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.

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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

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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

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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

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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

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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

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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

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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

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Commercial Information and supply suitability (Zeiky, DEI, Cooperación)2

Trade Missions for Buyers3

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Technical Missions and Trade Missions

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Trade Agenda

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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

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SIFAI2

Preparation of tailor made information

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Coordination and development of agendas for investors

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Portfolio of Investment tools

Work with journalists and influential opinion generators

Joint promotion at regional level

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Joint work plan - Export Plan1

Joint promotional plans with operators6

Institutional Projects2

Special Projects3

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Workshops, destination presentations and International Trade Shows7

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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

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