Free trade agreement helps Colombian leather industry

Colombia
Published:  03 August, 2013

Exports of footwear, leather, and leather products to the United States from Colombia grew 9.2% between May 2012 and May 2013. May 2012 marked the entry into force of Colombia's Free Trade Agreement with the US. 

Between January and May 2013, the sector's foreign sales to the US grew by 25.9%. Between May 2012 and May 2013, the sectors foreign sales grew 9.2%.

According to the Minister of Trade, Industry, and Tourism, Sergio Diaz-Granados, these results demonstrate how this sector is one that has taken advantage of the preferential access to the US market, which is provided under the FTA. The Minister's comments came at the opening of the 28th International Footwear and Leather Show.

In the first year of the FTA, 32 new companies of the footwear, leather, and leather goods sectors have begun to export to this destination for the first time. Of these, 14 correspond to the footwear sector, while the other 18 are of the leather industry and its manufactures. Also, between May 2012 and April 2013, the sector exported eight new products to the US.

For the senior official, this behavior confirms how free trade has been a key factor to boosting the nation's manufacturing exports, and he added that with the FTA, sales of the leather industry have risen above the average that was recorded between 2002 and 2012, when they varied around 5%.

The Minister emphasised the benefits that come through FTA’s with developed countries, in terms of improving the business landscape of this industry because in addition to the US, exports to Canada have also been growing under Colombia's FTA with that country. In fact, a growth of 29% was recorded for exports destined for Canada between August 2011, when the FTA took effect, and May of 2013. "So, the FTA will be the path that Colombian exporters will use to tap more niche markets for their products," he said.

Moreover, the Minister also highlighted the decrease in imports by the manufacturing sector. He explained that last May, the decline exceeded 65%, and that the Government will spare no effort in taking measures to protect domestic industry from possible dumping.

The Minister also expressed the importance of creating a public-private work-table to assess various areas, such as design, market identification, and trade measures, where timely decisions can be made.

As for the issue of smuggling and contraband, he said that this was no longer a minor crime, as it is linked to drug trafficking and money laundering. He explained that almost 87% of footwear imports come from countries with which Colombia has not signed a free trade agreement.

Source: 4-traders.com

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