Colombia’s overall trade balance with the United States continues to plummet into deficit, according to the latest US Department of Commerce statistics.
Though trade on the year is still slanted slightly in Colombia’s favor, the surplus has shrunk to just over 5% of its value at the same point in 2013.
A report published by the US Census Bureau Wednesday shows that Colombia’s trade balance with its largest partner dropped by over 400% in April, as compared to the same month last year. At -$125 million, April’s trade balance dropped $80 million from March 2014 alone, coming in at $550 million less than in April 2013, when it stood at surplus.
For Colombia, the hit has been two-fold, as imports from the United States are up and exports to the United States are down — by $309 and $241 million, respectively — as compared to April of last year.
The deteriorating outlook is part of a larger trend that has seen Colombia’s trade dynamic with the United States suffer since the implementation of the country’s joint free trade agreement (FTA) in the summer of 2012.
President Juan Manuel Santos had predicted prior to signing of the FTA that exports to the United States would grow by at least 6% in the first year of free trade. Last year, however, exports to the United States dropped by 15.5%.
In the first four months of 2014, the Colombia-United States trade balance fell by more than $1.4 billion as compared to 2013, all but evaporating what was once a strong and longstanding surplus.
It is unclear to what extent the shift in trade value has been caused by the implementation of free trade policies, as ongoing tariff reductions have been progressive and thus far limited to certain sectors.
Critics say, however, that free trade poses particularly grave threats to Colombia’s struggling agricultural sector, which produces much of the country’s exports to its North American partner. Organizers behind ongoing national strike efforts have called for the renegotiation of all existant FTAs.
Though a pending FTA with South Korea has stalled in the Colombian Congress behind a widespread opposition push from industrial and agricultural leaders, Colombia has shown no sign of adjusting its current trade policy.
Neither of the candidates in Colombia’s second round presidential runoff election are in favor of reforming existant free trade policy. Frontrunner Oscar Ivan Zuluaga (Democratic Center — Centro Democratico) has said he would not sign any new agreements, while incumbent President Santos continues to promote free trade as a vehicle for national development.
Agricultural products from the United States are heavily subsidized by the government, and critics point out that Colombian industry cannot compete with well-developed foreign sectors, in part due to the poor state of national infrastructure.
The United States remains by far the largest destination for Colombian goods, receiving over 26% of the country’s total export value, according to the latest figures from the Colombian statistics agency (DANE).
Exports to the United States dropped 27.8% in the first trimester of 2014 and by 48.6% in March, reported the DANE, in a report released in May.
The DANE has yet to publish its figures for April, and Colombia Reports was unable to reach a DANE official at the time this article was published.
- U.S. international trade in goods and services (U.S. Census Bureau)