Revision of Colombia’s FTAs and BITs

Free trade agreements (FTAs) are undergoing extensive revision and reform worldwide due to social benefits and cost concerns. This has opened spaces for fostering the democratic legitimacy of FTAs, primarily through greater accountability by the governments in charge of making these treaties. In Colombia, the tendency has manifested in at least three concrete ways: first, through a greater civil society involvement in the discussions about the social benefits and cost of FTAs and increased engagement in overseeing their potential adverse effects on policy space. Second, the Colombian Constitutional Court has strengthened the standard of review applied when examining the constitutionality of international economic law instruments to which Colombia intends to be a party, especially for bilateral investment treaties. Finally, the Colombian Congress has embraced a more significant role in discussions concerning FTAs. Indeed, with the arrival of the “Apertura Económica” policy in the nineties, Colombia has been actively negotiating FTAs. Although the Colombian Constitution requires legislative approval before the ratification of any international treaty, apart from representatives of opposition parties, the role of the Colombian Congress in legislative discussions concerning FTAs was characterized by avoiding extensive oversight or discussion of the government’s commercial policy. This started to change due to several reasons, among which we highlight a more pluralist configuration of the Congress, opening spaces of participation to politicians with more outstanding interests in topics directly affected by the external commercial policy. Also, the framing and positioning of those topics in the political debate by social movements and the general move towards a global landscape demanding a more inclusive globalization process, which, in terms of commercial policy, reopened debates such as industrial policy and the structural barriers to market access faced by developing economies. Against this backdrop, Law 1868 of 2017 created a review mechanism through which the National Government must submit an annual report on the impacts (negative and positive) of the different FTAs ratified by Colombia and the state of the country’s trade balance with the economies with which it has treaties in force. The topics that the report shall include are the exchange of goods and services grouped by productive sectors, the effects of FTAs on the generation, loss, and performance of formal and informal productive sectors; FDI flows in Colombia and the role of FTAs in such an indicator; government’s strategies to take advantage of FTAs, and export offer diversification. Furthermore, the report must be socialized with trade unions, workers’ unions, and representatives of local industries and economic sectors and disseminated through mass media to inform the citizens. Among the main takes from the reporting the Government has made so far, we highlight that Colombian producers have yet to take advantage of the trade preferences granted by FTAs, mainly due to the constraining effects of non-tariff barriers and the lack of diversification in the trade offer. This points to the need for a strategical approach towards the revision of FTAs that includes better sanitary diplomacy to ensure non-tariff barriers are not an obstacle to Colombian exporters, especially small and medium enterprises (SMs), and more comprehensive action by Colombian authorities to help SMs diversifying their exports with added value.
Against this background, the event had three panelists. First, Colombian congresswoman Jennifer Pedraza discussed the increasing role of the Colombian Congress in examining and revising FTAs. Secondly, Daniel Rangel of Rethink Trade discussed the position and interests of the US government in an eventual renegotiation of the Colombia-USA free trade agreement. Finally, Rosa Maria Mateus of a Colombian NGO discussed the impacts that investment chapters in Free Trade agreements have had in Colombia, focusing on indigenous communities in the la Guajira region.