WHICH IS THE FUTURE OF COLOMBIAS EXPORTATION AND WHICH ARE

THE OPERATIVES CHANGES THAT HAVE COME UP AS A RESULT OF THE

FTA SIGNATURE

For a long time the Colombian economy enjoyed the joyous times associated with
the boom in oil and mining, which are now experiencing one of its most severe
crises. All because of the end of a favorable cycle of high prices that generated
many opportunities.

So much so, that the fall in exports to the extractive industry exceeds 48%, which
has led analysts to wonder how this vacuum will be replaced, despite the fact that
oil has had a recent rebound that would not go beyond Of US $ 45 per barrel.

Regarding the behavior of exports in the last 12 months to February, the fall was
34.7%, after selling to the world US $ 51,751 million in 2015, compared to US $
33,811.1 million in 2016.

In February alone, total exports fell by 27.7% to US $ 2.297 billion, when a year
ago they reached US $ 3,133 million, according to the National Administrative
Department of Statistics (DANE).

And this undoubtedly occurs in a scenario of a shift towards lower projected growth
(2.7% for this year, according to the Bank of the Republic), which leads to the
contraction of exports, whose situation has been unfortunate On behalf of
neighboring countries. In the midst of this panorama, described as 'turbulent' by
specialists, Colombia is expected not to go so poorly waged.

After a global economic deterioration, the strength of the dollar against the peso
(until recently) was the trend in the market. However, one has to ask: why, if a
devaluation of the peso, which in the last year has reached 16.6%, has foreign
sales reacted? One of the reasons has to do with the fact that Colombian sales
abroad mainly go to the United States, Venezuela, Ecuador, Peru, Chile and
Mexico, which have also been hit (except the United States) by the oil crisis and
raw materials.
"It is not enough a dollar high so that exports shoot up. There are not enough
markets and prices have fallen, "Analdex president Javier Daz said a few days
ago before the price of the dollar was trading below $ 3,000.

It also influences that these exports go to markets that are less devalued than the
Colombian, but this is not the case. And the markets where these non-traditional
sales were served have closed them, as in the case of Venezuela and Ecuador.

But Colombian entities are 'doing the homework'. For example, Procolombia aims
to increase the number of companies that export by 1,000 new permanent export
firms and push sectors that account for 62% of non-mining energy exports. For
example, we highlight plastics, packaging and packaging, toiletries and
pharmaceuticals, auto parts and vehicles, metalworking, confections, confectionery
and processed foods, specialty coffees and beef.

Entrepreneurs, although they recognize the compensation that has been given in
foreign sales via the exchange rate, believe that it is not always complete, because
sometimes they resort to the purchase or importation of external inputs. Like who
says: what comes out eaten by what is served.

"The most sensible thing that businessmen should do is learn how to make hedges
in the future. At this juncture it is difficult to increase foreign sales and, therefore,
part of this turnover is concentrated in the local market, "says Wilson Tovar,
manager of Research Economics Acciones & Valores, Western Union.

How to replace exports? For example, former Finance Minister Rudolf Hommes
recently pointed out that "there is no explicit plan to get out of the pot. If there were,
it would surely be working on what would have a more immediate result, which
would be the increase in investment and agricultural production, and the
exploration of oil, "he says, noting that the recommendations of the Rural Mission
and the need to promote other industrial sectors.

The voices that point to the need to release the dependency are noted in the
academy. This is highlighted by Edgar Jimenez, a professor of Capital Markets at
the Jorge Tadeo Lozano University, who asserts that: "we get used to living on oil
and neglecting the industrial sector and that is where much of the recovery can be,
as well as the agricultural sector "He says, noting that Colombia should be a food
exporting country.
For the time being, the need to seek new sectors and export opportunities is more
than clear. The government's idea for this year is to reach US $ 20,995 million in
exports of goods and services other than hydrocarbons and minerals. Therefore,
trade agreements must be taken advantage of, productive linkages to generate
supply with higher added value and a better export culture.

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One of the purposes of the Government is that entrepreneurs can find information
about potential customers.

The objective of this article is to explore the opportunities for growth, diversification
and competition present in trade between Colombia and Turkey, as well as those
specific ones that would result from a free trade agreement. Five indicators are
calculated to characterize trade and trade policy. Disaggregated data from 2010 is
used to conduct partial equilibrium simulations yielding estimates on trade, welfare
and income effects. The results show that a tariff reduction would result in a trade
increase of 3.7% during the first year, mostly reflected in Colombian imports of
textiles and exports of bananas. There would also be net trade creation effects,
and trade diversion would affect the European Union, the United States and
Ecuador. Turkish and Colombian consumers would gain in terms of welfare and
Turkish tax revenues would fall more than those of Colombia.

Keywords: Colombia - Turkey free trade agreement, trade creation, welfare

effects, partial equilibrium simulation.