Trade Policy Review: Colombia
1. I commend the Vice Minister and the Disccusant to make very pertinent remarks this morning and many issues which Members had, have been touched on briefly but comprehensively. Chairing the meeting for the fourth Trade Policy Review of Colombia was personally a rewarding experience. The Trade Policy Review of Colombia has provided an opportunity for us to improve our understanding of recent developments in Colombia’s trade and trade‑related policies. I would like to thank Vice Minister Duque of Colombia, Ambassador Eduardo Muñoz and the rest of the delegation of Colombia for their constructive engagement in this meeting. My thanks also go to Ambassador Tim Yeend for his excellent participation as discussant, and to the Members for their numerous interventions. I would further like to commend the authorities of Colombia for the effort made to answer the questions received prior to this meeting.
2. Members generally congratulated Colombia for weathering the global crisis well by using countercyclical fiscal policies, instead of resorting to protectionist trade measures. Colombia has a relatively open trade and investment regime with few restrictions. Members urged Colombia to continue to deepen the liberalization process that had been so beneficial to the country.
3. Members also praised Colombia for having used trade policy to promote sustainable growth and for implementing the National Development Plan 2010‑2014 with the caption “Prosperity for All” which focusses on ensuring that the different levels of society would benefit from growth. Further poverty reduction remained a challenge, but the results achieved so far were impressive.
4. Members expressed their appreciation for Colombia’s active participation in the WTO, particularly in the Doha negotiations; they acknowledged that Colombia was a strong supporter of the multilateral system. They noted with satisfaction Colombia’s participation as an observer in the Agreement on Government Procurement, and urged Colombia to accede to it. Members also urged Colombia to improve its compliance with its WTO notification obligations.
5. Members noted that Colombia’s trade policy thrust since the last Review has focused on the negotiation of preferential trade agreements so as to secure a stable preferential market access for its products. The authorities expect this to continue to diversify exports and attract more foreign investment. Several Members were especially interested in the steps Colombia had taken to implement the U.S.-Colombia FTA.
6. Similarly, there was a positive assessment of the legal and institutional reforms introduced to Colombia’s competition and government procurement framework; however, Members highlighted a number of areas for further improvement, such as the application of SPS and TBT measures.
7. A close examination of the observations made by the delegations during this Review would suggest that there are reasons to recommend that the authorities of Colombia consider introducing further improvements in certain areas, some of which have been already mentioned by the Vice Minister this morning. The main areas are:
- Customs procedures for imports (including rules of origin) and customs valuation: Members commended Colombia for its efforts to facilitate trade through the single window. Nevertheless, they raised questions regarding documentation requirements and the use of customs agents. In this regard, Members urged Colombia to continue to streamline its customs procedures through the implementation of further trade facilitation measures. Regarding Colombia’s customs valuation system, concerns were raised with respect to the continued use of reference and indicative prices as a parameter for checking the reported value during customs inspection, and the criteria to calculate them.
- Tariffs and other import duties: Members expressed their satisfaction with the sharp reduction in Colombia’s MFN applied tariffs, one of the most important trade policy developments since Colombia’s last review in 2006. Members, however, noted that the most recent tariff reduction, which took place in August 2011, was only temporary. Members urged Colombia make the temporary reduction permanent. They sought more information on the application of the CAN Common External Tariff and on the functioning of the Andean Price Band System.
- Non‑tariff measures: Some Members noted Colombia’s use of non-tariff measures, including import prohibitions, restrictions and licensing. They urged Colombia to simplify and clarify its licensing system. In general, Members suggested that Colombia may reduce non-tariff restrictions.
- SPS and TBT: A number of Members questioned the procedures to establish sanitary and phytosanitary measures and technical regulations and pointed out that certain sanitary and phytosanitary measures adopted by Colombia could constitute a barrier to trade. Members urged Colombia to eliminate measures that impeded trade and to introduce a clear notification mechanism so that trading partners could be kept informed of all the measures that are in force.
- Government procurement: Members noted the reforms made by Colombia on certain aspects of its government procurement regime and sought more information on the impact of these changes on procurement procedures, and on the possibility of putting in place a mechanism to deal with procurement-related challenges. Colombia was urged to reconsider the costs to its economy of using preferences for domestic suppliers and was invited to join the WTO Plurilateral Agreement on Government Procurement as soon as it is possible.
- Incentives: Pointing out that Colombia had a series of incentive schemes to attract investment, promote exports, and protect agriculture and other less advantaged sectors, such as micro‑ and small enterprises, Members asked whether Colombia had assessed the impact of these programmes and determined whether they were WTO‑consistent.
- Intellectual property rights: Members sought additional information on several aspects of the Colombia’s intellectual property rights regime. Members were also interested in knowing the steps taken by Colombia to implement the IPR commitments negotiated in the various trade agreements in which Colombia participates. Noting the actions undertaken to strengthen the enforcement of intellectual property rights, including through administrative reforms, Members urged Colombia to continue stepping up efforts in this area.
- Agriculture: Members, while recognizing the importance of agriculture for Colombia, also noted the support and protection received by that sector. Mention was made of the fact that tariff protection for agricultural products was substantially higher than for industrialized goods. Members encouraged Colombia to continue liberalizing the agricultural sector by reducing tariffs, reducing the gap between applied and bound tariff rates, and eliminating incentive and any unnecessary sanitary and phytosanitary measures.
- Services: Members commended Colombia on its continuous efforts to liberalize trade in services and highlighted the restructuring of telecommunications regime as a significant measure. Members encouraged Colombia to continue in this path, for instance, by lowering the nationality requirements and relaxing the requirements for commercial presence in certain services sectors, especially finance, logistics and transport.
- Investment and FDI: Members observed that Colombia had been successful in seeking to attract FDI to boost economic growth and employment, and that most sectors were at least partly open to foreign direct investment. A number of Members emphasized the importance of FDI for Colombia’s future development in view of its infrastructure and technological requirements and urged Colombia to eliminate remaining investment barriers.
8. In conclusion, Members encouraged Colombia to continue with its domestic, regional and multilateral efforts to facilitate trade, increase investment and promote sustainable economic growth. This successfully concludes our fourth Review of Colombia. The detailed nature of the questions submitted and the numerous interventions attest to Members’ interest in Colombia’s trade policies and practices. I would like once again to thank the delegation of Colombia, the discussant and the Members for contributing to an enlightening Review of Colombia’s trade policies and practices.
9. I may also mention the efforts of the Secretariat to compile a very comprehensive report and to organize this Review in a very befitting manner.