Doing Business in Colombia September2012
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Transcript of Doing Business in Colombia September2012
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U.S. Department of CommerceInternational Trade Administration
Doing Business in Colombia
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U.S. Department of CommerceInternational Trade Administration
Colombia at a Glance
3rd largest populat ion inLat in Am eri ca (48 mil l i on)
Locat ion- 2 coast s
Li t e racy Rat e: 94%
5 ci t i es w i t h 1 m i l l ion+consum er bases
Fast est growing market inLat in Am eri ca for oi l andgas product ion
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U.S. Department of CommerceInternational Trade Administration
Democrat ic Republ i c
President appr oval 64-54% (as of Sept 2012)
Dow n f rom 78% in Febr uary 2012
Next President ial Elect ions: May 2014
Headlines
Government
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Colom bia at a Glance:
Demographics Midd le class is a grow t h indicat or f or buying
power and opport uni t y for innovat ion.
Percent age of peopl e in 20-40 age group:20-29 17%
20-34 24%
20-39 31% The m iddl e cl ass repr esent s 35. 3% of t he
t ot al Colombian populat ion
U.S. Department of CommerceInternational Trade Administration
http://www.grspro.com/pics/computer.jpg -
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U.S. Department of CommerceInternational Trade Administration
Colombia at a Glance:Technology Trends
20 % of hom es have int ernet access.
There are 21 comput ers f or every 100
ind ivi duals. It is incr ease of 50% since t hecurrent government st art ed.
77% of Publ ic school s have i nt ernet access.
This year t he governm ent pur chased 321, 000comput ers f or publ ic schools.
http://www.google.com/imgres?imgurl=http://www.mercer.lib.oh.us/Computer%20class.jpg&imgrefurl=http://www.mercer.lib.oh.us/computer.htm&usg=__s2c5hNGwuKcPVYpwQ5O-YcM2uIE=&h=1050&w=1050&sz=116&hl=en&start=3&zoom=1&tbnid=xQeFaKVdKfHNwM:&tbnh=150&tbnw=150&ei=OU_OT6yyKumN6QHk_aGSDA&prev=/search?q=computer&hl=en&gbv=2&tbm=isch&itbs=1http://www.google.com/imgres?imgurl=http://www.mercer.lib.oh.us/Computer%20class.jpg&imgrefurl=http://www.mercer.lib.oh.us/computer.htm&usg=__s2c5hNGwuKcPVYpwQ5O-YcM2uIE=&h=1050&w=1050&sz=116&hl=en&start=3&zoom=1&tbnid=xQeFaKVdKfHNwM:&tbnh=150&tbnw=150&ei=OU_OT6yyKumN6QHk_aGSDA&prev=/search?q=computer&hl=en&gbv=2&tbm=isch&itbs=1http://www.grspro.com/pics/computer.jpg -
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U.S. Department of CommerceInternational Trade Administration
Colombia at a Glance:Technology Trends
Colom bia has t he low est cost comput ers in Lat inAm erica ( Int el )Colom bia is t he 2dn grow ing comput er m arket in LA.(32% f rom m arch 2011 t o march 2012)556,311 comput er unit s sold in t he last quart er of 2011.
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U.S. Department of CommerceInternational Trade Administration
Next Tier Market under President Obama sNat ional Export In i t ia t ive
GDP grow t h of 5. 9% in 20117.7% in 3rd quart er of 2011
Em phasis on Maj or p roj ect s
$26B next four years
Direct invest m ent : $13B
Why Colombia?
An Economic Miracle
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U.S. Department of CommerceInternational Trade Administration
Why Colombia?An Economic Miracle
Logist i cs p lat fo rm
Wel l managed f ore ign deb t Frequent t ravel t o U.S.
U.S. p roduct s p refe r red
Grow ing populat i on
Photo: New El Dorado Airport
http://images.google.com/imgres?imgurl=http://img529.imageshack.us/img529/8215/aeropuertoeldorado003s1bg.jpg&imgrefurl=http://www.skyscrapercity.com/showthread.php?t=567636&h=545&w=967&sz=202&hl=en&start=4&um=1&tbnid=Jlrqo8Xw1AHcCM:&tbnh=83&tbnw=148&prev=/images?q=como+quedara+++nuevo+aeropuerto+El+Dorado&um=1&hl=en&sa=G -
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U.S. Department of CommerceInternational Trade Administration
Market Trends:Maj or Proj ects
TransMi len io Bogot
Two Re f inery Modern izat ionpro jec ts
Port s Cart agena, Salgar,Buenaventura
In f r ast ruct ure Roads, ElDorado Airport
Tour i sm inf rast ruct ure: (e.g,24 new hot el s (4000 room s) by2014). Marri ot t in Cal i end of2013, 6 new hot el s in BAQ,Tryp and Wyndham in BOG.
http://www.abel-art.com/medellin/pages/medellin28.html -
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U.S. Department of CommerceInternational Trade Administration
Market Trends:Maj or Proj ects
Government announcedUSD$ 33 bil l ion f orinf rast ruct ure works f or2013.Governm ent w il l i nvest USD$400 mi l l ion t o t urn t heMagdalena River in t o a Wat er - Highway . Annual f rei ghtt ransport at ion on t he r i ver,w i l l i ncrease fr om 2 m i l l iont ons t o 8 mi l l ion t ons.
Infr ast ruct ure goals against GDP
Wh C l bi ?
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U.S. Department of CommerceInternational Trade Administration
Why Colombia?GDP Growth
1991-2012
Source: DANE/IMF
*GDP per capita (nominal value)
-6,0
-4,0
-2,0
0,0
2,0
4,0
6,0
8,0
1991 1993 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1.9%
5.8% 5.6%
2.0%
3.7%
0.9%
-4.2%
3.0%
1.7%
3.9%
5.3%4.7%
6.7% 6.9%
2.7%
0.8% 0.8%
4.2%
5.6%5.0%
Asia Crisis
Internal Political and Economical Cirsis
ATPDEA Begins World Financial Crisis
Wh C l bi ?
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U.S. Department of CommerceInternational Trade Administration
Why Colombia?GDP Per Capita Growth
2009-2016
Source: DANE/IMF
*GDP per capita (nominal value)
$5.206,6
$6.359,6$6.980,4
$7.294,3$7.707,9
$8.025,1$8.394,5
$8.816,8
$0,0
$1.000,0
$2.000,0
$3.000,0
$4.000,0
$5.000,0
$6.000,0
$7.000,0
$8.000,0
$9.000,0
$10.000,0
2009 2010 2011 2012 2013 2014 2015 2016
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U.S. Department of CommerceInternational Trade Administration
Challenges
Social Economic
Obt ai n a peacef ulsolut ion t o t he int ernal
conf l ic t Def eat cor r upt i on i n
off ic ial agencies
Hi gh di sp lacem ent
ra te Reduce pover t y
Lar ge inf or maleconomy
Bureaucracy and redtape
Sluggi sh j ud iciary
Tax evasi on
SMEs lack access t ocredi t
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U.S. Department of CommerceInternational Trade Administration
Presidents Obama and Santos announcingthe US Colombia FTA April 2012
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Market Trends:
U.S.-Colombia FTA Wi l l he lp NEI but is NOT a cure-al l It can: - Increase expor t s t o Colombia by $1.1 b i l l ion
- Creat e/ save j obs
- - Increase market access f or goods andColom bia s $166 bil l i on servi ces m arket
- - Non-t ar i f f barr iers t o t rade w i l l be
progressivel y el im inat ed as FTA ent ersin to f orce
- Impr ove business cl i m at e by reducingcorrupt ion and inf ormal i t y
U.S. Department of CommerceInternational Trade Administration
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U.S. Department of CommerceInternational Trade Administration
Market Trends:Colombia s FTA Negot iat ions
Agreements implemented:
Andean Communi ty (CAN) (Ecuador, Peru, Bolivia)
Mercosur (Argentina, Brazil, Paraguay, Uruguay)
Mexico
Chile
Canada USA
Ratified:
Cent ral America Triangle (Honduras, El Salvador
and Guatemala) European Free Trade Association EFTA (Switzerland,
Norway, Iceland and Liechtenstein)
Pending implementat ion:
European Union
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Market Trends:
U.S.-Colombia FTA 90% of Colombian product s ent ered t he U.S. market
duty-free, whi le U.S. merchandise entering Colombiaf ace t ari f f s averaging near ly 9%. (APTDEA)
FTA w i l l e l iminat e t ar i f f s f or over 80% of U. S. expor t s o fconsumer and indust r i al product s (excluding pet rol eum)im m ediat ely upon im plem ent at ion and 87% w it hin 5 yrs.
The impac t of e l im inat ing t ar i f f s and re lat ed bar r ie rs in
Colom bia is est im at ed t o incr ease U.S. GDP by near ly$2. 5 b i l l ion.
U.S. Department of CommerceInternational Trade Administration
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Market Trends:
U.S.-Colombia FTA73% of the industrial products that originate from
U.S., will enter into COLOMBIA duty free.
U.S. Department of CommerceInternational Trade Administration
Category # of Products %
F Already duty free 160 3%
A Immediate 4,322 73%
B y U In 5 years 400 7%
C In 10 years 970 16%
K In 7 years 52 1%
T In 11 years 1 0%
Total 5,905 100%
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U.S. Department of CommerceInternational Trade Administration
TOTAL EXPORTS
US - COLOMBIA
$14,314,594,567
$215.040.712
Plastics exports vs Total Exports fromEEUU to Colombia (USD), 2011
Total Exports to Colombia (USD)
Plastic & Rubber Produc ts (USD)
2%
Source: Foreign Trade Division, U.S. Census Bureau
In 2011, the US exports of plastics and rubber products to Colombia was about 2% of the
total exports.
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U.S. Department of CommerceInternational Trade Administration
US COLOMBIA
TRADE STATISTICS
PLASTICS AND RUBBER PRODUCTS
2010 2011
Imports from
Colombia(USD) $ 106,003,152 $ 113,943,431
Exports to
Colombia
(USD) $ 178,737,355 $ 215,040,712
$0
$50.000.000
$100.000.000
$150.000.000
$200.000.000
$250.000.000
2010 2011
Trade Plastics & Rubber Products - USD
Imports from Colombia (USD) Export to Colombia (USD)
Source: Foreign Trade Division, U.S. Census Bureau
The US exports to Colombia increased 20% between 2010 2011
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Market Trends:U. S. Colom bia FTA
Previously U.S. auto par t s face a 17.4% t ar i f f , bu i ld ing product sf ace a 13.2% t ari f f and consum ers goods f ace a 15% t ari f f .
Non- ta r i f f bar r ie rs t o t rade are progressively e l im inat ed as FTA
ent ers int o force. 99% of qual i f y ing indust r ial and t ext i le goods w i l l become dut y
f ree.
Most remain ing t ar i f f s w i l l be phased out 15 years.
89% of Agr icul t u ral goods w i l l become dut y f ree.
U.S. Department of CommerceInternational Trade Administration
HTS Base Rate Staging Category
85129090 (Part s of w indshieldwipers of a k ind used f or mot or
vehicles or cycles)
2.5% A
39252000 (Doors, wind ows, andtheir f rames)
5.3% A
70133110 (Glassware for table orkit chen purp oses)
15% A
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Market Trends:
U.S.-Colombia FTA 76% of sales f rom US t o Colom bia consist s of :
Machines and m echanical equipm ent
Or ganic Chem ical s Transpor t Equipm ent
Minerals & Fuels
Plast ics and m achinery
Elect r ical m achinery Agro indust r ial
U.S. Department of CommerceInternational Trade Administration
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Market Trends:
U.S.-Colombia FTA Liberal izat ion of product s in key sect ors such as:
Const ruct ion Equipm ent / Bui l ding Product s
Ai r craf t s and par t s Fer t i l i zers
Agrochem icals
IT
Medical and scient i f i c equipm ent Ref urbished Aut o, m achinery, m edical
equipment
U.S. Department of CommerceInternational Trade Administration
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Market Trends:
U.S.-Colombia FTAImports to Colombia from USA
15 May to Aug 11 2012 (In USD Millions)
U.S. Department of CommerceInternational Trade Administration
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Market Trends:
U.S.-Colombia FTA
U.S. Department of CommerceInternational Trade Administration
Some pr oduct s w it h highl i ght ed incr ease (%)f rom May2012 t o Aug 2012 against t he same per iod in 2011
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U.S. Department of CommerceInternational Trade Administration
Market Pract ices
Tips for Success in Colombia
Be inform ed Read CCG
Use si t uat ional aw areness f or secur i t y
Colomb ia: Check t he Cl int on List / OFACwebsi te
Ident i fy par t ners/ background check
Include arb i t rat ion c lause in cont ract s
Be f ami l iar w i t h t he laws and regu lat ions
Always get legal advice
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U.S. Department of CommerceInternational Trade Administration
Market Pract ices
Tips for Success in Colombia
Language & t ranslat e mat er ials
Don t push for b ig orders ease int o i t
St ay wel l in f orm ed t h ings change very quicklyin Colombia Info is cr it ical
Be aw are t hat Colombia has i t s ow n cu l t u ralnuances
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U.S. Department of CommerceInternational Trade Administration
Market Pract ices
Tips for Success in Colombia
USDOC FTA tool: An easy to use tool to find outwhat tariffs are:
http://export.gov/fta/ftatarifftool/
http://export.gov/fta/ftatarifftool/
http://export.gov/fta/ftatarifftool/http://export.gov/fta/ftatarifftool/ -
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