Colombia trade minister looks to five-pillar plan to reactivate growth

Q: What are the pillars of the government plan to give new momentum to the Colombian economy?

A: The plan has got five main pillars. First, we want to boost Colombia’s long term economic potential to stir up the interest of domestic and foreign investors. In this perspective, the country’s free- zone programme has to be strengthened and renewed.

Second, we have to improve the country’s competitiveness by lessening the existing red tape and thus making the life of businesses easier. Third, we must commit to increasing productivity of the Colombian economy. This involves effort across the board – infrastructure, education, legal stability, innovation – also at a micro level, helping producers to raise their productivity.

Fourth, support entrepreneurship. And last but not least, widen the economy’s sources of long-term growth, strengthening sectors such as tourism, services exports and creative industries, but also make the most of the existing free-trade agreements [FTAs] with commercial partners. This government is not going to start negotiations for new FTAs, so we have to identify the export potential for the existing trade agreements and fulfil it.

Q: What are your expectations for the future of the FTA with US? Do you expect the White House to be willing to renegotiate it once it wraps up negotiations for the new Nafta with Mexico and Canada?

A: The FTA with the US has been a major source of imports, exports and investment. We have to nurture the relationship with the US and strengthen it. The bilateral management of the agreement has been positive so far, and we have had good conversations with the Department of Commerce. In that context, we have been generally able to sort out any issue – so far, minor issues.

Q: The FTA with the US has got a pretty flexible rule of origin, which was one of the issues that triggered the renegotiation of Nafta. Are your US counterparts comfortable with that?

A: They have never shown any intention of renegotiating the FTA, including its rule of origin regime. At the moment our overall position is to make the most of this commercial relationship.

Q: Colombia has a relatively unfavourable fiscal regime for corporates when compared with other countries in Latin America, and little budget space to cut taxes. How are you planning to lure foreign investors?

A: We have to continue to strengthen our special economic zone [SEZ] model. SEZs have created 150,000 direct and indirect jobs in Colombia, drawn investment for about 43bn pesos [$14.4m] and grown at quick pace. At the moment, companies under a SEZ regime pay a 20% corporate income tax, which we want to sustain and renew for a [lengthy] period. [An overall renewal of the 30-year legal framework detailing the country’s SEZ regime is still pending in Congress.] 

Q: How are you going to support the development of the creative industries?

A: The creative sector can be very attractive for exports. It makes the most of the creative talent of Colombian people. We have to make life easier for companies that export these types of services and stir up the industry with convenient financing and benefits. We have already approved fiscal benefits for companies in the sector, and also launched a state-backed credit line offering preferential rates and terms.