Are you a U.S. business considering exporting or doing business in Colombia? Learn more about the opportunities exporting to Colombia presents, and the tools that can help your business enter the Colombian marketplace.
The United States is Colombia’s leading trade partner. With the completion of the U.S.-Colombia Trade Promotion Agreement (FTA) in 2012, tariffs on 80 percent of U.S. exports of consumer and industrial products to Colombia were immediately eliminated, with remaining tariffs set to be phased out in 10 years. This has allowed Colombia to quickly become the third-largest export market in Latin America (LATAM) for U.S. businesses, and has made Colombia the fourth-largest economy in LATAM with its growing middle class that demands U.S. made products and services. The growth and elimination of barriers to trade offer U.S. businesses that are looking to grow their exports to Colombia significant opportunities.
What Sectors Offer the Best Prospects?
The best-prospect sectors for U.S. exports to Colombia include not only the traditional oil, gas, and mining sectors, but also consumer products such as processed food and beverages, medical equipment, travel, and education, all due to Colombia’s growing middle class and its demand for premium products. This is great news for U.S. companies of all sizes as U.S. products and services are respected by the Colombian consumer due to their quality and reliability. With the right mix of pricing and marketing strategies, U.S. exporters are well-positioned to seize business opportunities in Colombia.
What Are the Best Market-Entry Practices?
According to the 2014 Country Commercial Guide produced by the U.S. Commercial Service, the best market-entry strategy to enter Colombia is by securing an agent, representative, or distributor in Colombia. Although local representatives are not required for international firms doing business in Colombia, they bolster buyer confidence, offering assurance that Colombia buyers will have access to adequate after sales service— an important factor in Colombian purchase decisions.
Anything Else I Should Know About Exporting to Colombia?
The Colombian economy is expected to grow at a stable rate in the near-term and presents great opportunities for U.S. companies that are “looking south” to increase their international sales. Infrastructure and economic development is at the forefront of the Colombian government’s priorities, with growth-oriented policies and reforms having been implemented to further open the country to foreign trade and investment.
Need Help Getting Started?
The U.S. Commercial Service and the Export Import Bank of the United States (EXIM) offer products and services designed to equip U.S. businesses to enter international markets. For example, to ensure that U.S. companies select the right Colombian partners, U.S. small and medium-sized businesses can save time and money by working with the Commercial Service and its professional matchmaking service, International Partner Search (IPS), to find pre-qualified global partners who express interest in their products and services. Additionally, the Commercial Service can assist your business conduct due diligence on a potential buyer by generating a customized International Company Profile (ICP) to evaluate your potential business partner’s suitability for your foreign transactions.
Once you have identified the right customer, EXIM offers a suite of finance products to enable U.S. businesses to increase their export sales while safeguarding a business’ bottom line against export risk.
For instance, EXIM’s Global Credit Express is a direct loan designed for small-medium size businesses that require export working capital. Global Credit Express allows U.S. exporters to secure the financing required to produce goods for export and increase international sales by offering a line of credit up to $500,000 at a fixed interest rate. EXIM also protects U.S. companies’ international sales by offering insurance coverage for U.S. business’ foreign accounts receivable, protecting a business’ bottom line against risks ranging from foreign customer nonpayment to currency inconvertibility or to asset expropriation due to political violence.
To learn more about federal export programs, visit business.usa.gov or export.gov. Have immediate questions? Reach out to your local U.S. Export Assistance Center to meet with a Commercial Service Officer, or request a consultation with an EXIM Trade Finance Specialist to get started today.