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1994-05-02
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<text>
<title>
Colombia: World Trade Outlook
</title>
<article>
<hdr>
World Trade Outlook 1992: Colombia
Reform Measures Under Way As the Recession Recedes
</hdr>
<body>
<p>By Laurie MacNamara
</p>
<p>Following a 4.2 percent rise in gross domestic product in 1990,
the Colombian economy registered the effects of moderate
recession with a projected 1991 growth rate of 2.2 percent.
Monetary policies, which succeeded in bringing down 1990's
record high 32.4 percent inflation rate to 26.8 percent in
1991, were the chief causes of the recession. The Colombian
economy should post higher growth, in the 3-4 percent range, as
the recession runs its course this year. Inflation should remain
at about the 1991 level or decline slightly.
</p>
<p>U.S. exports 1991--$1.9 billion U.S. imports 1991--$2.7
billion
</p>
<p> Preparing for new challenges in the 1990s, Colombia has
initiated trade and investment measures that put it at the
forefront of reform. Colombia's five-year trade liberalization
process, known as the "Apertura," seeks to internationalize the
economy by exposing domestic industry to foreign competition
and streamlining government regulations in the export and
foreign investment sectors. The Colombian government estimates
that growth rates could rise to 5-6 percent annually with full
Apertura implementation. Under the Apertura program, Colombia
has virtually eliminated import licensing requirements and
reduced tariff rates and dispersion. Current duties range from
0-15 percent, with 40 percent of tariff-line items entering
duty-free. The import surcharge has also been reduced, from 13
percent in 1990 to 5 percent. Other major reforms include
elimination of advance deposit requirements and cargo reserve
restrictions, and privatization of foreign exchange
transactions.
</p>
<p> Colombia's exports totaled $7.6 billion in 1991, an 8 percent
increase over 1990's $7.1 billion. U.S. imports of Colombian
products declined an estimated 16 percent in 1991, reflecting
the dampening effects of the U.S. recession. Major U.S. imports
of Colombian products include crude oil, coffee, cut flowers,
bananas, and women's apparel. The United States remains
Colombia's largest customer, with a 43 percent market share.
</p>
<p> Colombian imports declined by 12 percent in 1991, to $4.5
billion from 1990's $5.1 billion. Colombia's own recession
nullified the trade benefits provided by the Apertura reforms.
U.S. exports to Colombia declined by just 5 percent,
demonstrating the continued strong preference for U.S. goods.
Major U.S. exports include civil engineering equipment,
computer hardware, wheat, auto parts, and telecommunications
equipment. The U.S. share of Colombia's import market remains
at 36 percent.
</p>
<p> In January 1991, Colombia enacted Resolution 49, granting
national treatment to foreign investors in all matters except
remittances abroad. This effort anticipated the same measures
adopted by the Andean Pact under Decision 291 by several months.
Resolution 51 of November 1991 went even further by removing the
remittances limitation. Other important benefits of these
resolutions include the elimination of government screening
requirements and the removal of investment restrictions in most
areas (exceptions are public services, energy generation, public
health, and communications). Colombia offers excellent export
opportunities for U.S. companies. Best prospects for 1992
include telecommunications equipment/services (especially
cellular telephones/value-added services), oil and mining
equipment, automotive parts and accessories, computer hardware
and software, construction products, medical equipment, railroad
equipment, pollution control equipment, agricultural machinery,
printing and graphic arts equipment, textile machinery, consumer
electronics, and toys and games.
</p>
<p> Colombia's premier trade event, the Bogota International
Trade Fair, will be held July 15-26. The U.S. Pavilion,
organized by the U.S. Embassy's Commercial Section, will feature
the latest developments in manufactured housing technology and
urban development. This represents an extraordinary opportunity
for U.S. companies in construction and satellite industries to
reach a burgeoning market. For more information on the U.S.
Pavilion, contact the Commercial Section, Unit No. 5120, APO AA
34038.
</p>
<p> For further information on doing business in Colombia,
contact the U.S. Commerce Department's Colombia Desk Officer at
(202) 482-1659.
</p>
<p>Source: International Trade Administration, Business America Magazine
</p>
</body>
</article>
</text>