Trade agreements of Colombia: Impacts on trade balance and foreign direct investment

Abstract

Objective: The purpose of this study was to determine the impact generated by the Trade Agreements signed between Colombia and twelve (12) countries observed. The contrasted periods were, on the one hand, the year of signing the Agreements, and the period between 2014 and 2016. Method: The analysis of the generated impact was carried out through the mixed method, since there were data contrasts, as well as an analytical focus of the results, adding to this the bibliography review on the subject. Results and discussions: It was observed that the Trade Agreements of Colombia have generated an attraction of Foreign direct investment FDI, having now greater investment income in comparison with the date of subscription of the Agreements; On the other hand, the commercial exchange showed a negative trade balance, explained by the increasing levels of imports and the stagnation of exports. The literary review on the subject yielded diverse arguments, among which they emphasize that the IED can generate positive impacts, as well as negative ones in the issue of economics and social inequality; and that in order to understand the trade balance, it is necessary to identify the situation in the countries' internal infrastructure. Conclusions: Among the conclusions of the study, it was determined that Colombia must strengthen its productive system by diversifying the domestic market, improving the logistics infrastructure, adding innovation and technology to goods and services; to consolidate the country as an international investment destination and increase export flows.