Colombia Could Take Advantage of Trade War, Including Coffee
Colombia Could Take Advantage of Trade War
Coffee Network (Bogota)- A trade war between the US against Canada, China and Mexico could pose opportunities to Colombia, the US-Colombian chamber of commerce.
An analysis by the Colombian-American Chamber of Commerce (AmCham Colombia) identified 144 Colombian items with revealed comparative Advantage (RCA) over China, 43 over Canada, and 37 over Mexico.
The study happens at times US president Donald Trump slapped a 25% tariff over Canadian and Mexican products and a 10% tariff on Chinese products. But Mexican president Claudia Sheinbaum said the US has paused tariffs on Mexico for one month.
According to María Claudia Lacouture, president of the association, these products, belonging to sectors such as agroindustry, textiles, manufacturing, chemical products, plastics, and value-added goods, highlight Colombia as a competitive supplier for the US market. However, she stressed that these types of trade links have been in place for years, sometimes even decades.
Although Antioquia, Bogotá, Valle del Cauca, and Atlántico are the regions that could have the most opportunities, there are also others such as Arauca, Caquetá, Casanare, and Putumayo that could benefit.
“They could diversify their production and compete in international markets with products such as cocoa, tropical fruits, essential oils, or petroleum derivatives,” said Lacouture.
“They could diversify their production and compete in international markets with products such as cocoa, tropical fruits, essential oils or petroleum derivatives,” said Lacouture.
In addition, the document highlights that there are 23 states in the United States, including key markets such as Florida, Texas, California and New York, that could be interested in acquiring Colombian products.
These states, due to their economic size, geographic proximity and high consumption rates of imported goods, offer a broad panorama for Colombian companies to expand their reach and find market niches in various regions of the United States," he said.
Opportunities facing China:
Colombia's greatest opportunities are in the agro-industrial sector, especially in coffee, fresh fruits such as avocado, mango and pineapple, processed fruits such as pulp and juice, cocoa and chocolate, among others.
This is followed by opportunities in the food industry such as, for example, cookies and preserves, processed dairy products, sauces, healthy snacks and products with sustainable certifications.
There are also strengths in chemical products, plastics and minerals. “The export potential for thermal coal and specific metals could be strengthened if Colombia adopts a fair transition policy that proactively promotes the promotion of these products, highlighting them as essential inputs for the global energy transition,” says the analysis.
In addition, the report states that there are a number of opportunities that are currently untapped but that Colombia has the capacity to produce. Among others, electrical components and small household appliances such as blenders, plaster, stone and cement manufacturing, as well as textiles and raw materials stand out.
Colombian girdles, jeans, swimsuits and lingerie and underwear stand out with a differentiated design that would surpass the massive offer offered by China.
Opportunities to Canada:
In the agro-industrial sector there are also the greatest comparative advantages compared to Canadians. Specifically, products such as sugar, prepared fruits and animal or vegetable fats are examples of goods where Colombia has a strong performance and can compete with Canada in the US market.
The document also highlights the country's diversity of fresh and tropical products, such as exotic fruits, which gives it a unique competitive position.
It also highlights that Colombia has an important advantage in being able to produce specialized chemicals such as adhesives, organic fertilizers and chemicals for the cosmetics industry, as well as strengths in the production of underwear and swimwear with competitive costs and innovative design.
As with China, Colombia presents untapped opportunities. These include specialized electrical components, such as small transformers and sustainable LED lighting systems, the ability to assemble parts and components for electric or hybrid vehicles, which are in growing demand in the United States market, and the production of recycled and biodegradable plastics.
Opportunities for Mexico:
Today, Colombia and Mexico share the export of 601 items to the United States. However, only 6.2% of these have a revealed comparative advantage for Colombia. The greatest opportunities are also in the agro-industrial sector. Specifically, in exotic fruits and specialty coffees. In addition, Colombia has strengths in chemical products, such as organic fertilizers and food additives. Textile materials and the manufacture of stone, plaster and cement are also important to compete with Mexico in the U.S. market. Tourist operators that offer free accommodation to displaced people from Catatumbo will receive discounts Among the untapped opportunities, the document says that Colombia has the potential to develop specialized electrical components, such as transformers and energy-efficient devices. In addition, it could focus on the production of recycled and biodegradable plastics, export processed foods, such as healthy snacks and gourmet products, and explore the assembly of components for electric vehicles.
