Actividad de aprendizaje 11

Evidencia 3: Ensayo “Free Trade Agreement (FTA): advantages and

disadvantages”

PRESENTADO POR ALVARO

RAMIREZ URUETA

INSTRUCTOR:

MONICA GUTIERREZ

TECNOLOGO EN NEGOCIACION INTERNACIONAL SERVICIO

NACIONAL DE APRENDIZAJE

FICHA: 1565310

SENA
2019
The Colombia - US TLC is constituted by norms and procedures derived from them, which are
applicable in equal conditions for the two countries. The TLC is not a Law, nor is it conformed by
them; However, according to the Political Constitution of our country, international agreements have
all the rigor and have to be complied with like any other current legislation.

The TLC is a kind of guide on how to export - import among the signatory countries, with general
recommendations and criteria that determine the framework under which each country can act to
obtain the greatest benefits. In this sense, on the one hand, it is necessary for the two countries to
issue legislation on specific issues that take advantage of bilateral conditions; on the other, each
country is free to dictate its national economic policies and take the measures it deems pertinent to
boost international trade and especially to protect and promote the export of its products

TLC went into effect on May 15, 2012, signed between Juan Manuel Santos and Barack Obama at
the Summit of the Americas without possessing a due date but with the possibility of seeking
reforms or termination by each of the parties. This agreement is organized in a document of 23
chapters dedicated to different topics
 FTA Organization Colombia - United States

Preamble
Chapter 1 Initial Provisions and Initial Definitions
Chapter 2 National Treatment and Access of Goods to the Market
Chapter 3 Textiles and Clothing
Chapter 4 Rules of Origin and Origin Procedures
Chapter 5 Customs Procedure and Trade Facilitation
Chapter 6 Sanitary and Phytosanitary Measures
Chapter 7 Technical Barriers to Trade
Chapter 8 Commercial Defense
Chapter 9 Public Contracting
Chapter 10 Investment
Chapter 11 Cross-border Trade in Services
Chapter 12 Financial Services
Chapter 13 Competition Policy
Chapter 14 Telecommunications
Chapter 15 Electronic Commerce
Chapter 16 Intellectual Property Rights
Chapter 17 Labor Issues
Chapter 18 Environment
Chapter 19 Transparency
Chapter 20 Administration of the Agreement and Strengthening of Commercial Capacities
Chapter 21 Dispute Resolution
Chapter 22 General Exceptions
Chapter 23 Final Provisions

These international trade agreements bring to Colombia, the advantage that their employers can
sell their products and services abroad under better conditions, without paying taxes (tariffs) without
being subject to other barriers, which do have to pay in case of not having these treaties. 1

This helps the national economy of a country to grow as it has a much wider consumer market than
when it is limited to its entrepreneurs to sell in the domestic market.

Therefore, free trade is considered positive, because the lack of trade barriers makes exporting
easy and relatively cheap. In this way, a country can focus its resources more efficiently and
achieve a higher real income. Despite the global benefits of free trade for a country's economy,
there may be some important drawbacks to the establishment of free trade agreements.
Colombia is not a threat to the US in political and economic matters, since the total production of
the country is only ¼ of their production. Colombia we are small in the impact that it can generate in
the North American production therefore the economists consider that the TLC will be generous.

Colombia is still at a disadvantage because the US is in a greater capacity to generate competition

and production in sectors where Colombia is more dynamic. In turn, Colombia has sectors in which
it can compete in fruits, vegetables, footwear, textiles, etc. Without ignoring the great disadvantage
of the gap between a developed country such as the US and a developing country like Colombia

In general, the main disadvantages of the TLC are:

• They are not equitable as multilaterial agreements

• Emerging economies lose

• Complicated competition to sustain for national industries

• Imbalance of the internal economy and lack of protection of productive sectors little benefited with
the negotiation of the Treaty.

• Mismatch in terms of tax revenues, since by eliminating tariffs entry of foreign products would be
leaving to receive tax concept, which could deepen the national fiscal deficit; However, analysts
expect this money to be recovered as a result of IVA and Income Tax derived from the greater
movement of the economy.

• Little capacity of adaptation of the national companies in front of the international production
standards, generating monopolies and capture of the market by the North American offer that
enters the country2

BOBLIOGRAFIA

https://www.siliconweek.com/cloud/tlc-en-colombia-un-analisis-a-las-ventajas-y-desventajas-de-nuevos-
tratados-de-libre-comercio-60361