Colombia, home to nearly 43 million, is the third largest country in Latin America in terms of population and fourth in terms of size. Considered the crown jewel of Simon Bolívar’s military campaigns, the Republic of Colombia, encompassed Ecuador, Venezuela and New Granada when it achieved independence from Spain in 1819. Ecuador and Venezuela separated from the union in 1830 and in 1886, the country became the United States of Colombia.
Occupying the northwestern most corner of South America, Colombia’s maritime borders are the Caribbean Sea and Pacific Ocean; it shares eastern borders with Venezuela and Brazil and in the south with Peru and Ecuador. Colombia is one of the world’s most diverse countries in terms of climate, flora and fauna. Part of the Pacific Ring of Fire, its landscape reflects extremes in altitude and temperatures ranging from snow capped volcanoes, to tropical rainforests, to semi-arid deserts to savannahs and pine tree forests.
Colombia’s track record of consistent growth during the last 30 years positions its economy among the best in South America. This record was broken only once by a recession in 1999. Traditionally, Colombia relied on agricultural and natural resource exports. Of late, the Colombian economy reflects greater diversification: manufactured goods, textiles, agribusiness such as cattle and cut flower exports and a thriving tourism industry that capitalizes on the country’s cultural diversity. People often associate Colombia with the image of Juan Valdez, the “the quintessential cafetero” who with his mule and mountainous backdrop symbolizes “Café de Colombia”. In fact, this icon embodies the old and new Colombia - - the global branding of a traditional product which shows Colombia’s growing appreciation and respect for intellectual property rights.
Colombia’s rebound from the 1999 recession is credited to the successful government of the current president, Alvaro Uribe, who is focused on improving security conditions across the country and particularly in Bogotá. The Uribe administration has morphed the once sluggish economy into an export-driven machine characterized by open markets and fiscal prudence. In May 2007, Business Week named Colombia “the most Extreme Emerging Market on Earth” and on June 12, 2007 the rating agency Standard and Poor’s deemed Colombia external debt as investment grade. Colombia is the third Latin American country after Mexico and Chile to achieve this rating.
Bogotá, the capital, is home to ten million people. As a city, it is vibrant and growing, engendered by an increasing sense of confidence in the country and its economic potential. Visitors to Bogotá remark on the number of construction sites sprawled across the city and the cosmopolitan atmosphere. More high-rises are under construction than in Manhattan and Los Angeles. Thanks to President Uribe’s security measures, Bogotá today is an economic success story of cafes, hotels, restaurants, and affluent shopping centers mixed in with historic walking neighborhoods. Beyond Bogotá, Colombia is known for it museums and handsome colonial architecture. Colombians are rightly proud of their long-standing cultural and intellectual tradition that has produced noted writers such as Gabriel García Márquez, artists such as Fernando Botero and musical icons Shakira and Juanes.
Also on the rise is the city of Medellín, a city of 2.5 million, once the haunt of the notorious drug lord, Pablo Escobar who was killed in 1993. No longer the deadliest city on earth, Medellín, is the heart of Colombia’s textile industry, home to major regional trade fairs and is a commercial flower-growing region. Today’s Medellín, is widely regarded in Colombia as a clean, well-organized and lively economic community. Ultra-popular Mayor Sergio Fajardo, whose approval ratings were 80 percent in July 2007, is largely credited for the city’s transformation. For example, during the height of Pablo Escobar’s rein in 1991, the city averaged 381 murders per 100,000 inhabitants. Fifteen years later, the city averaged 28 murders per 100,000 inhabitants, nearly half the rates for Washington, DC and Baltimore. The once bullet-riddled neighborhoods are coming to life thanks to public libraries, art museums and well-designed public parks. The city boasts a first rate transportation system, "Metro", which is the only public transit subway system in Colombia and includes a cable car link to slum areas on the hills. Medellín has more Internet connections than any other Colombian city and is home to the Museo de Antioquia which houses the works of Fernando Botero. It is also the fashion capital of Colombia. Each year the "Feria de Las Flores" (Flower Festival) attracts visitors from all over South America for parades and conventions. Medellín's historical traditions are evident in Pueblito Viejo, a squared section of town with homes and shops preserved as they were 100 years ago.
Colombia’s Economic Performance
Colombia’s economic performance during the past six years has been an economic miracle. Between 1998 and 2002, the El Nino phenomenon and the Asian financial crisis affected the Colombian economy severely causing the downgrade in sovereign debt below investment grade. Four years later, the Uribe Administration’s recovery and security program brought a complete turnaround. By the end of 2006, GDP growth was 5.6% and by the end of 2008, the IMF Economic indicators project GDP to reach $156.7 billion.
Colombia at a Glance
(Source: CIA World Fact book/U.S. Department of Commerce/U.S. Census Bureau)
Total Area |
1,138,910 sq km (slightly less than twice the size of Texas) |
Population |
44,375,598 (July 2007 est.) |
Commercial Center |
Bogotá, Medillín, and Cali |
Languages |
Official: Spanish |
Government Type |
Republic; executive branch dominates government structure; bi-cameral legislature |
Natural Resources |
Petroleum, natural gas, coal, iron ore, nickel, gold, copper, emeralds, hydropower |
Primary Industries |
Textiles, food processing, oil, clothing and footwear, beverages, chemicals, cement; gold, coal, emeralds |
Work Force |
Total: 20.81 million Distribution: agriculture 22.7%, industry 18.7%, services 58.5% |
Imports |
Petroleum and petroleum products, plastics, machinery, vehicles, iron and steel, wheat, paper |
Exports |
Petroleum, coffee, coal, nickel, emeralds, apparel, bananas, cut flowers |
Main Imports from the U.S |
Agriculture and industrial machinery; corn, wheat, soybeans, and organic chemicals, plastic raw materials, automotive parts, security, software, and electrical equipment, and aircraft and parts |
Main Exports to the U.S. |
Mineral fuels, cut flowers and woven apparel, coal and petroleum products, bananas, coffee, precious stones, fresh fruits, plastics, textiles, leather products and handicrafts |
Impact of President Uribe’s Government
Since President Uribe’s election in May 2002 (and subsequent re-election in 2006), Colombia has become one of the most stable economies in the region. Good government policies, steady growth, low inflation and plenty of opportunities make it more than worthwhile for exporters and investors to take a serious look at Colombia.
 | Real economic growth for 2006 was a healthy 5.6%, with an inflation rate of 4.4%. Projected growth for 2007 is expected to reach 8%. GDP per capita has increased to over USD 3,000, aided by the appreciation of the Colombian peso in the last year |
| On June 12, 2007, Standard & Poor raised Colombia's foreign credit rating from BBB- to BB+, in light of improved fiscal performance, making it the third Latin American country to obtain this rating, along with Mexico and Chile. |
| OPIC and EXIM programs are available in Colombia. |
| Paramilitary demobilizations nearly completed, with reduced attacks on public structures. |
| For 2006, the exchange rate closed at COP 2,200 per $1. |
| Net Foreign Direct Investment in Colombia for the period of January – September 2006 reached US $4.35 billion. |
| The stock of U.S. foreign direct investment (FDI) in Colombia in 2006 was approximately $4.897 billion. The petroleum, natural gas and coal mining, chemical, and manufacturing industries attract the greatest U.S. investment interest. Key U.S. companies include: General Motors, Occidental Petroleum, ChevronTexaco, ExxonMobil, Microsoft, Dell Computers, Kimberly Clark, McDonalds Corporation, KFC, Amway, Coca-Cola, General Electric, Merck, Continental Airlines, Delta Airlines, and American Airlines among others. |
| According to the Latin America Trade Coalition, more than 8,000 U.S. companies export to Colombia, 84 percent of which are small and medium-sized firms. According to the Department of State, at least 250 U.S. companies have business operations in nearly every sector of the Colombian economy. |
| During 2006, US imports from Colombia reached $9.2 billion, and exports from the United States to Colombia totaled $6.2 billion. Colombia is currently the 29th largest trading partner for U.S. goods. |
| Consumer price inflation fell from 4.9 percent in 2005 to 4.48% in 2006. |
| Although security concerns continue to stem from the 40-year-old guerrilla war, the Uribe Administration’s policies have dramatically reduced terrorist attacks, kidnappings and crime. Kidnapping was reduced by 72%, homicides reduced by 37%, terrorist attacks reduced by 63%. |
The U.S.-Colombia Trade Promotion Agreement Special Features
Free Trade Agreements (FTAs) are the cornerstone of current U.S. foreign trade policy. Since 1992, the U.S. has implemented fifteen (seven of them with Latin American countries) FTAs, creating free and open markets worldwide for U.S. goods and services. FTAs have played a significant role in support of recent economic growth in Latin America. The advent of the US-CPTA has fueled GDP growth in Colombia increasing it from 4.0% to 5.6% between 2004 and 2006.
Corporate Social Responsibility (CSR)
One of the greatest challenges faced by U.S. exporters is establishing local ties within foreign markets that go beyond pure business. Too often U.S. companies are viewed locally as profit-hungry machines indifferent to the community of consumers it serves. This common misconception is being corrected in Colombia through a joint project between the U.S. Department of Commerce and the Association of American Chambers of Commerce in Latin America (AACCLA) that recognizes the contributions of U.S. companies to economic prosperity and social development.
In order to combat the self-interested image of U.S. businesses, the USDOC and AACCLA have undertaken a campaign to highlight U.S. contributions to Colombia’s economic prosperity. Total U.S. investment in Colombia, the number of U.S.-supported jobs and U.S.-added value to Colombia’s GDP are among the many statistics the project calls upon to change Colombian misconceptions. As a result of these efforts, the Colombian public is more aware of the significant role U.S. companies play in ensuring their economic well being.
The USDOC and AACCLA highlight CSR initiatives such as these to demonstrate how U.S. companies have invested themselves socially with long-term commitments to the Colombian people.
Additionally, USAID- Colombia recently sponsored the First Colombian Corporate Social Responsibility Fair. Seven USG/USAID-funded projects participated in this fair, organized by Corferias from August 15-17, 2007 as part of their "Responsible Colombia" program, and supported by several entities including Acción Social, the Bogotá Chamber of Commerce, the Bogotá Mayor's Office, UNICEF, UNDP, and a number of foundations. National and international academic experts, non-governmental organizations, donors, and private sector organizations convened to discuss successful experiences in corporate social responsibility with the ultimate objective of creating a "Pact for a Responsible Colombia," affirming a commitment to sustainable and equitable social and economic development. USAID's projects were featured in the "International Cooperation" section of the Fair, through video presentations, brochures, and other visual aids. More than 35,000 persons visited the Fair.
Launching of Human Rights and Preventive Security Communications Campaigns is just another example of how social responsibility is being demonstrated in Colombia. On August 17, 2007 Chargé d’ Affaires Brian A. Nichols, Colombian Vice-President Francisco Santos, Minister of Interior and Justice Carlos Holguín, and director of the National Police, Brigadier General Oscar Naranjo, participated in the launching of two communications outreach campaigns targeting political candidates in the upcoming October elections. The first campaign will focus on preventive security to raise candidates' awareness on how to reduce risks to their personal security. The second campaign will focus on raising awareness within society as a whole to advocate and demand greater attention to human rights issues in candidates' agendas. This activity is another important example of USAID/Colombia’s Human Rights program. National media coverage of this event further expanded the global commitment of the U.S. and Colombian governments to foster corporate social responsibility in Colombia.
Together, the USDOC, AACCLA, USAID and Colombian governmental officials are effectively changing the face of American business interests in Colombia.
When President Alvaro Uribe came to power in 2002, he was the first presidential candidate ever to win a first-round political victory in Colombia. President Uribe was re-elected in another first-round victory in May 2006, after a historic ruling in Colombia’s Constitutional Court to allow second presidential terms. With 62 percent of the vote and his nearest competitors in the 20-25 percent range, President Uribe reconfirmed the widespread popularity of his pro-development, law-and-order agenda. Congressional elections were held on March 12, 2006, and the three leading pro-Uribe parties won clear majorities in both houses of Congress. Mired for decades in a complicated armed conflict with leftist rebels, para-military death squads and narcotics traffickers, the Colombian Government is making admirable strides to reduce crime and terrorism and boost the legitimate economy.
In January 2007, Colombian leaders presented a new strategy to consolidate and build on progress under Plan Colombia, called the "Strategy to Strengthen Democracy and Social Development." The new strategy continues successful Plan Colombia programs while putting greater emphasis on consolidation of state presence, including access to social services, and on development through sustainable growth and trade.
Demobilization of Former Paramilitaries and Weakening of Illegal Narco-terrorists
As a commitment to his campaign promise, President Uribe is restoring security to the country by demobilizing more 32,000 former paramilitaries and ceasing the functions of the United Self Defense Forces of Colombia (AUC) as a formal organization. Still, some renegades continue to engage in criminal activities. However the Colombian government has stepped up efforts to reassert government control throughout the country, and now has a presence in every one of its municipalities. Uribe released a national security strategy that employed political, economic and military means to weaken all illegal narco-terrorist groups.
Uribe seeks increased private investment in commercial infrastructure to improve the industrial sector’s productivity. Uribe also intends to decentralize and diversify production to increase overall competitiveness. Modernization efforts are coupled by a plan to gradually reduce external and internal debt through market mechanisms, and to reduce inflation.
U.S. President and US Government Representatives Visits
Photo by U.S. Embassy Bogotá
On March 11, 2007, President George Bush Jr. briefly called on President Uribe to offer his renewed support for the people of Colombia. Bush indicated that he would ask the U.S. congress for support to maintain the current level of aid to Colombia.
Deputy Secretary of State John D. Negroponte traveled to Colombia during May 2007, to discuss pending trade agreements, energy issues, and regional cooperation. Following on President Bush’s March 2007 visit to the region, Deputy Secretary Negroponte highlighted the President’s commitment to advance the cause of social justice in the Western Hemisphere by building governments that are fair, effective, and to meet the basic needs of their citizens. Deputy Secretary Negroponte also discussed issues such as education, healthcare, housing, and how the United States can assist in creating greater economic opportunities in the hemisphere. The Deputy Secretary met with local business executives, civil society, and human rights groups, in addition to senior officials in the host governments. He visited micro enterprises and schools supported by United States Government programs.
Under Secretary of State for Economic, Energy and Agriculture Affairs Reuben Jeffery III, traveled to Colombia during August 20-24, 2007. He consulted leaders in the Colombian government, the private sector, and civil society. His meetings focus on boosting economic ties in the region, building support for the pending free trade agreements, and deepening the U.S. partnerships on energy, security, including opportunities for biofuels partnership with Colombia like that with Brazil.
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In his meeting with the Colombian private and public sectors he indicated that “the CTPA will support the modernization and liberalization that Colombians have sought and earned. It also helps the country embark on a process that can mean sustainable and broad-based economic growth for future generations. The FTA, the Free Trade Agreement, however, is about more than just trade. It symbolizes a strategic partnership between two societies that believe in democracy and are committed to democratic values, to the well-being of their peoples and to the power of open and competitive economic markets.”
Exporting U.S. Education to Colombia
Educational services comprise a new and exciting export sector for American businesses. Despite growing competition from the United Kingdom, Spain, the Netherlands, Canada and Chile, the U.S. remains the leading destination for Colombians studying abroad. Attracted by the quality of education, the opportunity to improve English skills, the abundance of specialized programs and improved employment prospects with U.S. or multinational corporations, Colombians are pursuing degrees in the U.S. in ever greater numbers. According to the Institute of International Education, Colombia ranks 13th in the world on the list of top countries generating students to the United States and second among South American countries after Brazil. Over 7,400 Colombian students accessed U. S. educational institutions (undergraduate, graduate, training, and English as a Second Language programs) during academic year 2005-2006
Exporting U.S. Travel and Tourism to Colombia
According to the Colombian Civil Aeronautics Authorities, about 2.2 million travelers from Colombia went abroad in 2006. Colombia is the United States' fourth-largest export market in Latin America--behind Brazil, Venezuela, and Argentina--and the 26th-largest market for U.S. products worldwide. An estimated 654,200 Colombians, 10 percent more than in 2005, traveled to the United States during 2006. These Colombian visitors spent an estimated US $1.65 million in the U.S. (excluding airfares) on food, car rental, hotel, attractions, and basic shopping. The usual length of stay is seven nights, but if they have relatives in the U.S., the common stay is from three to four weeks. Colombians have 15 working days of statutory paid vacation per year. Leisure travel usually takes place during school vacations (November to early February); during Holy Week (the week before Easter); and from June to early September.
Best Prospects for U.S. Exporters
The U.S. currently serves as Colombia’s premier commercial and agricultural partner. The abundance of high quality, competitively priced products affords U.S. exporters a distinct advantage over the country’s other major trading partners, including its South American neighbors. This advantage will be compounded by the US-CTPA as U.S. commercial interests gain greater market access and the overall investment climate improves.
>>Read more about Colombia’s Best Prospects
The following tips are useful for prospective exporters:
| Secure an agent, representative, or distributor in Colombia, which requires a contract that meets the provisions of the Colombian Commercial Code. |
| Focus on formality, personal relationships and trust when negotiating agreements and contracts. |
| Communicate with the U.S. Commercial Service of the U.S. Embassy in Bogotá for specific concerns. |
| Keep good after-sales service arrangements, not only in the original buying decision, but also in maintaining the sales relationship. Warranties on imports are important factors that support after sales service in Colombia. |
| Products and/or service quality, financing, and price supported by extensive advertising campaigns play an important role in Colombians’ buying decision. |
| Knowledge of Spanish is essential. |
| Practice good security awareness |
Further information about doing business in Colombia can be obtained here.
Industry/Market Research Reports are structured market overviews and updates produced by the Commercial Service in Bogotá, Colombia. These reports offer succinct industry-specific information that can help determine market potential, market size and competitors for U.S. products and services.
Market Research Briefs produced by the U.S. Commercial Service in Bogotá are currently available on the following sectors:
| Air Cargo Services |
| Banking Services |
| Electric Power Generating Equipment |
| Food processing and Packaging Equipment |
| Information Security |
| International Student Recruitment |
| Motorcycle Parts and Accessories |
| Mining Industry Equipment |
| Natural Gas Production and Transportation, and Machinery Equipment |
| Oil and Gas Field Machinery |
| Plastics Materials and Resins |
| Pollution Control Equipment |
| Pulp, Paper and Paperboard |
| Pumps, Valves and Compressors |
| Safety and Security Equipment |
| Software |
| Sugar Production and Processing Equipment |
| Telecommunications convergence |
| Travel and Tourism Services |
Industry/Market Research Reports are available through the U.S. Government's Export Portal: http://www.export.gov/mrktresearch. Otherwise, prospective exporters may send requests to our Bogotá office via e-mail: bogota.office.box@mail.doc.gov
Throughout the year the U.S. Commercial Service in Colombia promotes U.S. export firms and their products by staging catalog exhibitions and coordinating one-on-one matching with potential buyers at the most important industry tradeshows.
Click here for more information about upcoming trade shows.
U.S. exporters seeking general export information/assistance or country-specific commercial information should consult with their nearest Export Assistance Center or the U.S. Department of Commerce's Trade Information Center at (800) USA-TRADE, or go to the following website: http://www.export.gov/.
| That meet the Agreement’s rules of origin are now traded duty-free and quota-free, promoting opportunities for U.S. and regional fiber, yarn, fabric, and apparel manufacturing. |
| Substantial market access is provided across the entire services regime (e.g. telecom, engineering, transportation, financial services). |
| Higher standards are agreed upon for protecting intellectual property rights (IPR) such as copyrights, patents, and trademarks, and the accord enhances means for enforcing those rights. |
| CAFTA-DR requires the use of fair and transparent government procurement procedures, including advance notice of purchases and timely and effective bid review procedures. |
The agreement also:
| Establishes a more secure and predictable legal framework for U.S. investors in the region. |
| Requires transparency and efficiency in administering customs procedures, facilitating entry of goods into these countries. |
| Loosens restrictive “dealer protection” regimes that have locked U.S. firms into exclusive or inefficient distributor arrangements |
| Provides strong anti-corruption provisions against bribery in matters related to trade and investment. |
| Protects labor and the environment, requires effective enforcement of laws and establishes cooperative programs to build local enforcement capacity. |
| Creates strong dispute settlement procedures. Emphasis is on promoting compliance through consultation, but enforcement mechanisms include monetary penalties to enforce obligations of the Agreement. |