25 de June 2012
FTA with the United States of America will attract foreign Investment to Bogota
A research conducted by Invest in Bogota shows that in Bogotá and Cundinamarca there are favorable opportunities for the attraction of foreign investment, due to the FTA with the United States of America.
The FTA allows a free tariff access for 99% of exporting products, with this, Bogotá and Cundinamarca will have access to a potential market of more than 15 billion US$ and 313 million people. Adriana Suárez, Executive Director for Invest in Bogota, explains: “This agreement makes us more internationally visible, facilitating an increase of investor´s trust which will be reflected on higher capital flow coming into the city and a more diversification of investment products.”
The FTA investment chapter with the United States confirms the validity of important elements of our legal stability, such as:
Fair treatment of foreign investors.
Clear regulations to protect investment.
Covered investment cannot be nationalized or expropriated.
Free transference of resources related to investment, from and towards the territory.
Investors do not have to comply with hiring requirements such as demanding a specific nationality for senior or managerial positions.
Investment coming from the United States is expected to increase, especially in telecommunications, banks, energy, BPO, IT and chemicals, among others.
Estimates are encouraging; a survey done to investors conducted this year by the Chilean company “Inteligencia de Negocios” (IdN) shows that to more than a half of investors (58%) who took part of it, the main risks taken when making an investment decision in a country have to do with regulations, expropriation or changes of the rules of the game. The signing of the FTA with the United States represents an improvement of all these aspects; 45% of respondents believe that a Free Trade Agreements is a key aspect when making investment decisions.
Suárez continues: “Taking into account that Bogotá gets more than 79% of investment not related to oil in the country, the city can take advantage of new investment flows, especially the ones concentrated on areas of high research, development and innovation. The FTA promotes investment to reach sectors of more added values for the city, generating employment, strengthening productive chains, motivating technology transference and promoting the use of the available qualified human resource. This type of investments contributes to Bogotá´s economic growth and the quality of life of its inhabitants.
Different studies show that the impact of the FTA on foreign investment will be positive and almost immediate; Bogotá is very likely to become a global center of services. Invest in Bogota estimates an approximate 15% increase of the IED in Bogotá during the first years of the FTA implementation.
Identified opportunities for Bogotá
Bogotá as an exporting platform for countries without a FTA with the USA: Countries without an FTA with the United States such as Brazil, Argentina, European and Asian countries, thanks to the improvement of regulations, are motivated to base their plants in Bogotá aiming at making of it their platform to get to the North American market.
Dynamic foreign trade: The FTA will boost foreign trade, especially the export of services where Bogotá has solid companies with a high growing potential.
Competitive sectors of higher value added:
Mining-energy Services (hydrocarbons, mining and renewable energy).
Consultancy and professional services in geology and seismic; manufacturing of tools – metalworking, electric and electronics; infrastructure maintaining; and environmental consultancy and technology.
Offshore services (IT, BPO, audiovisual production and health). Digital animation; software development; applications for mobiles and electronic devices; video games; business intelligence and informatics security; health and aesthetic tourism; and training.
Manufacturing (plastics, auto parts, medical appliances). Auto parts and electronic components; home appliances and industrial and commercial refrigeration; building materials; engines, air compressors and turbines; batteries; biodegradable and plastic seals.
Agroindustry and biotechnology (fruit and vegetables, natural ingredients and biotechnology). Fruit, vegetables and berries; natural cosmetics; research and development of new varieties; and processed food.
Identified challenges for Bogotá
To increase the population trained in technical and professional areas (PhD) needed by outsourcing, science, technology, research and development companies.
Infrastructure improvement to connect Bogotá with the world. El Dorado airport renovation will allow Bogotá to increase the volume of exports to the United States.
Institutional strengthening to face the FTA, especially in topics related to surveillance, control, commercial defense measurements and clear regulations.
To increase bilingualism. Invest in Bogota works with the Secretary of Economic Development and the Secretary of Education to continue promoting bilingualism projects which have been included by the district administration as a strategic topic of its development plan. Bogotá has more than 11,000 people certified at a B2 or higher level, a result of the joint effort made by the District and Invest in Bogota through the Talk to the World program.