Colombia Free Trade Agreement: An Open Opportunity For Canadian Businesses
Jointly, Latin America and the Caribbean will register economic growth of 3.7% this year, outpacing the economies of the European Union, Central and Eastern Europe as well as the world average, according to International Monetary Fund data. This confirms Prime Minister Stephen Harper's initiative in targeting Colombia and many other countries in Latin and Central America as priorities in signing free trade agreements.
The Bank of Nova Scotia recently bought 51% share of a major Bank in Colombia, a sure sign of their confidence in assisting business development. Mining companies are also investing in Colombia's rich resources.
The following incentives have been adopted to boost economic development and foreign trade in this country:
- There are twelve (12) Free Zones in Colombia, in Bogotá, Quindío, Aráuca, Cúcuta, Palmaseca, Buenaventura, Rionegro, Malambó, Santa Marta, Barranquilla, Cartagena and La Candelaria (Valle).
- Tax incentives include customs duties and VAT exemptions on goods and services brought into the zones.
- Foreign exchange benefits refer to the right to exchange, hold or negotiate foreign currency; the right to open domestic or foreign bank accounts in a foreign currency and a number of procedural facilities.
- Colombia has nearly five million square meters of modern facilities designated as free zones.
- Four currently depressed border cities (Buenaventura, Valledupar, Ipiales and Cúcuta) have been granted special status to encourage further exports and export-oriented investment.
Canada attended the meeting of the Organization of American States recently in Cartagena, Colombia where many open and successful discussions took place. The banking sector in many of these countries is secure and well capitalized.
Prime Minister Stephen Harper reaffirmed the importance of Canada's relationship with Latin America. In the past few years, Canada has been very active in this regard trying to promote free trade with Latin American and Caribbean countries.
As a result, Canada has recently signed free trade agreements with Panama, Colombia and Peru and is currently negotiating with the Central American Four (Guatemala, Honduras, Nicaragua and El Salvador), the Andean Community (including Bolivia and Ecuador), and the Dominican Republic.
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