MARKET POLICY BOOSTS COMMERCE
Export diversification and strengthening of commercial ties mark Colombia’s trade targets

Increased competition from global players will fuel foreign investment in the textile sector, which is currently striving to expand

Colombia is in the process of mobilizing its export sector and organizing an assertive and cohesive marketing policy abroad. Internally, the strengthening and diversification of non-traditional exports has become a priority and industry leaders are coordinating their efforts to promote Colombian products. Externally, the country is taking advantage of trade agreements such as the Andean Trade Preferences and Drug Eradication Act, strengthening regional trade alliances not only within the Andean community, but also with the Caribbean Common Market (CARICOM), and exploring the possibilities of free trade agreements with North American countries.

One of the driving forces behind this new dynamic is Proexport, the agency in charge of promoting the trade and export of Colombia’s non-traditional products. Proexport has been making efforts to diversify Colombian exports, which have been traditionally concentrated in coffee, petroleum, coal, and flowers, and its programs currently benefit 2,472 small and medium-sized Colombian companies. Fifteen Proexport offices abroad provide information on access to 36 different countries. Proexport Chief Executive Officer Luis G. Plata, states, “The trend has been to diversify and the results are now visible. Of the US$12 billion that we export today, half is traditional and the other half is non-traditional, such as apparel, textiles, auto parts, and seafood.”

LUIS GUILLERMO PLATA President of Proexport

Another national agency working to improve Colombia’s export policies is the National Association of Exporters (Analdex). President Javier Díaz-Molina says the agency is busy developing strategies for niche markets. He comments, “Colombia has advantages in light industry and it’s toward that production niche that major development emphasis is being done. In addition, Proexport has designed a market intelligence system that permits us to rely on demand, rather than offer, in addition to identifying the markets and niches we should target.”

Among Colombia’s more traditional exports, coffee and cut flowers continue to generate substantial foreign revenues for the country. In 2001, Colombia exported US$544 million in cut flowers and US$257 million in coffee to the United States. Flower exports are promoted by Asocoflores and, in addition to the National Federation of Coffee Growers, the promotion of coffee exports is carried out by Asoexport, a private association that has been working to deregulate the market. Asoexport President Jorge E. Lozano Mancera says, “We continue highlighting the need to liberalize coffee exports and we are optimistic with the new open climate in the country.”

Colombia’s textiles prepare to tread the international catwalk
Accounting for about 2% of Colombia's GDP, the textile and apparel industries are an important component of the domestic economy. Moreover, exports to the United States have increased significantly since the sector’s inclusion in the new Andean Trade Preferences and Drug Eradication Act (ATPDEA). ATPDEA exports through 2006 are calculated to reach $2.5 billion, an estimate that is raising expectations of a significant growth of employment in the sector.

CARLOS ALBERTO BELTRÁN President of Coltejer

Mr. Carlos Alberto Betrán, President of Coltejer, Colombia’s largest textile company, says that ATPDEA has had a much-needed impact on the sector, especially considering the crisis in Venezuela, previously one of Colombia’s largest export destinations. He states, “I would say that ATPDEA is a salvation for this sector. In the first term of this year, Coltejer showed sales growth of over 35%. We are now reaching our full production capacity and carrying out investment plans in order to enlarge our installed capacity.”

Small and medium size companies with little experience in foreign markets are receiving help from Inexmoda, the sector’s promotional organization, to improve their performance and explore their export potential to benefit from the ATPDEA agreement.

CARLOS FERNANDEZ GONZALEZ President of Hermeco

One such company is Hermeco, which specializes in infant and children’s clothing. Company President Juan Camilo Hernández says that Hermeco is looking for foreign partners to facilitate its projected entrance into U.S. markets. He explains, “We want to enter the U.S. market by the year 2005 and we plan to begin by targeting the Latin market in Florida and Texas.”

Inexmoda Chief Executive Officer Roque Ospina says that Colombia’s textile sector is now gearing itself up to face the increase in competition that will arrive when ATPDEA ends. He comments, “We expect increased competition as early as 2005 from the big exporters like China, so we are looking into the prospects of foreign and domestic investment in the sector. We have the advantage of our proximity to the United States, whereas Southeast Asia is much more distant, thus we want to establish plants and production equipment here, especially aimed at U.S. exports.”