Colombia should look out for the US and the TPP
The United States’ permanence in the Trans-Pacific Partnership (TPP) is still in doubt, however, if it were to go through, Colombia would experience negative economic consequences second only to those felt in Brazil. The reason: an expected reduction in demand for Colombian exports, especially from the United States, Colombia’s main trade partner.
The information comes from a report issued by the Economic Commission for Latin America and the Caribbean (CEPAL), which concluded that Brazil, Colombia and Venezuela will see the sharper drops in exports following a potential introduction of the TPP.
The sectors of the Colombian economy that will be affected the most are oil and mining, which should be expected, considering that they make up the largest part of the total national exports. CEPAL estimates that oil and mining exports are expected to fall around 34% in this scenario.
Other sectors that could be jeopardized by the TPP are food, drinks and tobacco, among all of them Colombia also stands as the second biggest potential loser.
Since the public announcement of the Partnership, Colombia has been looking for a stage upon which it could construct membership in the future. It ticks all the boxes, as it shares a shore on the Pacific and represents a significant amount of the trade carried out across the Pacific Ocean.
If Colombia were to find itself a member of the TPP, these effects would be mitigated, however that is highly hypothetical, as are the results of CEPAL’s investigation. As of now, the future of the TPP looks grim, for a clearer picture we must look back after January 20, when Trump is expected to decide on the future of the largest trade deal in history.