Overview of best prospect sectors, major infrastructure projects, significant government procurements and business opportunities.
Following the signing of the Peace Agreement with the FARC insurgency group in 2016 and Colombia’s improving security environment over the last two decades, the country is enjoying a period of improved stability and economic prosperity relative to the height of the conflict with the FARC in the 1980’s and 90’s. This post-conflict era is stimulating development in several key sectors, including infrastructure, tourism, job training, education, and rural development.
Colombia officially became a full member of the Organization for Economic Cooperation and Development (OECD) in April 2020. In its membership commitments, Colombia agreed to focus on reducing informality in the labor market and enhancing worker rights through working-hour caps and stronger protections for union activists. Colombia is also a member of the World Trade Organization (WTO). The Colombian Government generally notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade. In August 2020, Colombia fully joined the WTO Trade Facilitation Agreement (TFA). Regionally, Colombia is a member of organizations such as the Inter-American Development Bank (IADB), the Pacific Alliance, and the Andean Community of Nations (CAN).
Colombia invested USD 4.1 billion in the United States in 2020, supporting at least 5,000 American jobs. Colombia’s extensive ongoing infrastructure projects will generate demand for project financing, design, logistics, as well as equipment for construction of public roads and airports, water treatment, water supply, electric power generation, pollution control technologies, port security, railway construction, transportation, security and defense items and services, and mass transit systems. New Infrastructure initiatives will bolster demand for these services in addition to creating demand for services related to river dredging, airport master plans, urban planning, and other construction and design services.
The newly elected Petro Administration has indicated it will focus on economic development in more remote, less developed parts of the country. This should create opportunities in the development of tertiary roads, aqueducts, bridges, and schools in rural areas with underserved communities.
The U.S. Trade and Development Agency (USTDA), the Development Finance Corporation (DFC, formerly the Overseas Private Investment Corporation- OPIC), and the Export Import Bank (EXIM) of the United States supports U.S. companies to develop export markets and make inroads in key sectors such as oil and gas, petrochemicals, renewable energy, telecommunications, transportation, and ports. USTDA grants have resulted in significant contracts being awarded to U.S. companies at Colombia’s two oil refineries, and USTDA grants for customs security and operational enhancements at the ports of Cartagena, Buenaventura, and Puerto Salgar should increase prospects for U.S. exporters.
Colombia is one of four countries in Latin America that is authorized by U.S. Customs and Border Protection (USCBP) to use its Global Entry program, which allows expedited screening and processing of low-risk, international visitors at airports in the United States. Former President Duque also signed an agreement in 2019 with USCBP for a Preclearance facility at Bogota’s El Dorado Airport that, when implemented, would allow Colombian travelers to land in the United States as if they had flown on a domestic flight. Both programs will facilitate increased business and leisure travel by Colombians to the United States. Colombia continues to work with U.S. Government counterparts on the specifics of this program, especially the financing angle of the Preclearance installation.
On August 3, 2020, the Colombian Government published Decree 1090 of 2020, implementing the de minimis threshold for customs duties on shipments valued at USD 200 or less. Previously, Colombia applied the USD 200 de minimis only with respect to taxes, not customs duties. The decree resolved a longstanding open issue under the U.S.-Colombia Trade Promotion Agreement and took effect on August 18, 2020. Shipments that reach Colombia through the official mail network and express delivery services, whose FOB value is equal to or less than 200 U.S. dollars, not including delivery costs, will not be subject to the payment of customs duties. In September 2021, a new law was passed limiting the application of de minimis to shipments that embark from the United States and that are not intended for commercial end-use, defined as over six items in the same class.
In May 2022, Colombia published a definitive version of its roadmap for offshore wind development, part of a broader plans to wean the country off hydropower and fossil fuels. The Ministry of Mines and Energy is preparing an auction for offshore wind concessions amid efforts to tap up to 50GW of power generation potential off its Caribbean coastline. The contracts would likely be awarded by the first quarter of 2023. The first projects are expected to begin commercial operations in 2030.
In addition to the eCommerce opportunities afforded under the current de minimis threshold, other opportunities for U.S. exporters include: agricultural products like cotton, wheat, and pork; automotive parts and accessories; aviation parts and accessories; computer hardware and software services; IT equipment and services; electrical power systems; safety and security equipment; food and beverage processing and packaging equipment; medical equipment; plastics materials and resins; oil and gas equipment; and mining equipment.