For over 100 years, Colombia has maintained a strong relationship with its main commercial and political partner, the United States of America. Not only having this friendship with the world leader has increased the importance of the country in the geopolitical context, but also provided several opportunities to fight together against multiple social and economic issues, including narcotics trafficking, terrorism, poverty, and global warming, among others.

With the arrival of former president Donald Trump to the American administration, the bilateral agenda drastically changed. Ivan Duque’s policies were targeting increasing local exports while taking advantage of the trade agreement signed by both countries back in 2012. Nevertheless, Mr. Trump’s protectionism was perceived as a threat to globalization, forcing emerging countries to find new horizons where to expand. 

However, since the creation of the Pacific Alliance (trade-economic agreement signed by Colombia and its Latin partners, Peru, Mexico, and Chile) at the beginning of the last decade, the country has increased its multilateral relations with a busier agenda including generating trade opportunities and investment attraction in Asia and the Pacific region. This not only meant that the nation was eager to open its trade barriers looking for new allies but also letting one of America’s competitors, China, become a strong influence in the region (as perceived by the Department of State). Flows of capital from this country, as well as multiple projects developed, mainly in infrastructure, allowed China to settle in the market offering another point of view. An eastern view.

Considering the recent economic development experienced by Colombia, multiple opportunities in traditional industries (extractive activities, agribusiness, manufacturing), as well as modernization and investment attraction, are the main factors explaining the country’s transformation. Information technologies and communications, services, and creative industries are examples of sectors with great potential and impact on GDP and trade. China, Australia, and other eastern countries are aware of the national development increasing the influence of its international policies and participation of companies in decision making. The arrival of Joe Biden serving as the 46th president of the United States in 2021 is calling for an urgent change in international relations and the South American nation is expected to benefit from it.

2021 is one of the most turbulent times for modern economics and politics. International trade, tourism, and investment are facing a massive challenge to recover pre-pandemic levels. East and west are equally affected and countries like Colombia will face an additional question: How to make this crisis a remarkable opportunity to grow and stand out beyond prior issues? Mr. Duque and the new 2022 president will have the answer: A slow reopening of the country will be the clue, either east or west.

Facts

As mentioned in our internationalization blog back in February 2020, Colombia started its “respice orientalis” (“look toward the east” – China) replacing its traditional “respice polum” (“look toward the north” – United States) doctrine. However, COVID-19 generally affected international trade and diversification plans prepared by the local administration. 2020 demonstrated that local exports are still targeting America as its favorite destination (US $8,9 billion, -22,5%) followed by China (US $2.7 billion, -39,7%). 

During 2020 and despite being affected by the pandemic, according to Procolombia, the country received US $9,077 million in foreign direct investment distributed in 198 private initiatives from 42 countries, especially the United States and China, followed by South Korea, Mexico, India, Japan, United Kingdom, and Australia.

Written by: Nicolás Torres