Colombia – An Expatriates Paradise Found

There are many countries that deserve their poor reputation, and for decades Colombia was one of them. Narco-terrorism, human rights violations, and a host of other challenges have plagued it for years.

However, Colombia is working hard to shed this image and, since 2012, has even topped the list on the “Global Barometer of Hope and Happiness” (a global poll by the WIN/Gallup International Association),1 coming in first or second.

Although there are still safety issues, as is the case with many emerging market locations, this South American nation of 50 million has become flexible and welcoming, eager to do business with foreign investors. This may lead one to question why companies still find it difficult to recruit employees for assignments here. Those who have been deployed to Colombia will probably agree that one of the hardest parts is leaving.

In this paper, we will explore some of the key factors associated with doing business in Colombia (including the impact of its history and recent trade agreements), the challenges of entering the Colombian market, and the advantages of living here.

Colombia’s Dark Past

A brief look at Colombia’s past reveals a violent struggle between its government and an extremist left-wing group called the FARC. Since the 1960s, the FARC (Fuerzas Armadas Revolucionarias de Colombia) has played a role in making Colombia both an unwelcome place for capital investment and an unsafe place for its inhabitants. This group has funded itself through kidnapping, illegal drug trafficking, and outside forces friendly to its Marxist dogma.

Today, although the FARC movement is still alive, it has been minimized by the concerted efforts of Presidents Álvaro Uribe Vélez and Juan Manuel Santos. Their measures have included targeted attacks that have eliminated key FARC members and, more recently, peace talks. Organizations and companies that have invested in Colombia and helped to improve living conditions have also weakened the FARC’s influence.

U.S. Colombia Free Trade Agreement

In 2006, during the second Bush administration, the U.S.-Columbia free trade agreement was signed. However, it wasn’t ratified until 2011, under President Obama, and did not go into effect until May 2012.

Compared with other trade agreements, such as NAFTA in 1994, this FTA generated considerably less noise. But despite the quiet, there was strong resistance against it. Human rights organizations pointed to problems of civil unrest, as well as a long history of labor and human rights violations in Colombia.

The rationale for the FTA signing, finally, was that such agreements would do more to strengthen Colombians in legitimate power. Additionally, the United States had already made huge investments in Colombia by funding military operations to defeat FARC and other negative influences. It was also being pressured by nations already trading with Colombia and reaping rewards.

Once the agreement was implemented, more than 80 per- cent of U.S. industrial goods exports to Colombia became duty-free. These included agricultural commodities such as wheat and barley, many kinds of produce, meat, wood, fertilizers, technology equipment, aircraft and parts, and building materials. This agreement also increased access to Colombia’s highly lucrative services market for American corporations. 

Clearly, the U.S.-Colombia FTA has proven to be of benefit. The influx of U.S. and other foreign money has done far more to defeat Colombia’s negative forces than withholding trade…