Colombia's participation in international trade has been a dynamic process that has faced various challenges and achieved milestones over the past years. From its strategic geographical position to the implemented trade policies, the country has undergone a significant evolution in its role on the global stage. Among the achievements the country has had, the following stand out:
Trade Growth: In 2022, Colombia generated exports valued at USD 57,088.24 million and imports of USD 78,685.05 million, resulting in a trade deficit of USD 21,596.81 million. Export showed an increase of 41.88%, rising from USD 40,238.17 million in 2021 to USD 57,088.24 million in 2022. Imports to Colombia during 2022 amounted to USD 78,685.05 million, representing a growth of 22.64% compared to 2021, when Colombian imports were equivalent to USD 64,160.31 million.
Movement | Country | USD | Increase % |
Exports to | USA | 14.705,62 m | 35,13% |
Exports to | Panamá | 5.834,34 m | 136,89% |
Exports to | Países Bajos | 2.697,79 m | 174,98% |
Exports to | India | 2.465,54 m | 96,42% |
Exports to | Brasil | 2.332,41 m | 13,83% |
Imports from | USA | 14.071,26 m | 33,88% |
Imports from | China | 18.698,74 m | 26,38% |
Imports from a | Brasil | 5.495,15 m | 56,90% |
Imports from | México | 4.174,75 m | 9,85% |
Foreign Investment Attraction: Colombia has attracted a steady flow of Foreign Direct Investment (FDI) in recent years, particularly in the energy, infrastructure, and services sectors. In 2023, FDI reached USD 14.5 billion, marking a 10% increase compared to the previous year. FDI has contributed to job creation, economic growth, and the country's development.
Market Opening: Currently, Colombia has active free trade agreements with the United States, the European Union, Mexico, the Northern Triangle of Central America (El Salvador, Guatemala, and Honduras), the Caribbean Community (CARICOM), the Andean Community (CAN), the Southern Common Market (MERCOSUR), Chile, Canada, EFTA (Switzerland and Liechtenstein), and Venezuela. Negotiations have been concluded with Panama, Costa Rica, and Israel.
Enhanced Competitiveness: The country's competitiveness has improved in recent years, according to the Global Competitiveness Index of the World Economic Forum. Trade openness has bolstered the competitiveness of Colombian companies, compelling them to enhance their productivity and quality. As a result, they have managed to establish a foothold in international markets thanks to their quality, innovation, and pricing.
Job Creation: International trade has generated employment in Colombia, particularly in the export and foreign investment sectors. It is estimated that the export sector alone creates around 2 million direct and indirect jobs.
Regional Integration Strengthening: Colombia participates in various mechanisms to strengthen regional integration, including the Pacific Alliance, the Community of Latin American and Caribbean States (CELAC), the Mesoamerica Project, the Ibero-American Conference, and the Association of Caribbean States (ACS). With its strategic location and access to the Atlantic and Pacific oceans, Colombia has optimized its ports and transportation networks to facilitate the movement of goods.
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Colombia has faced numerous obstacles in its pursuit of economic development. These challenges include both economic and political issues, as well as environmental concerns. Among the main challenges the country has had to overcome are:
Protectionism: Economists Fernando Jaramillo, Juan José Echavarría (current General Manager of the Banco de la República), and Iader Giraldo point out that several elements are required to consolidate foreign trade operations that take into account productivity, encourage diversity, and benefit consumers: maintaining uniform tariffs, reducing non-tariff barriers, streamlining import times, eliminating unnecessary regulations, promoting exports through a serious science and technology policy, and implementing public policies that facilitate transportation, trade, infrastructure, education, and anything that encourages productivity.
Sustainability: With the aim of promoting the country's economy transition towards a decarbonized, inclusive, sustainable, and knowledge-based one that encourages the internationalization of the productive apparatus and territories, President Gustavo Petro's government presented on June 22, 2023, to production guilds and media the Foreign Trade Policy 'For Internationalization and Sustainable Productive Development'. The Foreign Trade Policy focuses on five key areas:
Attracting foreign investment for sustainable development and energy transition.
Internationalization of territories and a productive, export-oriented culture.
The Global South: Integration with Latin America and the Caribbean, Asia, and Africa.
Active and proactive multilateralism.
Fair and balanced internationalization.
Climate Change: IDEAM warns that climate change will affect rainfall patterns in Colombia, impacting logistics and supply chains. Droughts and floods could disrupt transportation, increase costs, damage infrastructure, and cause delays. Companies should diversify suppliers, use sustainable transportation, be energy-efficient, and have contingency plans to mitigate these risks.
Panama Canal: On November 22, 2023, Colombian President Gustavo Petro proposed developing a railway network to "complement" the Panama Canal. This is not the first time the president has discussed a transnational railway network. In October, during his visit to China, he presented a project to a Chinese company to develop a railway network linking ports in Colombia on the Pacific and Caribbean to complement the Panama Canal as a route for international trade. Playa Tarena on the Atlantic and the Gulf of Tribuga on the Pacific could be a viable alternative. Its geographical position, deep waters capable of accommodating mega-ships, and connection via a standard gauge train would allow Colombia to be a real alternative to the Panama Canal.
Railway Infrastructure: In the 550 km stretch between La Dorada and Chiriguaná, the operation of at least one train weighing over 800 tons per week was consolidated, transporting goods such as steel, cement, aggregates, coffee, and paper raw materials, among others. In the 257 km between Bogotá and Belencito, over 50,000 tons were transported, exceeding the 2019 figure by 7,000 tons. Unfortunately, these advancements in land transportation have been overshadowed by the poor construction quality of its roads.
Port Infrastructure: Close to 90% of Colombia's foreign trade is conducted by maritime mode, utilizing port facilities that are currently under development. The construction of Puerto Antioquia, a new multipurpose port located in the Gulf of Urabá, is currently 50% complete and is expected to be finished by 2025. Puerto Antioquia will have an initial capacity of 7.5 million tons of cargo per year and will generate over 10,000 jobs. The expansion of the Port of Barranquilla, the most important port in Colombia. This project includes the construction of new docks, cranes, and other infrastructure. The expansion of the Port of Barranquilla will increase its cargo capacity by 2 million tons per year. The modernization of the Port of Cartagena, the second most important port in Colombia. This project includes the renovation of port facilities and equipment. The modernization of the Port of Cartagena will improve its efficiency and competitiveness.
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Colombia has undergone a dynamic process of participation in international trade, facing various challenges and achieving significant milestones in recent years. With notable growth in trade, including a 41.88% increase in exports in 2022, the country has demonstrated its capacity to compete in the global market.
Additionally, the attraction of foreign investment, market openness, and the strengthening of competitiveness have contributed to economic development and job creation. However, challenges such as protectionism, environmental sustainability, and inadequate infrastructure persist. It is imperative for Colombia to adopt measures to address these challenges, promoting policies that encourage export diversification, adaptation to climate change, and infrastructure improvement.
