The Work Begins

Last night at about nine o’clock, a cargo flight took off from Eldorado airport in Bogota bound for Miami. It was carrying 4,250 flower boxes, weighing about 80 tons, which were received by the U.S. Customs today at dawn. The package would probably not have had much importance, except for the fact that it is the first to enter the North American country under the new FTA with Colombia, which begins to take effect as of today.

Thus, with roses, carnations and crape myrtles, begins a new phase with the world’s largest economy. The U.S. is the main destination of our exports and the first source of the imports that we buy. Gone are the long years of waiting, eight of them since May 18, 2004 when the first negotiations were held in Cartagena, after which there was a complex ratification process that, at times, seemed to be endless.

However, all that is behind us now. Therefore, it is not worth complaining about the appropriateness of the agreement or the details of an argument that, in turn, was subjected to public scrutiny. Now it is important to understand how big the challenge is and, if possible, to recover lost ground. In this sense, matters related to infrastructure should be solved and regulations also should operate effectively, especially as it pertains to the DIAN.*

Equally important is knowing how to identify the sectors that have the potential to supply U.S. consumers, as well as the comparative advantages of the different regions of the country that have the same purpose. In this regard, we must highlight the wise steps undertaken by Proexport when considering the supply of goods existing on this side and the huge demand, state by state, found on the other.

Folding our arms would be unforgivable. Although there are still major challenges when it comes to selling in a different language and in a market that is implacable when demanding quality and performance, Colombian businessmen have to travel a course that only a few have trod before. Successful cases in Mexico, Peru, Chile and Central America – having traveled the road of their respective FTA – show that it is possible to increase exports and create jobs with added value if you have persistence and long-term vision.

In the meantime, Colombia should get ready for greater competition, something that could be achieved with hard work and not with proclamations of catastrophe, a solution which tends to be preferred by some union leaders. Undoubtedly, this new situation touches particularly sensitive industries, such as agriculture, but the tariff reduction scenarios range from one to two decades, giving time to undertake the essential work of productive restructuring to increase the current efficiency.

It is also important to preserve a suitable investment climate. The superb geographical location of Colombia opens the door to the development of a significant number of industrial projects in the country, taking advantage of the preferential access to the United States. But to make these initiatives work, there must be clear rules and old disagreements should be left in the past.

It is most important to understand that the FTA is a tool that can be more or less useful depending on the use Colombians give to it.

Therefore, despite the time elapsed, we can say that the real work is just beginning.

* Translator’s note: The DIAN is Colombia’s National Tax and Customs Office.