Much of Colombia's recent industry can be traced to the first half of the first decade of the millennium, when the Agreement on Textiles and Clothing (ATC) came to an end, and China's entry into the World Trade Organization (WTO). Both had a bearing, and thc country was hit on two fronts. First, there had been a laid-back attitude from the quota days, having benefitted much from it, and second low-cost apparel from China and South Asian countries wreaked havoc in Colombia's local market. Moreover, the wages in those countries were relatively lower to most Latin American countries, including Colombia.
Things began to look better with the US-Colombia Trade Promotion Agreement (CTPA), which was signed on 22 November 2006. The CTPA, however, entered into force only on 15 May 2012. By this time, the contours of global apparel trade had changed considerably, the US was already trying to forge the Trans-Pacifc Partnership (TPP). Colombia was slightly late to the FTA party. Currently, it has 17 FTAs in place.
Most of these FTAs are confined to the Americas, and some overlap. It has separate trade treaties with Mexico, Chile, Cana, the US, Venezuela, Cuba, Costa Rica, Nicaragua; a joint treaty with El Salvador, Guatemala and Honduras; one each with the Andean Community (CAN) [comprising Bolivia, Colombia, Ecuador, and Peru], the Caribbean Community (CARICOM), MERCOSUR (where it is an associate partner to Argentina, Brazil, Paraguay, and Uruguay), the Pacific Alliance (comprising Chile, Colombia, Mexico and Peru). The overlaps are obvious.
Colombia also has a treaty with the EFTA States (Iceland, Liechtenstein, Norway and Switzerland), and the European Union. It also has agreements with South Korea (effective since June 2016) and Israel (effective since August 2020).
It is, therefore, no surprise that most of Colombia's trade is confined to the Americas. It is also here that the prospects of the future lie.
But the futuristic strategy is positioned elsewhere. In 2019, Colombia became the first country in Latin America to adopt a National Circular Economy Strategy, having its roots in the National Policy of Sustainable Production and Consumption of 2010.
Says Caballero: "Sustainability policies are currently not a plus in the Colombian fashion industry; they are a must. We are happy to say that according to the Environmental Performance Index, Colombia ranks first in Latin America in applying ethical practices and sustainable development, second in Social Responsibility, and second Latin American country in the Environmental Performance Index. We have an industry that is already renowned for the use of ecological, recycled, natural, and degradable materials, as well as eco-friendly product development, the promotion of responsible purchasing criteria, the decrease in the use of chemicals in the manufacturing process, and respect for the human and labor rights of workers."
But still, Colombia would need to trade heavily. Keeping an eye on how things in Colombia work for trade is Bogotá-based Biz Latin Hub. The firms Chief Executive, Craig Dempsey, explains: "Several factors make it difficult for Colombia to export to different continents [The full-length interview with Craig Dempsey will be carried on Wednesday]:
- Infrastructure: Colombia's infrastructure, particularly its transportation network, needs to be better developed, which makes it challenging to transport goods to other countries.
- Logistics: The country's complex import/export regulations and bureaucratic procedures can make exporting goods difficult.
- Market access: Colombia faces trade barriers in many markets, particularly in developed countries, which limits its ability to export products to those markets."
Dempsey speaks about Colombia's potential and plus points, and adds: "The success of these efforts will depend on multiple factors, including the state of the global economy, trade agreements, and political stability. To become a more potent exporter, Colombia must continue improving its infrastructure, logistics, and trade regulations while addressing corruption and security issues."