Opportunities with our new Free Trade Agreement Colombia – USA
May 2012
0% Duty100% Business Opportunities1.000% Fulfilling Experiences
OUTLINE
Colombian Economic Outlook
What does the FTA between the United States and Colombia imply?
Colombia a country for buying, investing and traveling
About us…
• 5.9% growth ratein 2011
12% higher than theaverage growth rateof Latin America(3.6%)
• 2 million new jobs*
Unemploymentrate (11%)
• 1 million barrelsof oil and gas production
Fourth largestproducer in LatinAmerica
• Direct ForeignInvestment (U.S. $ 13.234mill)
• (4.0% of GDP)
Record figure in the history of Colombia
• Exports of goodsand services U.S. $ 60.000mill
• (18.5% of GDP)
Record figure in the history of Colombia
• Reduction of thefiscal deficit(2.2%*)
Reduction of thefiscal deficit(2.2%*)
2011 was a year of great economic achievements
GDP (PPP) US $ Billion - 2011466 443 423
387 378 367 348301 298 278 272 246 233
205 184133
COLOMBIA
MALAYSIA
BELGIUM
SWEDEN
SWITZERLA
NDVENEZU
ELAHONG K
ONGPERU
VIETNAM
CHILEPORTUGALSIN
GAPOREISRAELFIN
LAND
IRELA
ND
NEW ZEALA
ND
Note: PPP (Purchasing Power Parity)(February 7 2012)
In GDP terms, Colombia is the 28th largest economy in the world using the PPP method of evaluation
5.826 5.984 6.151 6.343 6.817 7.204 7.817 8.474 8.842 8.940 9.310 9.790
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 (e)
Colombia's GDP per capita (PPP)*, 2000 – 2011e (US $)
•GDP Per Capita adjusted to prices at purchasing power parity (PPP)Source: EIU (Economist Intelligence Unit)(February 7, 2012)
+60%
GDP per capita adjusted to PPP reaching US$10,000
GDP, Inflation and Unemployment rate (%) 2002 – 2011(Annual Average)
Source: DANE- Colombia Central Bank - EIU: Economist Intelligence Unit Forecaste: Estimated (February 2012)
Macroeconomic stability
GDP
Inflation
Unemployment rate
Variation 2010–2011: +92%*Figures obtained through the foreign currency balance of the Bank of the Republic. **Share of all countries with positive cumulative investment, without reinvested profits or investments in the oil sector. Accumulated value 2000 – 2011: US $38,615 millionNote: the list of the top countries investing in Colombia does not include Anguilla or Panama, in third and fourth place.Source: Bank of the Republic - Balance of Payments
Main Investors in Colombia 2000 – 2011**
United States • US $9,595 million• Share of 24.8%
England• US $5,684 million• Share of 14.7%
Spain• US $3,431 million • Share of 8.9%
Canada• US $1,373 million• Share of 3.6%
In 2011 Colombia reached the highest FDI inflowin history
Assembly of the first 500,000-volt electric transmission system in Peru. Investment: US $130 Million
Purchased 60% of Peruvian energy company Cálidda. Investment: US$ 111 Million
Acquisition of one hundred percent of the Central American BankInvestment: US$ 1.9 Billion
Purchased ING companies in Chile, Mexico, Peru, Uruguay and ColombiaInvestment: US$ 3.763 Billion
Source: Banrep
US $Million
1. USA2. England3. Panama4. Brazil 5. Peru6. Guatemala7. Mexico8. Chile 9. Ecuador 10. Venezuela
Ranking of countries receiving FDI from
Colombia (2000-2010)
Colombia is also increasing its outbound investment flows
Variation 2009 - 2010: -21.2%Variation 2010 - 2011: 43% Variation Jan – Mar 2010 vs. Jan – Mar 2011: 23.2%Source: DANE (National Department of Statistics)
Top Exports Destination, 2011
United States• US $21.720 million• Share of 38.1%
Netherlands• US $2.524 million• Share of 4.4%
China• US $1.989 million• Share of 3.5%
Chile• US $2.205 million• Share of 3.9%
In eight years, exports quadrupled
AGRIBUSINESS
INFRASTRUCTURE
INNOVATION
MINING
HOUSING
National Development Plan 2010 - 2014
|
INNOVATION
INFRASTRUCTURE
MINING
AGRIBUSINESS
Productive Transformation Program: A Public - Private Partnership to strengthen and build “world class sectors”
A country with various regions and opportunities for investment
Central / Andean Region
Amazon Region
Pacific Region
Caribbean Region
Orinoquía Region
Caribbean Region: tourism, logistics, petrochemical cluster, construction materials, and an export platform to the Caribbean/Atlantic
Central/Andean Region: service outsourcing, high value-added manufacturing, hub to cover the domestic market, and a specialized agriculture industry.
Pacific Region: manufacturing, agroindustry, logistics, biotechnology, and an export platform to the Pacific Rim.
Orinoquia Region: agriculture, forestry, biofuels, and hydrocarbons.
Amazon Region: conservation and ecotourism (Leticia).
“Colombia will do better than other countries of the region in case of a new global recession… The country has accumulated savings which
can stimulate the economy in case of an economic downturn.”Rodrigo Chavez – Director, Latin America and Caribbean
“Colombia has become an attractive destination for investment…Increased security promoted per capita GDP growth since 2002.”
“Colombia, one of the stars of Latin America…”IEE (Institute of Economic Studies) - Spain
The hemispheric gathering (“Sixth Summit of the Americas”
in the Caribbean city of Cartagena), marks a comeback
for Colombia, which is emerging from half a century of crippling
guerrilla, drug and political violence and is making a serious
bid to be Latin America’s new economic and diplomatic player.
THE COLOMBIAN COMEBACK: Colombia’s President Juan Manual
Santos interview with TIME.
“From nearly failed state to emerging global player, in less than a decade.”
Source: TIME Magazine, April 23, 2012
OUTLINE
Colombian Economic Outlook
What does the FTA between the United States and Colombia imply?
Colombia a country for buying, investing and traveling.
About us…
Main Features of the FTA
Issues addressed during the negotiation:
ATPDEA, preferences were consolidated and extended due to the Colombia-USFTA.
Colombian companies’ will have access to USgovernment bids. Provisions regardingthis subject aimed to ensure transparency andclear regulations.
-Market access (industry and agriculture)
-Intellectual property -Investment regime
-Government bids -Dispute resolution-Competition
-E- commerce -Services
-Environment-Labor
Both parts will offer national treatment toeither Colombian and/or US companies,regarding FDI (Foreign Direct Investment).
Both parts agreed to eliminate certain legal figures which didn’t facilitate suppliersto provide their services; Not forcing the local presence of suppliers and notdiscriminating on limitations with the number of suppliers, the value of assets ortransactions and the number of employees.
After the FTA implementation, Colombia will get free accessfor 97.5% of the agribusiness products, approximately1,100 Colombian products (77% fruits, 90% vegetables, 88%processed vegetables, and 100% flowers) will be duty free.
On the other hand, the United States will have free dutyaccess for 84.4% of its agro-industrial goods.
99.9% of Colombian industrial products will become duty free immediately upon the FTA implementation. More than 2,900 Colombian products (building materials 64%, house-ware(s) 64%, beauty and personal care 55% and auto parts 48%) will have the benefits
Main Features of the FTA
More than 1,600 products of the apparel-textile and ready to wear categories, 90% for leather manufacturing goods, 73% of footwear and 76% of leather categories, will enter the American market duty free.
OUTLINE
Colombian Economic Outlook
What does the FTA between the United States and Colombia imply?
Colombia a country for buying, investing and traveling.
About us…
A country where you can buycompetitive products, and get
access to other markets, while also living fulfilling
experiences.
A country where you can buy competitive products.
Agribusiness
Why buy from Colombia?
Year-round availability for a wide rangeof our agricultural products, due to thecountry's geographical location .
Some Colombian companies are certifiedby: Globalgap, Fairtrade, HACCP,Organic, Ecocerts, BCS OKO JAS andUTZ Certified, among others.
23
High availability of skilled and qualifiedhuman resources
Connectivity redundancy
Double-taxation agreements in place orapproval process and Value Added Tax(VAT) exemption on service exports
High degree of adaptation to newtechnologies, specialization, experienceand value-added products.
Presence of several multinationalcompanies
Colombia stands out for its research inscientific and health topics
Home to great medical advancements.
Why buy from Colombia?
Services
24
The corporate sector has made scientificand technological knowledge andcreativity available to the productivesector, thus offering a menu of exportgoods or services with more drive andcontent.
Colombian companies have internationalquality certifications backing theirproduction processes, such as: ISO 9001;registration under the National Institute forSurveillance of Medications and Food(INVIMA); best manufacturing practices(BPM); and it’s logistics processes withthe BASC certification.
Why buy from Colombia?
Manufacturing
25
Why buy from Colombia?
Consolidated industry with more than acentury of tradition, already recognizedaround the wold .
Ongoing development of new productswith innovation in finishes andprocesses following world trends.
Integration of players assuresconsistent quality and reliable deliverytimes.
Skilled manual labor has grantedColombian products internationalacknowledgement for their premiumqyuality.
Textiles and Apparel
One of the best environmental businesses, where you can also access other markets
Colombia: the top reformer of the region
Change in Doing Business Ranking, 2007-2012*(Variation in the number of positions)
Source: Doing Business 2012 World Bank Report*Positive numbers indicate improvements in business environment
Three of the top risk rating agencies granted Colombia the "Investment Grade”
May 31, 2011
The three agencies agreed on the country's positive economic and financial situation,highlighting:
Its ability to deal with external shocks Its historic fulfillment of obligations An increase in its macroeconomic credibility A visible improvement in security conditions
Brazil Colombia Chile Mexico Perú
Source: Investor perception research JP Morgan Chase Bank Co.
“Colombia is the second most attractive country for investment in Latin America for the next 3 years.”
Colombia’s human capital
Source: IMD World Competitiveness, 2011. Ranking of 59 countries.2/ Ranking, percentage change 3/ The flexibility of the labor market is measured by the rigidity of the employment index.
Brazil, 1
10.2%
3.9%
Colombia, 5
Peru,11
2.5%Chile, 16
1.8%
1.6%
Argentina, 19
1.3%
Venezuela, 25
0.2 %
Mexico, 37
Labor force growth, 2011 2/
World Ranking of 59 countries% Labor force growth
Labor Market Flexibility, 20113/
Rating scale from 0-100. 0: Flexible - 100: Rigid
Venezuela, 69
Brazil, 46
Mexico, 41
Peru, 39
Argentina, 21
Chile, 18
Colombia, 10
Availability of Skilled Labor, 2011 6/
Scale 0-10. 0: low availability – 10: high availability
Source: IMD World Competitiveness, 2011. Ranking of 59 countries. 6/ The labor market has skilled labor available.
7/ The credibility of managers in the society is strong.
Manager Credibility, 2011 7/
Scale 0-10. 0: weak– 10: strong
Colombia’s human capital
A Competitive legal framework of areas
15% Income Tax.
No taxes on imports and VAT.
It benefits from FTAs.
No restrictions on sales to the local
market.
Different types of Free Trade Zones
according to the needs of the investor.
Approximately 30 industrial park zones
(Multiuse) and 70 Free Trade Zones
around the country (Single Business).
About 4 million Mt2 available for
companies that want to locate in
permanent FTZ’s.
All Free Trade Zones in Colombia
Main Investment sectors from the U.S. to the world
Software & IT Services 17%
Textiles 3%
Business Services 14%
Financial Services 9%
Consumer Products 3%
Transportation 3%
Industrial Machinery, Equipment & Tools 4%
Communications 6%
Food & Tobacco 4%
34%
Chemicals 3%
Source: FDI Markets, period 2003-2011. Estimates: Proexport
Total Greenfield Projects: 39.513
Automotive
Regional Opportunities by Sector
Assembly project for the Latin Americanand Caribbean market’s.
Invested in the stamping process, welding,and finished painted product.
Opened a bus assembly plant in Colombia.
Opportunities in Assembly and Auto parts
35
Opportunities in Oil & Gas Services
A New plant with STAR technology,specialized in oil extraction.
Indian company established in Colombia toincrease extraction and production.
Establish a new TSX lab for analysis ofdifferent minerals.
Oil Products and Services
Regional Opportunities by Sector
36
Opportunities in Agribusiness
Development of 12,000 hectares of sugarcane for an ethanol plant with a capacity of376,000 liters per day.
Invested in the expansion of the facility inthe city of Cali.
Opened a new plant in Valle del Cauca.
Agribusiness
Regional Opportunities by Sector
37
Opportunities in BPO, Software & IT Services and Telecommunications
Global services center for BPO and IToperations.
Services center for financial andaccounting operations.
Data Center oriented to Systemintegration and support services.
IT and BPO&O
Regional Opportunities by Sector
38
Opportunities in Production, Research & Development Centers and Logistics
3 different plants and new globalinnovation center.
A plant production and Headquartersthat cover 9 countries in Central andSouth America.
Logistic Center to distribute all the ofthe Andean Community countries.
Cosmetics, Toiletries, and
Cleaning Products
Regional Opportunities by Sector
In Force
Norway
Iceland
Signed
Costa Rica
Panama
European Union
Israel
TurkeySouth Korea
In Negotiation Future All
Australia
Gulf Community
New Zeland
Japan
Dominican Republic
FTA´s
Source : Ministry of Commerce, Industry, and Tourism
Canada
Mexico Guatemala
El Salvador
Honduras
Brazil
Argentina
Uruguay
ParaguayChile
Peru
Ecuador
Bolivia
Switzerland
Liechtenstein
United States
Venezuela
Norway
Iceland
Costa Rica
Panama
European Union
Israel
TurkeySouth Korea
Australia
Gulf Community
New Zeland
Japan
Dominican Republic
Canada
Mexico Guatemala
El Salvador
Honduras
Brazil
Argentina
Uruguay
ParaguayChile
Peru
Ecuador
Bolivia
Switzerland
Liechtenstein
United States
Venezuela
Source: Estimates Proexport*** IATA tariffs (not airline tariff) in order for a high denomination scale
Maritime
Air
Colombia as an export platform from the United States to Brazil
Source: Estimates Proexport*** IATA tariffs (not airline tariff) in order for a high denomination scale
Doing business and living fulfilling experiences at the same time
Tourism Products
Nature Tourism
Sun and Beach
Cultural
Adventure
Nautical and Cruises
Health and Wellness
MICE Tourism
Average Growth Rate 2001-2011
10.3%
Average Growth Rate 2001-2011:
3.4%
Source: WTO, Migracion Colombia. Proexport calculations
World international tourist arrival vs. International Tourist Arrivals in Colombia 2000-2011
International tourist arrival growth rate in Colombiatriples vs. worldwide arrival rate
Arrivals in Colombia
World Arrivals
Arrival growth rate in Colombia 2010: 8,9% - World 2010: 6,7%
•Arrival growth rate in Colombia 2011: 7,3% - World 2011: 4,4%
At the end of 2004 Proexport starts the
promotion of international tourism in Colombia
Growing aerial international connectivity
Colombia currently has more than 700weekly international flights, connectingto 20 countries throughout the world.
•The number of international directflights to Colombia has increased over130% throughout the last decade.
•Colombia has one of the mostextensive domestic flight networks inLatin America, over 4,000 domesticweekly.
2008 -2009 2010 2011 2012 - 2014
Bogota – 76 rooms
Bogota - 239 rooms
Valledupar -108 rooms
Bogota – 251 rooms
Bogota – 264 rooms
B/quilla – 126 rooms
Bogota – 216 rooms
Medellin – 140 rooms.
Bogota- 191 roomsCartagena - 140 rooms
Bogota – 145 rooms
Bogota - 180 roomsBogota – 268 rooms
Bogotá – 126 roomsCartagena – 256 rooms
Bogotá - 56 rooms
Bogota - 95 Hab.
Bogota - 142 rooms
Cali - 150 roomsCartagena- 278 rooms
Medellín
Armenia - 140 rooms
Bogota - 251 Hab.
Bogota
B/quilla - 180 rooms
Medellin - 68 roomsBogota – 95 rooms
Armenia - 95 rooms
.
Cartagena - 250 roomsCartagena – 233 rooms
B/quilla - 118 roomsCartagena - 268 rooms
Opening year
A few hotel projects in Colombia by prestigious chains
0% Duty100% Business Opportunities1.000% Fulfilling Experiences
About us
Entity in charge of Promoting International Tourism, Foreign Direct Investment, and
Exports
EXPORTS INVESTMENT TOURISM
Strategic plans to work together with exporters1
6
Commercial Information and supply suitability (Zeiky, DEI, Cooperación)2
Trade Missions for Buyers3
5
Technical Missions and Trade Missions
7
Col
ombi
aE
xter
ior
Col
ombi
a an
d th
e E
xter
ior 4
Trade Agenda
8
9
10
Showrooms
International Trade Shows
Trade Missions for Exporters
Website for Exporters and Buyers
Portfolio of Export tools
Business matchmaking
Seminars for investors1
Seminars and international events
6
SIFAI2
Preparation of tailor made information
3
5
7
Col
ombi
aC
olom
bia
and
the
exte
rior
Coordination and development of agendas for investors
4
Portfolio of Investment tools
Work with journalists and influential opinion generators
Joint promotion at regional level
Ext
erio
r
Joint work plan - Export Plan1
Joint promotional plans with operators6
Institutional Projects2
Special Projects3
5
Workshops, destination presentations and International Trade Shows7
Col
ombi
aE
xter
ior
Col
ombi
a an
d th
e E
xter
ior
Specific Promotional Activities
Business matchmaking4
FAM Trips8
Tourism Portal9
Value Added Institutional Presence (activations) 10
Portfolio of Tourism tools
Proexport around the world
Rely on us to support you in identifying and developing business with Colombia
www.proexport.com.co
NombreCargoCorreo electrónico