On May 18th of this year, Colombia became one of the first Latin American countries to formalise its free trade agreement with the UK since Brexit. The ratification of the United Kingdom-Andean Countries Trade Agreement looks to support new trade opportunities for companies and investors in both nations.
According to the joint statement released regarding UK-Colombia trade dialogue by the Department of International Trade, Colombia aims to position itself as a key partner for the UK in agri-business and other non-traditional exports (such as value-added services and life sciences), as these sectors benefit millions of families and communities in Colombia. In turn, the UK wishes to expand British exports to Colombia in the life sciences, fintech, renewables and infrastructure sectors.
Another consideration taken directly from the joint statement mentions that, taking advantage of the ratification of the agreement and Colombia’s strategic positioning in the middle of the Americas, British exporters are invited to see Colombia as a hub for logistics, production and distribution of their goods and services aimed at the wider Americas. Colombia counts on its free trade zones, ports and privileged maritime access as a means to boost exports to the region.
The UK-Colombia trade agreement addresses the following: competition, transparency and intellectual property rights protection; improved market access for government procurement and services; fosters growth and innovation; and facilitates trade.
Before getting into the details of the key points mentioned above, it is important to mention the UK Prosperity Fund for Colombia, a programme worth £25.5 million with a duration of 5 years (2017 to 2022) and a projected secondary benefit to the UK of £265 million by 2026. The programme was designed to support economic development, unlock economic opportunities and drive growth in the country’s post-conflict and conflict-affected regions. One of the two main objectives of the programme was to contribute to the improvement of the commercial environment. Up to the date of this report, the latest update for this programme was in 2021.
Now, the UK-Colombia trade agreement works towards the following key points:
Competition, transparency, and intellectual property
Promotes free competition and good practices to guarantee the highest benefit to consumers, companies and the economy as a whole.
Promotes the disclosure and validation of information to improve transparency and accountability, involving government contractors, the private sector and civil society.
The trade agreement offers greater protection of intellectual property rights for imports and exports.
Access to the public procurement market and services
Allows UK companies to bid and compete for public tenders in Colombia on equal terms with national companies.
Growth and innovation
Initiatives of Innovate UK, a British innovation agency, and the UK Prosperity Fund programme for Colombia, serve as real time examples of innovation and social development projects with bilateral benefits. Not only do they contribute to the long term livelihood of the UK-Colombia agreement, but they also lay down the foundation for similar activities and projects in the future.
Trade facilitation
Eases trade procedures, such as the exchange of digital certificates of origin, therefore reducing costs and timeframes for exporting from the UK.
In a corresponding manner, Colombia is positioning itself as a logistical hotspot for British companies looking to grow operations in the Americas.
Climate Change
The UK-Colombia trade agreement aims to continue working together towards the fight against climate change. The following programmes are examples of the collaboration of the UK and Colombia in the fight against climate change:
- Colombia Climate Finance Leadership Initiative, CFLI, aims to accelerate climate finance flows into Colombia and build a pipeline of bankable climate solutions and wider investment opportunities.
- Colombia–UK PACT programme, aims to support Colombia’s climate action priorities, with a focus on implementing and promoting nature-based solutions to climate change. Colombia-UK PACT has announced that 15 projects will be extended for a further 12 months, as well as 4 new projects that are to be implemented within their 2022-2023 phase, with an investment that amounts to £7.8 million.
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Author: Global Strategies & Tools