and Miguel Gomez who is the Executive Director of the American Chamber of Commerce in Columbia. And they’ll focus with more specificity on the commercial opportunities in this large and growing Latin American market.

So let me begin with an overview of the U.S. Columbia Trade Promotion Agreement. The objectives of this agreement are first and foremost to provide substantial access for U.S. exports in the large and growing Columbian market.

And for all of you on the phone who do business in the U.S. or Columbia, this obviously is one of the key aspects of this agreement and I’ll discuss in more detail how this agreement will open new opportunities for U.S. products and services in the Columbian market.

But a second objective that’s also important is that this agreement would promote political stability in the Western hemisphere with one of our closest allies in the hemisphere and strengthen in U.S. national security.

I want to illustrate what I think is one of the most compelling arguments in favor of the U.S. Columbia Free Trade Agreement and that is that we already have free trade between the United States and Columbia but it’s one way free trade.

Some of you may be surprised to learn that more than 90% of Columbia’s exports to the United States come into our country duty free already and have for 16 years under various trade preference programs that were first enacted by Congress as a way to help fight the drug trade in the Andean region.

But most U.S. exports to Columbia pay duties when they enter that country. And so you can see in this chart on Page 4 the very high percentage of imports that come into the United States from Columbia duty free and the relatively low amount of trade that we send down to Columbia from the United States that has that zero duty treatment.

Those of you who may have purchased flowers last week for Valentine’s Day for a loved one, now there’s a very good chance that those flowers came into the United States from Columbia and they came into our country duty free as they have for 16 years.

But the fertilizer that we make in the U.S. to send to Columbia to help grow those flowers or the plastic things in which the flowers are grown or the agriculture equipment that may help to do the farming in those flower farms, all of those pay tariffs when they enter the Columbia market.

Now in another important argument I think in favor of Columbia is that we have some recent experience with opening a market for U.S. products and it’s been a very positive experience. Some of you may remember about three years ago Congress had a very vigorous debate over whether or not to approve a free trade agreement with Central America and the Dominican Republic.

What the chart on Number 5 shows is the very first year after CAFTA was implemented the United States went from a trade deficit with the CAFTA DR countries to a trade surplus in the very first year and as you can see from the blue line on the top, total two-way trade increased dramatically after CAFTA was implemented.

This is because much as is the case with Columbia, we were already allowing almost all imports from Central America into the United States duty free for many, many years. The CAFTA Agreement opened their markets to our products and as a result our trade balance improved.

But there’s another important reason why this agreement is in U.S. national interest and that is because it will promote political stability. The Columbian government has undertaken a remarkable transformation of its country – of its entire country and society.

I had the opportunity to travel with Secretary Gutierrez to Columbia last fall and I expected to find a country of instability and violence much as you see in the American movies. What I found instead when we landed in Medellin, which used to be the drug capital of the Western hemisphere, was a city that had been completely transformed by opening up to the global economy.

Instead of being involved in the drug trade, people of Medellin now make their living growing flowers or selling tee shirts or blue jeans or baking cookies or making other products that are exported to the United States. The remarkable transformation of Medellin shows the transformative power of international trade.

On Page 6, the chart shows that one of the biggest problems that Columbia has had, which is violence, homicide against trade unionists in Columbia has gone down dramatically. Now some of the critics of the Columbia Free Trade Agreement say we shouldn’t have this agreement because too many union members are murdered in political violence in Columbia.

Well, in fact, there has been a very dramatic drop, at least an 80% drop, in homicides of trade unionists between 2002 and 2007. The Columbian government has set up a special sub unit to investigate crimes against those who are trying to organize labor unions. The Columbian government has instituted a number of special protection programs that protect nearly 7000 individuals including 1300 trade unionists.

Now the other piece of good new is that, in fact, the level of violence against trade unionists in Columbia is lower then the general rate of violence in society as a whole and both of those rates of violence have seen dramatic declines since 2002.

It’s important also to recognize that the United States and its taxpayers have made a very substantial investment in the success of Columbia and the transformation that we’ve seen in the last several years.

In 2000, under a bipartisan initiative begun by President Clinton and then Speaker of the House Dennis Hastert, the United States has invested many billions of dollars to help fight the drug trade and to fight the active terrorist insurgency that’s been going on in Columbia for many years and the result of this investment and commitment by the United States, we’ve seen remarkable results.

Since 2001 cocaine production is down by nearly one-third. Seizures of cocaine bound for the U.S. have increased by more then 100%. We’ve seen a significant decline in kidnapping and homicides and terrorist attacks and coca cultivation has declined 7% over the last five years.

Clearly, the bipartisan investment that the United States has made in Columbia’s success is working and a free trade agreement is the next logical step to building on the success of Plan Columbia.

Here are some more amazing statistics about the evidence of Columbia’s transformation. Homicides are down 40% over the past five years, kidnappings are down 76% over the past five years, terrorist attacks, down 61%. And as the next chart shows, this has all come at a time of tremendous economic growth in Columbia.

A 6.7% growth in the Columbia economy in 2007, one of the strongest growth rates in the hemisphere. Meanwhile the percentage of Columbians who live in poverty is falling from nearly 60% in 1999, when Columbia was on the verge of becoming a failed state in our hemisphere to about 45% today. Still high but remarkable progress has been made.

The next chart discusses on Page 11 how a free trade agreement with Columbia could strengthen U.S. national security. A free trade agreement would draw us closer to a country that has long-standing ties to the United States. You know, not many people recognize that Columbia is the only country in the Western hemisphere that is fighting an active terrorist insurgency on its own territory.

The (sark), which began as a Marxist Guerilla Movement but has since morphed into a drug cartel, thrives by running drugs and kidnapping children and the (sark), in fact, holds three American hostages among many others that it is holding in Columbia.

But Columbia has managed to fight this insurgency even while remaining true to the principles of democracy and free market. And that’s the model that we want to reward in our hemisphere. Columbia is an ally committed to democracy, freedom and the rule of law in a hemisphere where not every government is so inclined and the Columbia Free Trade Agreement is a way for us to send a signal that we will stand with our ally.

Importantly the Columbia Free Trade Agreement would be a part of a large network of free trade agreements that the United States has been building from the Bering Straight to the Straights of Magellan. And you can see on this map that Columbia would be another in a line of what could be an unbroken line of free trade agreements in our hemisphere.

Now I think all those arguments from an economic and political standpoint are pretty compelling but there’s another argument that I want to make and that is that the Columbia Free Trade Agreement will give American products a fair shake.

I talked about how so many Columbia products come in to our country duty free but our exports face terrorists when they go to Columbia and I think the best way to illustrate this is with a grocery bag of products.

And on your screens now I want to show you some examples of what I’m talking about. A lot of us probably had Columbian coffee for breakfast this morning. That Columbian coffee comes in to the United States duty free and has for 16 years. But I’m sitting here in front of my computer with a bottle of Pepsi made in the USA that would pay a very stiff 20% tax when sold in Columbia.

I mentioned the beautiful Columbian flowers that many of us bought for our spouses or loved ones on Valentine’s Day. More then 50% of the flowers sold in the United States come from the Andean region, many of them from Columbia and they come into our market and pay zero tariffs. And that’s good for us as consumers.

But the U.S.-made fertilizer that helps those flowers grow is charged 15% when it goes into Columbia. Baby carrots come into the United States and on to your dinner table duty free without paying any tariffs but a tractor made by Caterpillar in East Peoria, Illinois pays a 10% duty if it’s sold to a Columbian carrot farmer.

Pennsylvania apples pay a 15% tariff when they’re sold in Columbia but Columbian bananas enter the United States duty free. In fact, even the paper bags containing our groceries would be subject to a major tariff when sold in Columbia.

Now that doesn’t seem fair. But the good news is that in our shopping bag we have a coupon that will eliminate all of these taxes on U.S. exports to Columbia and will do so in most cases immediately. My grandmother was a faithful clipper of coupons and always said that if you throw away a coupon it’s like throwing away free money. Well the coupon in our grocery bag is called the U.S. Columbia Free Trade Agreement and it deserves a vote in the Congress of the United States.

I hope you’ll agree and you’ll work with us to build support so that Congress will give the Columbia Free Trade Agreement the vote it deserves so that we can build on the partnership between our two great countries and open new opportunities for American exporters in this large and growing market.

Now I’d like to turn it over to the commercial counselor at the U.S. Embassy in (Bogotá), Columbia, Margaret Hanson Muse, and the Executive Director of (Amsham) Columbia, Miguel Gomez. They’re going to talk to you more about the specific opportunities for U.S. companies to do business in this terrific opportunity – or this terrific market of opportunity.

Maggie has been with the U.S. Commercial Service for quite some time. She’s worked in West Africa and Latin America and India. Prior to her assignment in Columbia, she actively participated in free trade negotiations in Central America and Peru. She was previously in Costa Rica and developed a rural outreach program there and in Nicaragua. She’s created a high impact road show to visit 20 U.S. cities to explain the benefits of free trade and trade compliance to U.S. companies.

She also worked on the U.S. Peru trade promotion agreement including the telecommunications and customs chapters and has wonderful experience in the private sector having worked in Sprint, General Electric Company and All State Insurance.

The Executive Director of (Amsham) Columbia, Miguel Gomez also has extensive experience in the private sector in the flower industry, banking, finance, and association management. He also worked for the government of Columbia in administrative trade and served as Columbia’s ambassador to France.

In addition to serving on a number of private and public boards, Miguel is a consultant to the U.N. Development Program and writes a weekly column on trade for (Portafolio), a widely circulated business journal in Columbia.

So Maggie, let me turn it over to you.

Margaret Hanson Muse: Thank you very much Chris. I’d like to load our presentation and get started. Welcome to Columbia. The sun is shining outside and as you can see its marvelous diversity. In fact, diversity is the single word I’ve used to describe Columbia.

As you can see from these photos, Columbia has a diverse climate, vegetation, flora, (fauna) and diverse people.

These are some of the topics that we are going to cover today. Miguel and I will share the conversation so that you can have a change of voice from time to time.

At a glance, Columbia is the third largest in terms of population in Latin America with 44,000 people. It’s about three times the size of Montana or twice the size of France. I had to throw that in for Miguel. He’s spent a lot of time in France.

For anybody that’s a diving fanatic like me, Columbia’s territory includes San Andreas (Provedentia) and the Santa Casa (Lina) Arch (Peligos) where you can enjoy the fruits of Mother Nature below the sea.

For those of you who have an urgent need to travel very soon to Columbia, you can take Delta, Continental or American Airlines. They all run frequent non-stop service to four gateway cities here in Columbia from Atlanta, Miami, Houston and Newark into Bogotá. Medellin, Cali, Cartagena and Barranquilla.

You may note that the strategic geographic location of Columbia means that it has access to two oceans. You definitely should take a few Spanish classes before you travel. Think about putting your materials for sales and marketing and your advertisements in Spanish.

Columbians enjoy a high literacy rate of 94% and their government like our government enjoys a presidential system of government and a bicameral legislature.

Why Columbia? After listening and Chris was with us here in September, you really have to sit back and think about the sound bytes that you’ve been listening to for many years about Columbia and consider that Columbia is truly an economic miracle.

The country currently is experiencing an infrastructure boom. Marriott, Hyatt and Hilton are constructing large properties in the next two years. The Latin American Trade Mart which is something that is along the lines of the Dallas Trade Mart is under construction. The government is pouring millions of dollars into roads and mass transportation system concessions.

The Columbia – the government is also – the country, rather, is also stepping up its efforts to produce oil and natural gas as well as minerals such as coal, gold and emerald. The other thing that really exciting is the tourism industry, which welcomed over 1 million visitors, many of whom are from the United States, is experiencing a huge boom.

We have applications sitting on someone’s desk at the Department of Transportation for route access from Spirit Airways, Jet Blue and U.S. Air. American and Continental, as I mentioned previously, travel here but they’ve increased – requested increased frequencies in their route and Avianca, the flagship airline of Columbia has requested a direct flight to Washington D.C. and they have a co-chair with Delta.

One of the reasons why, or many of the reasons why people are interested in Columbia is because the workforce is well educated many of whom have been educated at U.S. universities, and highly motivated. Oh, oh, and I forgot to mention, the Blackberries. Your Blackberries, your Trios, your cell phones will work here in Columbia.

Columbia has never ever defaulted on its debt payments. It gained investment grade status which is D- according to Standards and Poors in September of this year. Only Mexico and Chile previously had investment grade status. Columbia is one of our strongest trading partners, the largest market for U.S. products in Latin America. And Columbians use U.S. standards in water, electricity and engineering equipment.

The growing population in Columbia enjoys purchasing from franchises such as McDonalds or KFC and watching World Cup Football by cable or direct TV. The cell access is available in people cones, it’s via cable and you can obviously do wireless Internet access in hotels. It is available although (unintelligible) limited.

This chart illustrates with the exception of one year, Columbia’s economy has grown steadily for 70 years. It also shows you the impact of exogenous factors such as the global economy meaning the Asian crisis that had a huge impact on Columbia’s economy and combined with the internal political and economic crises caused economic contraction in 1999.

But the takeaway from this slide is that the positive growth of the GDP has trickled down to the common people. You can see that it’s grown from – I’ll take you to the next page – $2,192 in the year 2002 to $3,614 in the year 2007. You’ll also see that as Columbia’s principles trading partner, imports from the outside has more then doubled, almost tripled and the U. S. has about a 28 percent market share of those exports in Columbia.

If you look at Columbia compared to other countries you’ll see that it has the largest GDP in the Andean regions and with its large population versus the other countries, it’s doing quite well in terms of per capita GDP.

Now Miguel will give you an idea of what Columbia was like in the past and how it’s changed to the present.

Miguel Gomez: Good afternoon. Prior to the 1990s Columbia was in a survival mode but this is a very different country today. There have been big changes. We used to have very low investment rates. Last year foreign direct investments in Columbia were around $8 billion. We used to have basically an informal business but had the biggest share of our economy.

The (problem) business sector is diminishing and formal business is gaining a big share of our market. I would like to highlight the (issuer securities). In the ‘90s, Columbia was in the middle of a very bloody war. This has changed. Security in most of the regions has improved and most of Columbian cities are today safe.

When it comes to some of the planning initiatives I would like to highlight two of them. The first is the competitive national system which enables Columbians who work on a long-term basis. The Columbian National Plan calls (unintelligible) Columbia 2019, improves Columbian productivity and competitiveness and passed very ambitious targets for peace, social justice, infrastructure, quality of life, productivity in Columbia.

And I would also like to share with you a very interesting program that was developed by the Columbian government and that is called the National Science and Technology Assistance which supports all of the efforts that are done in R&D and basically in sectors like the agri industry, electronics, telecom, IT, energy, mining, environment, health care, education, basic science, biotechnology and the development of ocean resources.

So this is a very different country today. There’s lots to learn from Columbia and I would surely encourage you to continue learning about what’s happening here.

When it comes to the past, we used to have high levels of corruption. There was an alliance between drug lords and politicians and we also were suffering from (unintelligible). But the president today is highly committed to fighting corruption at all levels. Dozens of congressmen and political figures are now arrested and are in trial.

Transparency and accountability is the main priority for President (unintelligible). We just modified our governmental current code and the government is fully committed to developing the government initiative that brings society to public initiatives.

This country has opened its economy since 1992. In those years we used to export $7 billion. Last year our exports were over $28 billion. They have multiplied by 4 in that period. Columbia has a very diverse economy. We export crude oil, gold, coffee, nickel, bananas, flowers, gold, electricity, textiles, (unintelligible). Columbia exports today more then 900 products over to all the 170 countries in the world.

I would also like to share with you some of our strengths. We have a controlled inflation. We never lost control of our main economic indicators. Inflation rate was 5.6, like last year. And more then 11 million students attend primary and secondary school in Columbia for a total enrollment of 82% compared to – a (unintelligible) of 88%, excuse me, compared to 82% in the year 2000.

We have a very strong currency particularly due to our high levels of foreign direct investments. And we’ve always had free elections. This is a guarantee that our democracy is strong and solid and that it has been able to cope with many of our big problems (unintelligible). Education is with no doubt a top priority of the Columbian government.

When it comes to challenges, we have to acknowledge that the very long (walk) that we had to deal with had very severe consequences. Basically we still need to find a peaceful solution to the internal conflicts. We need to work harder defeating corruption and there’s a huge problem concerning displacement that has basically touched peasants and people in rural areas that have been forced to leave their farms.

Poverty is still very high but we train so that our higher economic growth is helping poor people live and have a better income. When it comes to the economic issues, the large (unintelligible) economy is still an issue that the government is dealing with even if we are now experiencing much business from the environment, (unintelligible) is also a matter that you should be concerned with.

Our judiciary system is improving but it is still very slow. Tax evasion is still over 30% in Columbia. And small and medium sized businesses have difficulty accepting the financial (sector).

Finally I would like to highlight Columbia’s democratic ability. We are perhaps one of the oldest democracies from Latin America. President Uribe was reelected almost a year ago. He’s a very popular president still, perhaps the most popular political figure in the country.

During our last elections, the coalition that is backing (President Uribe) got a very strong majority, most of the (unintelligible) of Columbia in the department. Uribe has been able to unite the country on many issues especially when it comes to our sensitive relationships with our neighbor Venezuela.

And finally let me stress the security improvements. The figures speak for themselves. As you can see homicide rates are the lowest in 19 years, kidnapping, terrorist attacks, are down by very high percentages, and during the last few years the government has successfully immobilized more then 1700 paramilitary groups. This is something that should encourage other paramilitary groups to follow the same path and accept the benefits from the justice system that is now in place.

So this is a very different country. I’ve lived in Columbia all my life and you cannot imagine how difficult it was to survive. Columbia is now a much different country. This is a country that you should visit and that you should be interested. There’s lots of business to be done here and Columbians like Americans. They like the U.S. and they would love to see more Americans come in to invest and trade in Columbia.

Margaret Hanson Muse: Thank you Miguel. It’s back to Maggie again and emphasize –reemphasizing some of the points that Undersecretary Padilla made. I want to let you know that Columbia isn’t waiting for us and our free trade agreement. They’ve already signed with Chile back in 2006. They signed with the Central American triangle in August 2007. They’ve begun negotiations with a small part of the European Union and they also have begun negotiations with Canada.

This will obviously have implications for U.S. exports if these competing countries are able to send their goods into Columbia duty free versus our goods that have to come in under a tariff.

To just reiterate – and I love this graphic. This is actually a part of Bogotá that’s quite beautiful. You’re going uphill and sometimes it feels like it’s a bit of a challenge. If we’re able to meet these challenges listed on this chart via the free trade agreement looking at it as a tool to create a sustainable relationship – commercial relationship – between these two countries we will have accomplished a great deal. It benefits everyone. It’s not a one-way street. It’s definitely two-way.

It helps people to do business more easily with each other especially small business. There are clearer rules of the game for small business and that means that they’ll be able to bring products in and create new opport – business opportunities for Columbians.

I especially want to emphasize that women entrepreneurs do extremely well here in Columbia. Some of my success stories that I report back to headquarters have to do with people, women, coming, going to trade shows, signing up distributors and having an extremely positive experience.

Let’s talk for a minute about some of the best prospect sectors in Columbia. Obviously security and safety equipment, fire fighting equipment, (coming) to the police as well as private businesses and homes is a high best prospect. One that isn’t on this list that has just blossomed in the last three months is hospital equipment. We had a visit of the U.S. export/import bank’s Vice President John McAdam and we spent time visiting ten hospitals and Columbian hospitals have money to spend acquiring new equipment and are very, very interested in, not only excellent programs, but also hearing from U.S. exporters of hospital equipment.

You also heard mention of oil and gas. The refinery in Cartgena is being rebuilt thanks to the good offices of the U.S. Trade Development Agency through their feasibility studies that have been ongoing since 1996. Chicago Bridge and Iron, Chevron and Exxon Mobile are going to be contributing to building out a new environment so these (unintelligible) in Cartgena. Also you have opportunities in telecommunications and financial services.

On just the pure services side, IT, anything that has to do with architecture, construction, engineering, entertainment, very big businesses here in Columbia along with consulting and health care.

And just so that you know that the commercial services here to help you, we are planning to bring fire delegations to these particular shows throughout the country in the coming quarter. It’s a great place to get to know and meet with Columbians.

We just have five tips. Stay in touch with my office here at the U.S. Embassy, be informed about doing business here in Columbia, request our international company profile. We will do a background check for you. It can save you a lot of time and heartache, because if the background check turns up someone that’s listed on the Clinton or the Office of Foreign Assets Control Treasury Web site, you are not allowed to do business with them.

And use situational awareness for your security that – act as you would in New York City, as you would in Columbia. Just so that you know, you can go to our Web page and find out more information about doing business in Columbia. We also have a mother Web page called Trade America, so please consider doing business in other countries in Latin America as well. And you’ll find out all about our products and services through that Web site.

And by the way, this guy over here is Juan Valdez. That’s his donkey, (Conchita), and they will be on hand to great Secretary Gutierrez when he brings his next delegation to Medillan in a week or two.

These are our partners here in Columbia, (Ansham) as well as the Council of American Enterprises, also President Uribe maintains an excellent Web site to help orient people to Columbia and you have our regular export.gov and Buy USA Web site.

So please, my – the commercial attaché’s name is (Tanya Colt). She takes care of our product service delivery and I’m taking a look at things as they go on around the country and also in the region. We welcome your calls and look forward to hearing from you if you’d like to do business in Columbia. Thank you.

Woman: Thank you.

Linda Abbruzzese: Thank you Maggie and also to our other speakers, Miguel, Chris and Leslie. Now we will have our question and answer session and Undersecretary Christopher Padilla will be monitoring the questions.

Christopher Padilla: Okay, thank you. We have a number of questions in the queue. And what I’m going to do is read the questions and either I’ll answer them or I’ll ask one of my colleagues to answer them.

First let me say we’ve gotten a number of questions about providing all of you with a copy of these presentations via email or the Web. And to answer that one, I’m actually going to turn it over to Linda.

Linda Abbruzzese: Thank you. We will have a present – the PowerPoint presentations as well as a copy of today’s Webinar along with the transcripts on our Web site at www.export.gov/ds under the title View Webinars. Once again, that Web site is www.export.gov and go into the link that says View Webinars. I’ll turn it over to Christopher Padilla.

Christopher Padilla: Okay, next question, we’ve had a question from (Joe Kolarmy) who asked, when will the free trade agreement begin? And we received several similar questions.

The answer to that question is it depends on Congress. Congress has to vote to approve the trade agreement before it can go into effect. The administration hopes that Congress will take the agreement up very soon and that we will be able to have the agreement in effect before the end of this year.

But of course, it all depends on whether Congress will give the agreement an up or down vote. I would note that the Columbian National Assembly has already approved the agreement and as Maggie mentioned, a number of other countries are negotiating with Columbia so we can’t just assume that if we don’t proceed the rest of the world will stand still. So we hope that the agreement will begin very soon.

The next question came from (Patrick Steininger) and he asked whether the current duties paid now and in the past by the U.S. to get products into Columbia go directly toward the Columbian government.

And the answer to that question is yes. The Columbian government collects tariffs on products when they’re brought into the country just as the U.S. government collects tariffs when products come into our country, although as I said, in our case we don’t collect very many tariffs on the products coming in that we (unintelligible) on Columbia.

Margaret Hanson Muse: Chris, if I may add something, on top of these duties there’s also a 16% value added tax and other taxes so any product that’s coming in with a high tariff of 15% or 20% you can end up being up to 50% more then the original product cost.

Chris Padilla: Good point, another reason to try to cut those duties. The next question came from (Glason Miller) who asked – her question is, an FTA agreement may be difficult to embrace if the Department of States still posts travel warnings for Americans to travel to Columbia. My company would not allow travel to Columbia due to the high risk assessments by the Department of State. Are there any comments on whether this proposal translates to changes at the State Department on their views of Columbia?

Let me say a word about that and then I would ask Maggie also to chime in from the point of view of an officer serving in our embassy in Columbia. I would say this, first I think it’s important to remember the remarkable progress Columbia has made.

You know, more then a decade ago Medellin was the most violent city on the planet, had the highest murder rate of any city in the world. Today the murder rate in Medellin is lower than the murder rate in Baltimore.

When I traveled to Medellin last fall, I got off the plane and I’ll tell you, all I could think of was the scene from the movie, “Clear and Present Danger,” where Harrison Ford, if you remember, gets off the plane in Columbia, gets into a motorcade and he gets attacked by narco terrorists. I was a little nervous about that. As we’re driving in the motorcade into the city I was thinking about that but then I looked out the windows and I saw sidewalk cafes packed with people at 10:00 on a Friday night. I saw kids playing soccer in the streets. I saw women walking together alone on the streets.

This is a society transformed. Certainly it’s a city transformed. And so while, yes, there may be a State Department travel warning, because some parts of Columbia, particularly in the south and east where a (unintelligible) terrorist operates, are quite dangerous.

But in cities like Bogotá or Medellin or Barranquilla or Cartagena, I think if you take the normal precautions it’s certainly safe to do business. Maggie, do you want to add anything?

Margaret Hanson Muse: Yes I do. Thank you Chris. I’d like to add that you need to read the posting to the Web site carefully. It does not ban or advise against coming to Columbia. It urges you to exercise caution. And I guess I’m proof positive that it’s okay to be here because I have a 15-year old daughter loose in the streets who’s really beautiful and lots of young Columbian guys calling our house. And my daughter enjoys a social life. I’m not worried about it and I guess really it’s a situational awareness. I would advise her to do the same here as she would do in Washington, D.C. or New York City or San Francisco or Los Angeles or Chicago or Iowa City. Just use situational awareness.

The final point to make is that cruise ships have quadrupled their stock within the last three years. They’re up to over 250 a year in Cartegena. It’s really becoming a Mecca for tourism. We have Hard Rock Cafes that have opened in Cartegan and Bogotá. I mentioned some of the other franchises.

People from Europe are buying property left and right for retirement homes here in Columbia. Once again, I guess the perception is that if you use situational awareness as if you were in any big city, you should be okay here in Columbia. Certainly my women clients have come here and I have not had one complaint and they have done quite well. They’ve sold a great deal of their product.

Chris Padilla: Thank you Maggie and I know we have about eight minutes left so I’m going to try to get through as many of these questions as I can in the time remaining. (David Renner) asked where he could get a copy of the book, “Faces of Trade,” that Leslie Schweitzer mentioned. Leslie, are you still on?

Leslie Schweitzer: I am and if you would like to email me it’s lschweit@uschamber.com and we will send you a copy of the book.

Chris Padilla: Thank you. That’s lschweit, s-c-h-w-e-i-t@uschamber.com. The next question came from (Jeffrey Baker) who asked, what if anything is Columbia doing to halt the spread of malaria? Maggie.

Margaret Hanson Muse: Environmentally what Columbia is doing is urging people to do what normally you’d do in malaria prone countries. You have to not be outside at a certain point of time, you use products to cover up. It’s done by a public cam – health awareness campaign. And of course, there’s the distribution of medicines that are anti-malarial depending on which type of mosquito it is.

Chris Padilla: Thank you. Next question comes from (Blanca Ramirez) who asks, will industrial goods be exempt from tariffs immediately? And (Blanca), the answer to that question is most of the products covered by the free trade agreement will go to zero tariffs in Columbia immediately on the agreement taking effect.

There are a few exceptions and most of those exceptions are in actually the agriculture area where tariffs will be phased out over a five or in a very few number of cases, ten year period but the vast majority of products, well over 85% of industrial products that the U.S. sells to Columbia will go to zero immediately under the free trade agreement.

The next question is from (Jorges Hallimio) who asks, what specific opportunities are there in the area of renewable energy? Perhaps Maggie or Miguel, would you like to take that one?

Miguel Gomez: Well yes, Columbia is becoming a very interesting spot for bio fuels. The government is developing large areas for crops that are linked to bio fuels and especially in the Eastern part of the country there’s lot of land available and therefore the government is trying to develop those areas with very interesting crops, basically palm oil.

Then there is the construction of a small refinery in Cartagena. That project is already underway and Columbia expects to be exporting bio fuel in the next three years. Today in the newspaper an article concerning that project and if someone is really interested we could perhaps translate it and send it to them. I think Columbia has an interesting potential in this sector.

Margaret Hanson Muse: I’d just like to add that if Mr. (Hallimio) would like to email us afterwards we can send our report on renewable energy and I wanted to alert you that the Department of Energy along with the Department of State and the Department of Commerce is planning to do an energy roundtable later on this year, the focus of which will be renewable and bio.

Christopher Padilla: Thank you. (Frank Castro) asked several questions regarding the environment in Columbia for pharmaceutical trade. He asks about the protection of intellectual property for pharmaceuticals under the agreement as well as whether there’s any relation between the U.S. Food and Drug Administration and in (Vema).

Margaret Hanson Muse: Regarding the protection (free) that’s in – for – intellectual property in Columbia, Columbia actually has an excellent regime where they fall down where – which is the same as many other countries in enforcement. And that’s a resource issue. We in the U.S. government will be running an ITR seminar in – next week for small businesses to help them, make them more aware of the need to protect intellectual property to gain more support from the Columbian population of business people and we will also be running a seminar in April because as you may know, U.S. (PTO) is a part of the Department of Commerce and we will be collaborating with our Western hemisphere regional attaché, (Dorian Medurkavich) and (Jaqueline Morales) out of PTO to train judges, prosecutors, policemen and mayors on the need to defend intellectual and put forward stiffer sentences.

Pharma has an active organization here that’s in touch with the commercial service. Once again, if you contact us we will be able to send you our country commercial guide and there’s a section totally dedicated to ITR and its defense in Columbia.

Christopher Padilla: Okay, in a similar vein, (Manny Zamora) asks about the market for refurbished medical and surgical equipment. What are the regulations and is there an interest on behalf of Columbian hospitals?

Margaret Hanson Muse: There – actually it’s prohibited to send used equipment, however, under the agreement, what our government was able to negotiate with the Columbian government is the acceptance of remanufactured equipment.

So your case we would have to look at carefully and see whether or not it would qualify under the new terms of the agreement. But currently you are not allowed to export used or refurbished equipment to Columbia.

Christopher Padilla: And this is an important point. This – in many areas now including auto parts and other areas, refurbished or used equipment is banned from sale in Columbia but under the Free Trade Agreement, once it takes effect, certain remanufactured products would qualify to be sold.

So as Maggie said, if the medical and surgical equipment meets the criteria of the agreement for remanufactured products, it could be sold.

The next question is from (Steven Myers) who asked about the market for selling copper rods, wire and bus bars. Is Columbia a good possibility for these types of materials?

Margaret Hanson Muse: Yes it is because of the infrastructure that they built here by leaps and bounds. It just depends on which industry you’d like to sell it to, but it’s an excellent market.

Christopher Padilla: Great. (Claudia Hernandez) asks whether the Columbia FTA will include duty free treatment for originating apparel goods or a tariff preference level program.

And (Claudia), the answer to that is that most apparel made in Columbia today is eligible for duty free entry into the United States under one of our one-way tariff preference programs provided that the apparel uses fabric and yarns that originate in the United States.

You asked also – and that would continue under the Free Trade Agreement and be made permanent. So that would be a positive thing for trade and apparel and textile. You asked about a tariff preference level program. The Free Trade Agreement does not contain a TPL, neither did CAFTA accept in one case and that was for Nicaragua.

Margaret Hanson Muse: I’d just like to add that the International Trade Administration sent two analysts to Columbia (Text) in January this year. We did a tour of about ten textile plants. These plants are amazingly modernized. They contain tons of U.S. equipment especially cutting equipment (unintelligible) with efficiency. We would like to have a large business allegation to accompany us next year in – at Columbia (Text) in January.

Christopher Padilla: Thank you. (Romid Patel) asks, his company provides technology services for homeland security and telecommunications. How might he get a list of opportunities to provide proposals in Columbia?

Margaret Hanson Muse: Come and see us- -her in the commercial service. You may not be aware that the (crew) Plan Columbia and U.S. government operates in several programs and we seek to link U.S. providers of goods and services to our embassy operations that you send in order to train the Columbian military.

Besides that, there are also applications outside of what the U.S. government is doing but we have a program to help you get a jumpstart in that area.

Christopher Padilla: We have several questioners who asked about the health care market in Columbia who want to sell to Columbian hospitals or other health care providers. Maggie, does the commercial service have information on opportunities in the Columbian health care sector?

Margaret Hanson Muse: We do. We – this is actually a pet project of mine because one of the major clinics, the premiere clinic is about to rebuilt itself and we are trying to put together a delegation of about 12 hospitals to come to the United States to go to a hospital show and also to visit different hospitals in the country.

So if you have a specific interest, please contact commercial service Bogotá and we will link you up with these opportunities. Export/Import Bank is excited and wants to provide financing for these types of projects. So we – I can also connect you with the Export/Import banker that would be interested in supporting your deal.

Christopher Padilla: Thank you. (Chuck Asbaugh) asks, he had heard that there may be some problems getting profits out of the country once business has concluded which is different then just getting the tariffs lowered. Maggie or Miguel, do you want to talk about repatriation of profits?

Miguel Gomez: No, I think there’s no problem getting the money out of Columbia. Our exchange system is open and (unintelligible). This is not like Venezuela where you really have trouble getting your profits by the financial system.

Columbia’s financial system is fairly well developed. You have U.S. banks here, the Capital City (Helm) Bank, so in general terms, people don’t complain about the exchange system. We only have one exchange rate which is very concise and you can buy U.S. dollars and sell U.S. dollars with no problem so that’s really not an issue. You shouldn’t be concerned about the exchange system here in Columbia.

Christopher Padilla: Thank you. (Robert Wilson) comments that many of us who do business realize the benefits of STAs but that the general population in the U.S. doesn’t understand these things as well and he asks, how can we as business owners help get the correct information out to the general public about the real benefits of STAs? Leslie, maybe you want to comment on this.

Leslie Schweitzer: Well that is something that I would suggest that you perhaps go to the trade roots Web site which is www.traderoots.org. And what we tell you in the Web site are ways that you can communicate with your elected officials. We give you information that you can – that relates directly to your local community and the chances are pretty good that we’ll probably be in your community at some point over the next several months.

We do literally hundreds of programs on free trade agreements in general but certainly right now on Columbia. We’ll be starting a program on Korea and we’re doing – we’ve been doing them on China over the course of the last five years.

So it is – it’s music to my ears because there’s nothing more important then trying to get these realities of the free trade agreements, the information out there. We unfortunately – the business community sometimes is very quiet about these opportunities and about the success that’s really been realized due to the Free Trade Agreement so it’s time that we be much more vocal so again, please contact me if you’d like more information but go to our Web site.

We do have local information on there and we certainly are more then willing – you can call us directly here at Trade Roots and we would love to get you more involved in our advocacy efforts so we can actually get the truth out about the success of these trade agreements.

Christopher Padilla: Thank you.

Margaret Hanson Muse: I’d also encourage you (Chuck) to contact your local U.S. exported systems. I’m not sure where you’re located but they can tell you about our District Export Counsel, our DEC. You can become a DEC member. You can participate in what are called (ITAC) meetings which is the International Trade Advisory Board that talks to people like Undersecretary Padilla saying these are our needs as U.S. exporters and so that is another way to have a dialogue on the Free Trade Agreement.

Christopher Padilla: Okay, thank you. We have quite a few questions remaining. We’re at our allotted time but I’m going to take just a couple more so we can try to get through as many questions as possible. Those questions that we’re not able to answer live online we will get back to you electronically. But let me just try to go through a couple more.

This is another question about a sector opportunity. (Gary Gudmanson) asks, what are the export opportunities to Columbia for chemicals, petro chemicals and plastics?

Margaret Hanson Muse: Huge. Plastics are a best prospect once again this year in our analysis. Petro chemicals, chemicals, it’s – this is an oil and gas producing country. There’s enormous opportunity here.

Christopher Padilla: Great. Let’s see. Let me go to the next one. We’ve had a couple of questions including this one from (Joe Machado) and there were several others on this about clearing Columbian customs and concern about transparency and customs clearance procedures.

I know that the trade agreement does contain provisions to improve the administration of customs in Columbia but perhaps Maggie or Miguel, you’d like to take this one.

Margaret Hanson Muse: There are definitely issues beyond the customs group here. If they take a long time that means money to an exporter. If you have a problem, call us. We are very good at getting shipments unstuck. We like to do that. It’s called commercial diplomacy and so if you have an issue let us know.

They are working hard to modernize their computer system and they realize that under the FTA they’re going to be required to clear goods in 48 hours. It’s just good business for everyone. It means they’ll have to empower the private sector to do more for them and that will build a better business relationship between the public and private sector.

Christopher Padilla. Okay, thank you. And finally there are several questions asking about the impact of the (Fark) and the relationship with Venezuela on business in Columbia and the Columbian economy and whether or not some of the recent tensions in this area have affected the Columbian economy. Miguel, would you care to take that one?

Miguel Gomez: Yes, well basically these are two countries that have two different economic models. Columbia is a free trade (unintelligible) business country. Venezuela has chosen a different organization. We have a very long border. It’s what we call a hot border because of lots of points in which people enter and leave Columbia and Venezuela.

It is very difficult to keep control of that border and therefore the (Fark) definitely use Venezuela as a safe haven. In the last few months, there has been a rising tension between both governments. Venezuela has threatened Columbia with commercial measures against our exports. But until now I think trade is still moving across the border.

Our ideological systems are very different. President Chavez would like Venezuela to be a socialist country and is making major changes in the Venezuelan economy. Columbia has chosen a very different line and we want to stick to free trade and free enterprise.

So I would say the tension is there. I don’t see any possibility of having any military confrontation between both countries. And sooner or later I think Venezuelans are going to have to understand they are following the wrong path. But Columbia is willing to explore a peaceful measure that will diminish the tension between both countries.

We have to be very cautious. Venezuela is our second largest customer after the U.S. and we also have to be very cautious because we need the Venezuelan government to help us fight not only the Guerillas but also drug trafficking.

We see Venezuela having an increasing role in drug trafficking and so the efforts that are being conducted in Columbia surely need the help of the Venezuelan government. If Venezuela doesn’t cooperate it’s going to be very difficult for us to continue fighting successfully drug trafficking.

So these are different models, different ideological or (impatience). I think Columbia has chosen the right way and I think it’s paying. We see those changes and we see Columbian moving ahead which I don’t think is the case in Venezuela.

Christopher Padilla: Well thank you very much Miguel and thank – I want to thank Maggie and Leslie and all of you for participating. We’ve answered most of the questions that folks have submitted. We didn’t get to every single one of them but we’ve run out of time. Those questions that we didn’t answer, we’ll get back to you electronically. So now I’d like to turn it over to Linda for a quick wrap up and logistics and thank all of you for participating this afternoon.

Linda Abbruzzese: Thank you Chris. Everyone, I’m afraid that is all the time we have. And remember for those of you who’s questions we didn’t answer, you can expect a reply via email from one of our speakers shortly.

And for questions that occurred to you after this Webinar, please do make note of the contact information on your screen. You can contact any one of our speakers at any time. So please take a moment to write down their contact information.

Also please do check out the Web site at www@export.gov for more information on international trade. And once again to view a tape of this archive of this Webinar along with PowerPoint slides in a transcript, you can go to www.export.gov and go to the link where it says view Webinars.

Thanks to everyone for joining us and thanks to our speakers. Please check your email boxes for more information on upcoming Webinars. Thank you and good bye.

Coordinator: That concludes today’s conference. Thank you for participating and you may disconnect at this time.

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