La agricultura colombiana de cara a los pactos bilaterales de comercio

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August 2013

Produced by: Carlos Gustavo Cano (Central bank of Colombia)

The primary obstacle to genuine multilateral global trade liberalization has been the extreme protection of agriculture in the wealthiest economies. The route left open after the collapse of the Doha Round is that of bilateral free trade agreements, which are of limited scope. The agreement with US is the result of Colombia's priority interest in making permanent the concessions granted temporarily to a portion of its exports in compensation for the fight against illegal drugs, but at the expense of the Andean Price Band System, which was the only mechanism for border protection against the subsidies to agriculture in the United States. In the agreement with the European Union, the winning sector was fruits and vegetables, and the loser was milk and dairy products. However, both treaties may lose relevance once the US and the European Union sign the treaty known as the Transatlantic Trade and Investment Partnership (TTIP), given the huge trade diversion effect it would have. Depletion of the secular downward cycle in prices for agricultural products, and the onset of a new one characterized by an upward trend in the medium term could overwhelm the narrow spaces of such bilateral pacts with respect to the sector. To respond to these challenges and to seize new opportunities, Colombia should focus on the mass adoption of biotechnology and on resolving the conflict between current use of the land and its true agro-ecological vocation.

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