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II. TRADE AND INVESTMENT REGIME 
(1) OVERVIEW  
1. Colombia is a founding Member of the WTO.  Multilateral agreements rank on a par with 
ordinary laws.  Colombia took part in the nego tiations on telecommunications and financial services 
after the Uruguay Round.  It is an observer in  the Committee that administers the Plurilateral 
Agreement on Government Procurement;  it is not a party to the Information Technology Agreement.  
During the period under review, it has fulfilled its  WTO notification commitments and submitted 
various proposals under the Doha Work Program me.  The Colombian authorities recognize and 
appreciate the importance of the multilateral trading system to the predictability and security of its 
trade policy, but believe that Colombia has lim ited influence on the content and pace of multilateral 
negotiations. 
2. Trade policy is decided largely at national leve l, bearing in mind Colombia's membership of 
the Andean Community.  Colombia assigns high prio rity to the conclusion of preferential trade 
agreements.  Since the last review, it has comp leted negotiation of two new agreements;  the 
agreement with the United States is of particular importance since the United States is the main 
destination for Colombian exports. 
3. Colombia has an open foreign investment re gime.  The Constitution was amended in 1999 to 
abolish the power of Congress to expropriate withou t compensation "for reasons of equity".  In mid-
2005, Colombia introduced legal stability contracts as  an option for investors.  The Government has 
retained, though never used, the authority to iden tify sectors where foreign capital participation will 
be limited. 
(2) GENERAL LEGAL FRAMEWORK  
4. Colombia is a unitary republic.1  The Constitution of 1991 confer s the following rights on the 
country's regional authorities:  self-government;  ex ercise of their respective powers;  administration 
of resources and establishment of the taxes needed to perform their functions ;  and participation in 
national revenue.2  The Constitution provides that a basic law shall determine the distribution of 
powers between central government and the regional authorities, but the law has not as yet been 
promulgated.3  The Colombian authorities indicate that the regional authorities have established no 
measures that affect international trade. 
5. Power is divided into three branches:  the legislature, the executive and the judiciary.4  The 
legislature is a bicameral Congress comprising th e Senate of the Republic and the Chamber of 
Representatives.  The 102 senators and 166 representatives are elected simultaneously by universal 
suffrage for a renewable term of four years.  The most recent parliamentary elections were held in 
March 2006. 
6. The President of the Republic is head of State, head of Government, and the supreme 
administrative authority.5  The Government consists of the President, ministers and directors of 
administrative departments. The President is elec ted by universal suffrage for a four-year term. 
                                                      
1 Article 1, Political Constitution of Colombia, published in the Gaceta Constitucional  No. 116 of 
20 July 1991. 
2 Article 287. 
3 Article 288. 
4 Article 113. 
5 Article 115. Colombia WT/TPR/S/172/Rev.1 
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Presidents were not eligible for re-election until 2004, when the Constitution was amended to allow a 
second term.6  The President has sole authority to appoint and dismiss ministers and directors of 
administrative departments.  The most recent presidential elections took place in May 2006. 
7. The judicial organs are the Supreme Court of Justice, the Council of State, the Constitutional 
Court, the Higher Council of the Judiciary, the O ffice of the Prosecutor General and the courts.7  The 
Constitution also assigns judicial duties to the authorities of indigenous peoples.8  The Office of the 
Attorney-General oversees the conduct of public servants.  Private individuals may rely on 
WTO Agreements and Andean Community rules in  Colombian courts.  Where Andean Community 
rules are cited or in dispute in a final appeal, the court must apply to the Andean Community Court of 
Justice for an interpretation of the Community  provisions.  Colombian courts are bound by the 
Andean Court's interpretation.9 
8. Upon adopting a draft law, Congress refers it to th e Government for approval and an order of  
promulgation.  The Government may remand th e draft to Congress on the grounds that it is 
"unconstitutional or unsuitable".10  A draft remanded as unsuitable will become law if Congress 
approves it a second time.  A draft law deemed unconstitutional by the Government and passed a 
second time by Congress is referred to the Constituti onal Court.  If the Constitutional Court finds no 
breach of the Constitution, the President must appr ove the draft law and or der its promulgation.  
Otherwise, the President of Congress has the authority to approve it.11 
9. Management of Colombia's international rela tions and the conclusion of agreements with 
other States are the responsibility of the President of  the Republic.  International agreements have to 
be approved by Congress and receive a favourable opinion from the Constitutional Court before the 
President of the Republic may ratify them.  Congress has no authority to amend the text of an international agreement.
12  "Economic and trade agreements c oncluded within international bodies" 
may be applied provisionally pending approval by Congress.13  The Constitution allows Colombia to 
transfer "certain duties" to international bodies that  seek to promote economic integration with other 
States.14 
10. The Constitution takes precedence over any other law.15  According to a Constitutional Court 
ruling, in the event of incompatibility betw een an economic integration agreement and the 
Constitution, "the political authorities have a dut y to change the international commitment [of 
Colombia] in order to align it with the Constitution,  or amend the latter to accommodate [Colombia's] 
international obligations".16  The Constitutional Court also ruled that economic integration agreements 
rank lower than certain interna tional human rights agreements, and than basic laws and statutes.17 
                                                      
6 Article 197, Political Constitution of Colombia, as amended by Legislative Act No. 2 of 2004, 
Article 2. 
7 Title VIII, Political Constitution of Colombia. 
8 Article 246, Political Constitution of Colombia. 
9 Andean Community Decision No. 472. 
10 Article 199, Law No. 5 of 1992. 
11 Articles 166 to 168, Political Constitution of Colombia. 
12 Article 217, Law No. 5 of 1992. 
13 Article 224. 
14 Article 150. 
15 Article 4. 
16 Court Order C-582 of 1999. 
17 Court Order  C-582 of 1999.  Article 151 of the Constituti on defines basic laws as laws to establish 
the regulations of Congress and each chamber of Co ngress, rules on the prep aration, approval and 
implementation of the income budget and appropriations law and the general development plan, and those WT/TPR/S/172/Rev.1 Trade Policy Review 
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11. Colombia has suffered from decades of violen ce.  Nevertheless, the Colombian authorities 
say that the rule of law has been maintained and that efforts are be ing made to ward off the potential 
repercussions of violence on the stability of the State.18 
(3) TRADE POLICY FORMULATION AND OBJECTIVES  
12. The Cartagena Agreement establishing the And ean Community includes among its objectives 
the formulation of a trade policy common to all th e member countries (see section (5)(ii)(a) below).  
However, since the Andean integration project is not  yet complete, Colombia's trade policy is largely 
decided at national level. 
13. The President of the Republic is empowered to regulate foreign trade, including customs and 
tariffs, although the regulation of tariff policy has been transferred in part to the Andean 
Community.19  In exercising his trade-related powers,  the President must apply the following 
principles, set by Congress:20 
 - Further the internationalization of Colomb ia's economy in order to step up and sustain 
the pace of development; 
 
 - promote and develop foreign trade in g oods, technology, services and, in particular, 
exports; 
  - encourage integration processes and bilate ral and multilateral trade agreements that 
expand and facilitate Colombia 's external transactions; 
 
 - further the modernization and efficien cy of local production to make it more 
competitive on international markets and en sure that it meets consumer needs; 
  - secure lawful and fair competition in lo cal production and provide it with adequate 
protection, particularly against unf air international trade practices; 
 
 - support and facilitate private initiative and transactions by the various economic 
agents in foreign trade operations; 
  - coordinate foreign trade policy and regula tions with tariff, monetary, exchange and 
fiscal policies;  and 
  - adopt as a temporary measure mechanisms allowing the economy to overcome any 
internal or external circumstances that ar e adverse to Colombia's trade interests. 
 
                                                                                                                                                                    
 
assigning law-making powers to the country's regional authorities.  Statutes regulate fundamental rights and 
duties of the individual and the procedures and remedies for protecting them;  the administration of justice, the 
organization and rules governing political parties and movements;  rules governing the opposition and electoral 
functions;  institutions and mechanisms for citizen participa tion;  states of emergency;  and electoral equality of 
candidates for the Presidency of the Republic who meet  the requirements established by law (Article 152). 
18 National Planning Department (2003). 
19 Article 189, Political Constitution of Colombia. 
20 Article 150, Political Constitution of Colombia and Article 2, Law No. 7 of 1991. Colombia WT/TPR/S/172/Rev.1 
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14. The government entity empowered to "direct, coordinate, formulate and evaluate" foreign 
trade policy is the Ministry of Trade, Industry and Tourism.21  In carrying out its trade-related 
functions, the Ministry of Trade, Industry and Tourism may convene the Higher Council for Foreign 
Trade, which advises the Government on matters relating to foreign trade policy.22  The Council is 
composed of the President of the Republic, the Minister of Trade, Industry and Tourism, the Minister 
of Foreign Affairs, the Minister of Finance and P ublic Credit, the Minister of Agriculture and Rural 
Development, the Minister of Mining and Energy, the Minister of Transport, the Minister of the 
Environment, Housing and Land Development,  th e Director of the National Planning Department, 
and the General Manager of the Bank of the Republic.23  The Higher Council for Foreign Trade may 
invite other officials to speak, but not vote, at its meetings. 
15. The Committee on Customs, Tariffs and Foreign Trade makes recommendations on the 
customs and tariff regimes.  Where they involve a change in trade policy, the Committee refers its 
recommendations to the Higher Council for Foreign Tr ade.  Other recommendations are sent directly 
to the Government.  The Committee is composed of  the Deputy Ministers of Foreign Trade, Finance 
and Public Credit;  Business Development;  Agri culture and Rural Devel opment;  and Mining and 
Energy, and the Deputy Director of the National Planning Department, the Director-General of 
Foreign Trade, the Director of Taxes and National Customs and the advisors of the Higher Council for 
Foreign Trade.24 
16. The private sector participates in trade polic y formulation through the Joint Committee on 
Foreign Trade, which may make recommendations on foreign trade to the Government.  Its members 
are the main trade associations and the Higher Council for Foreign Trade.25 
17. The Constitution of 1991 calls on the State to promote economic, social and political 
integration with other nations, particularly tho se of Latin America and the Caribbean, through the 
conclusion of the agreements involving the establishment of supranational bodies.26  Colombia has 
assigned high priority to the conclusion of prefer ential trade agreements in recent years.  The 
Colombian authorities state that they recognize and appreciate the importance of the multilateral 
trading system in securing predictability and secur ity for Colombia's trade policy, although they see 
Colombia's influence on the content and pace of the WTO negotiations as limited.27  The trade policy 
objectives set forth in the Strategic Export Plan 1999-2009 are to increase and diversify the export 
supply;  consolidate and boost foreign investment  as a means of promoting exports;  make export 
activities competitive;  step up export participation by  the country's various re gions;  and develop an 
export culture.28 
                                                      
21 Article 1, Decree No. 210 of 2003.  The Ministry of Foreign Trade merged with the Ministry of 
Economic Development in 2003 to form the Ministry of Trade, Industry and Tourism, which has a Vice-
Ministry of Foreign Trade and a Vice-Ministry of Business Development. 
22 Article 27, Decree No. 2553 of 1999. 
23 Article 28, Decree No. 2553 of 1999. 
24 Article 26, Decree No. 2553 of 1999. 
25 Government of Colombia (2003). 
26 Article 227. 
27 Deputy Minister of Foreign Trade (2004). 
28 The strategies for attaining these objectives can be viewed at:  http://www.mincomercio. 
gov.co/VBeContent/documentos/competitividad/encuentros/IX/data/libro2. WT/TPR/S/172/Rev.1 Trade Policy Review 
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(4) FOREIGN INVESTMENT REGIME  
(i) Introduction 
18. The Ministry of Trade, Industry and Tourism (M CIT) formulates forei gn investment policy.  
It does so in coordination with the Ministry of Finance and Public Credit, taking into account the 
guidelines of the Consejo Nacional de Polític a Económica y Social – CONPES (National Economic 
and Social Policy Council).29  CONPES is a Government advisory body for economic and social 
matters and is headed by the President of the Republ ic.  In January 2005, Proexport took over foreign 
investment promotion, formerly the responsibility of Coinvertir.30 
19. Consolidating and increasing foreign investment  is one of the objectives set by the Strategic 
Export Plan. 
20. The main legal provisions governing investment are Law No. 9 of 1991 and Decree No. 2080 
of 2000, which has been amended several times.31  In the Andean Community context, Colombia has 
adopted Decisions No. 291 and No. 292 (see (5)(ii)(a) below). 
21. The foreign investment regime covers direct and portfolio investment by natural or legal 
persons non-resident in Colombia.  The definiti on of investment includes foreign currency and 
tangible and intangible goods (including trademarks and patents), and the capitalization of resources 
in national currency with a right to outward remittance (including royalties payable under licensing contracts).
32  Loans and operations involving de bt do not constitute investment.33 
22. Colombia has an open foreign investment regime, although some foreign investors that took 
part in a survey by the United Nations Conferen ce on Trade and Development found that one of the 
main difficulties they faced in Colombia was a seve re lack of legal certainty caused by the frequent 
issuing of regulations and administrative decisions.34  According to the Colombian authorities, foreign 
investment rules are not amended very frequently;  and the amendments that  have been introduced 
provide foreign investors with better guarantees. 
(ii) Authorization and registration requirements 
23. For the most part, foreign investment requires no prior authorization.  Investment, whether 
domestic or foreign, in the finance, mining and hydrocarbons sectors does require prior authorization 
(Chapter IV(7)(3) and (4)). 
24. All foreign investment must be registered with  the Bank of the Republic.  Registration may be 
carried out either by the investor or by his repres entative.  The deadlines and conditions for registering 
a foreign investment vary according to the type of investment and the forma lities involved.  The Bank 
of the Republic automatically authorizes registrati on for investments meeting the provisions of Decree 
No. 2080 of 2000.35 
                                                      
29 Article 2, Decree No. 210 of 2003. 
30 Decree No. 4337 of 2004. 
31 Including Decrees No. 1844 of 2003, No. 4210 of 2004 and No. 1866 of 2005. 
32 Article 5, Decree No. 2080 of 2000. 
33 Article 3, Decree No. 2080 of 2000. 
34 UNCTAD (2006). 
35 Article 8(5), Decree No. 2080 of 2000. Colombia WT/TPR/S/172/Rev.1 
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(iii) Sectoral restrictions 
25. CONPES is empowered to "identify sectors of economic activity for the Government to 
determine whether participation therein by inv estment of foreign capital shall be allowed".36  
According to the Colombian authorities, C ONPES has never exercised this authority. 
26. Decree No. 2080 of 2000 allows investment of foreign capital in all sectors of the economy, 
other than in activities pertaining to national defe nce and security and the processing, disposal and 
elimination of toxic, hazardous or radioactive waste not produced in Colombia.37 
27. Foreign investment in companies providing open television services is subject to the principle 
of reciprocity and limited to 40 per cent of the company's share capital.38  Foreigners are not granted 
licences for the management of radio news or information programmes.39  Foreign geology 
consultancy firms may not offer their services in  Colombia unless they are associated with a 
Colombian firm.40 
28. Private investment, including foreign private inv estment, in the provision of public services in 
water supply and sewage, sanitation and the retail dist ribution of electricity and gas through mains is 
subject to restrictions insofar as the State estab lishes "exclusive service areas" in which only one 
company has permission to supply the service in question.41 
29. There are restrictions on the purchase of propert y by foreigners in border areas and coastal 
areas and on islands.42 
(iv) Protection 
30. The Constitution safeguards private property.  Article 58 allows expropriation by court 
decision and with prior compensation "in the public interest or on social grounds as defined by the 
lawmakers".  Article 59 stipulates that in the even t of war, the Government may order expropriation 
without prior compensation.  Immovable property expr opriated in a situation of war may be occupied 
only temporarily.  Before 1999, the Constituti on allowed Congress to expropriate without 
compensation "for reasons of equity ".  That authority was abolished by Legislative Act No. 1 of 1999.  
According to the authorities, there must always  be compensation, pursuant to the constitutional 
provision that "the State shall always be liable for expropriations carried out by the Government on its 
own or through its agents".43 
31. Decree No. 2080 of 2000 lays down for foreign vis itors a right of remittance abroad in freely 
convertible currency of the proceeds of their investment.44  Any changes in the conditions for 
remitting profits abroad and the reimbursement of a foreign investment may not be adverse to the 
investor unless Colombia's international reserves fall below three months' wages worth of imports.45  
                                                      
36 Paragraph of Article 6, Decree No. 2080 of 2000. 
37 Article 6. 
38 Article 34, Law No. 182 of 1995. 
39 Articles 7 and 15, Law No. 74 of 1996. 
40 Article 10(2), Law No. 9 of 1974. 
41 Article 4, Law No. 142 of 1994. 
42 Decree No. 1415 of 1990. 
43 Article 59, Political Constitution of Colombia. 
44 Article 10, Decree No. 2080 of 2000. 
45 Article 11, Decree No. 2080 of 2000. WT/TPR/S/172/Rev.1 Trade Policy Review 
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Foreign investment in the mining and hydrocarbons sectors is subject to a special exchange regime 
(Chapter IV(3) and (4)). 
32. Since 2005, Colombian or foreign investors making new investments or extending existing 
ones in an amount equal to or more than 7,500 monthly minimum wages (approximately 
US$1.35 million at March 2006) may sign a legal stability contract with the State.46  Under such 
contracts, the State guarantees that certain provisions , regardless of any amendment, will be applied to 
investors for a specified period.  The purpose of le gal stability contracts is to promote investment.47  
Foreign portfolio investments are not eligible for le gal stability contracts.  As at mid-2006, only one 
such contract had been signed. 
33. Legal stability contracts must indicate "expr essly and exhaustively" the provisions and 
administrative interpretations that the investor deem ed fundamental to its decision to invest and the 
application of which will be guarantee d for the duration of the contract.48  The contracts must be 
consistent with the Constitution and with internationa l treaties to which Colombia is a party.  They 
may not include provisions on the social security regime, taxes payable in states of emergency, 
indirect taxes, financial pruden tial regulations and the public services tariff regime.  Provisions found 
by the Colombian courts to be unconstitutional or unlawful are not protected by a legal stability 
contract even if they are part of it.  The term of legal stability contracts is from 3 to 20 years and 
investors pay an annual premium of 1 per cent of the amount invested under the contract. 
34. Since 1995, investors have also been able to take out tax stability contracts with the 
Government.49  The rate of the income tax, the ta x on occasional earnings and the remittance tax 
payable by investors opting for this regime is two percentage points higher than the tax rate applying 
at the time of concluding the contract (Chapter  III(4)(i)).  At mid-2006, Colombia had concluded 
some nine tax stability contracts.  According to th e authorities, legal stability contracts fulfil the same 
function as, and are an improvement on, tax stability contracts. 
(v) International investment agreements 
35. Under the General Agreement on Trade in Serv ices, Colombia has made commitments on 
service supply through commercial presence (Chapter IV(7)). 
36. Generally speaking, the provisions on investme nt in Andean Community Decision No. 291 
allow member countries a large measure of freedom in formulating investment policy.50  Although 
Decision No. 291 contains no MFN provisions, Andean Community Decision No. 439 requires members to grant to services and service providers from other member countries treatment no less 
favourable than that afforded to any other country  with respect to commercial presence and right of 
establishment (Chapter IV(7)).  Andean Communi ty Decision No. 292 sets forth the investment 
regime for Andean multinational companies. 
37. The free trade agreement between Colombia, Mexi co and Venezuela (Group of three, or G-3, 
agreement) contains a chapter on foreign investme nt granting a right of establishment to parties' 
investors and investments, with some exceptions.
51  Colombia entered a reservation concerning the 
                                                      
46 Law No. 963 of 2005. 
47 Article 1, Law No. 963 of 2005. 
48 Article 3, Law No. 963 of 2005. 
49 Article 169, Law No. 223 of 1995 and WTO (1996). 
50 Andean Community Decision No. 291 of 21 March 1991. 
51 Chapter XVII, Free Trad e Agreement between the United Mexican States, the Republic of Colombia 
and the Republic of Venezuela. Colombia WT/TPR/S/172/Rev.1 
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provisions on expropriation and compensation, in cluding the requirement that compensation for 
expropriation be equivalent to the "fair market value" of the investment at the time of the 
expropriation and that the compensation be paid promptly.52  The Colombian authorities have 
indicated that although the internal measures that gave rise to the reservation were changed in 1999, 
this fact has not been officially notified to the other party. 
38. Colombia has a bilateral investment agreem ent with Peru.  Another such agreement, 
concluded with Spain, is in the process of being ratified.  Colombia has completed negotiations for 
bilateral investment agreements with Switzerland and Guatemala.  At mid-2006, negotiations were 
under way with China, Finland, France, Japan and the United Kingdom.   
39. Colombia is a member of the Multilateral Inv estment Guarantee Agency of the World Bank 
and has ratified the Convention on the Settlement of Investment Disput es between States and 
Nationals of Other States, under which the Internatio nal Centre for Settlement of Investment Disputes 
was established. 
(5) INTERNATIONAL TRADE RELATIONS  
(i) WTO 
40. Colombia has been a Member of the WTO since 30 April 1995, the date of entry into force of 
Law No. 170 of 1994, whereby Congress ratified the Marrakesh Agreement.53  The Ministry of Trade, 
Industry and Tourism represents Colombia at the WTO. 
41. Colombia took part in the negotiations on telecommunications and financial services 
following the Uruguay Round.  Colombia's commitments  in telecommunications are contained in the 
Fourth Protocol annexed to the General Agreement on Trade in Services;  its commitments in 
financial services are set out in the Fifth Protocol.54  Colombia is an observer in the Committee on 
Government Procurement, which oversees impl ementation of the Plurilateral Agreement on 
Government Procurement.  Colombia is not a party to the Agreement on Information Technology. 
42. Colombia has submitted various notifications to the WTO (Table AII.1).  It has a very small 
number of notifications pending, including those pe rtaining to preferential agreements on trade in 
goods and services. 
43. Colombia has participated in 21 dis putes under the WTO Dispute Settlement Body 
(Table AII.2).  It has participated as a complainant in four disputes and as a defendant in one.  In the 
remaining disputes it was a third party. 
44. The only dispute in which Colombia took part as a defendant in the context of the WTO 
concerned a transitional safeguard measure that Co lombia applied to imports of plain polyester 
filaments.  The complaint, by Thailand, was that th e measure was inconsistent with the provisions of 
the Agreement on Textiles and Clothing.  The Te xtiles Monitoring Body twice recommended that 
                                                      
52 Annex to Article 17-08, Free Trade Agreement be tween the United Mexican St ates, the Republic of 
Colombia and the Republic of Venezuela. 
53 Law No. 170 of 1994, Official Journal No. 41.637 of 16 December 1994. 
54 WTO documents GATS/SC/20/Suppl.2 of 11  April 1997 and GATS/SC/20/Suppl.3 of 
26 February 1998.  The Fourth Protocol was ratified by means of Law No. 671 of 2001, in Official Journal 
No. 44.503 of 30 July 2001.  According to the Colo mbian authorities, the Fifth Protocol did not require 
ratification since it included no commitments other than those laid down in the General Agreement on Trade in Services. WT/TPR/S/172/Rev.1 Trade Policy Review 
Page 22 
 
 
Colombia abolish the measure.  In 1999, Thailand announced the withdrawal of its request for the 
establishment of a panel because the measure had been terminated. 
45. Since 1995, Colombia has submitted many contributions to the work of the WTO, several of 
them under the Doha Work Programme (Table AII.3). 
(ii) Preferential agreements 
(a) Andean Community 
46. Colombia is a member of the Andean Community, founded with the signing of the Cartagena 
Agreement in 1969.  The other members are Bolivia, Ecuador and Peru.  In April 2006, the Andean 
Community General Secretariat received notificati on of the decision by the Bolivarian Republic of 
Venezuela to denounce the Cartagena Agreement.55  At mid-2006, all the preferences granted by 
Venezuela to Colombia within the Andean Community remained in for ce until a date to be set.  In 
August 2006, the members of the Andean Community extended an invitation to Chile to become an 
associate member.56 
47. The task of defining "a Community strategy aimed at achieving deeper integration with the 
other regional economic blocs and political, social, economic and trade relati ons with extra-regional 
systems" has been entrusted to the Andean C ouncil of Ministers of Foreign Affairs and the 
Commission of the Andean Community.57  The Andean Community has developed common rules that 
affect trade relations not only among its members but also with non-member countries, mainly in 
areas such as customs, tariffs, agricultural health , technical regulations, contingency measures and 
intellectual property (Chapter II(2)). 
48. Two of the main goals pursued by the Andean  Community have been the establishment of a 
free trade area and the creation of a customs union.   A free trade area comprising Bolivia, Colombia, 
Ecuador and Venezuela has been  in existence since 1993 and covers the entire tariff universe 
(Chapter III(2)(iv)).  Peru became fully incorporated  in the free trade area in January 2006 after a 
gradual integration pro cess embarked on in 1997.58 
49. The customs union has yet to be finalized, sin ce the common external tariff, officially in 
effect since 1995, was adopted with certain exceptions by only four of the five member countries.59  
All five members agreed in October 2002 to a new co mmon external tariff, but its entry into force has 
been postponed several times.60  At the Sixteenth Andean Preside ntial Council at Lima, Peru, in mid-
2005, it was agreed that a common tariff policy would be adopted by 2 December 2005 at the latest.61  
According to the Colombian authorities, at May 2006  this objective had not yet been attained.  A 
                                                      
55 General Secretariat of the Andean Community, "G eneral Secretariat of CAN received official 
notification of Venezuela's withdr awal", 22 April 2006.  Viewed a t:  http://www.comunidadandina.org/ 
prensa/notas/np22-4-06a.htm. 
56 Andean Community General Secretariat inform ation online, "Official text of the Andean 
Community's letter of invitation to Chile".  Viewed at:  http://www.com unidadandina.org/ingles/documentos/ 
documents/carta_chile.htm. 
57 Article 51, Andean Subregional Integr ation Agreement (Cartagena Agreement). 
58 Andean Community Decision No. 414 of 30 July 1997. 
59 Wetter  (2001), page 65. 
60 Annex I to Andean Community Decision No. 535 of 14 October 2002. 
61 Minutes of the Lima Presidential Meeting, Democracy, Development and Social Cohesion , Sixteenth 
Andean Presidential Council, 18 July 2005.  Viewed at:  http://www.comunidadandina.org/ingles/documentos/ 
documents/Lima18-7-05.htm. Colombia WT/TPR/S/172/Rev.1 
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common market with free movement of servi ces, capital and persons, as well as of goods62, is 
likewise still pending. 
50. Oversight of compliance with Andean rules is the responsibility of the Court of Justice and 
the General Secretariat.  The latter may initiate  the preliminary phase of a "complaint of non-
compliance" either ex officio or following on from a claim by member countries of the Andean 
Community or by individuals.  The judicial phase of the proceedings is triggered by an application to the Court of Justice from the General Secretariat, member countries, or individuals.  The Court of 
Justice hands down a decision and may authori ze suspension of advantages under the Cartagena 
Agreement or order other coercive meas ures if its decision is not executed. 
51. Since 1996, 38 complaints of non-compliance have been filed against Colombia.  Fourteen of 
them have gone as far as the judicial phase (Table AII.4).
63 
52. Since trade policies are chiefly decided at th e national level, the members of the Andean 
Community adopted Decision No. 598 allowing them to negotiate trade agreements "individually" 
with third countries.64  In doing so, they must keep to the fo llowing guidelines:  "preserve the Andean 
legal system in relations between Andean Comm unity member countries;  take into account the 
commercial sensitivities of other Andean partners in the trade liberalization offers;  and maintain an 
adequate exchange of informati on and consultations in the cour se of the negotiations, within a 
framework of transparency and solidarity".65 
(iii) Partial scope agreements negotiated within LAIA66 
53. Within the Latin American Integration Associ ation (LAIA), Colombia has concluded partial 
scope agreements with Chile, Cuba, Mexico and Panama and with the member countries of the 
Caribbean Community (CARICOM), the Central American Common Market (CACM) and the Southern Common Market (MERCOSUR). 
54. The agreement between Colombia and 12 members of CARICOM, in force since 
January 1995 and expanded in 1998, provides for the elimination of tariffs applied by Colombia to 
1,128 subheadings.
67  Four of the 12 CARICOM signato ries (Barbados, Guyana, Jamaica and 
Trinidad and Tobago) eliminated tariffs on  products originating in Colombia, under 
1,074 subheadings.  The other signatories offer no preferences under the agreement. 
55. The agreement with Chile, in force since 1994,  establishes a tariff reduction programme under 
which both countries have abolished tariffs on  all traded goods with the exception of 
                                                      
62 Paragraph 8, Act of Cartagena, 27 May 1999. 
63 Andean Community General Secretariat (2006). 
64 Article 1, Andean Community Decision No. 598 of 11 July 2004. 
65 Article 2, Andean Community Decision No. 598 of 11 July 2004. 
66 The information on the number of headings included in the agreements in this section comes from:  
Ministry of Trade, Industry and Tourism, information online, "Integración Económica".  Viewed at:  http://www.mincomercio.gov.co/VBeContent/categorydetail.asp?idcategory=540&idcompany=5 [20 March 2006]. 
67 The 12 members of CARICOM that  signed the agreement with Colombia are: Antigua and Barbuda, 
Barbados, Belize, Dominica, Grenada, Guyana, Jamaica,  Montserrat, Saint Kitts and Nevis, Saint Lucia, 
Saint Vincent and the Grenadines, and Trinidad and Tobago.  Partial Scope Agreement on Trade and Economic 
and Technical Cooperation, between the Caribbean Community (CARICOM) and the Republic of Colombia 
AAP. A25TM No. 31 of 24 July 1994, incorporated in Colombian law by Decree No. 2891 of 1994 and Decree No. 797 of 1998. WT/TPR/S/172/Rev.1 Trade Policy Review 
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134 subheadings, which will enjo y duty-free treatment from 2007.68  Between 2007 and 2011, tariffs 
will be eliminated on a further 166 subheadings. 
56. The agreement with Cuba establishes tariff preferences for a very small number of products.69  
Colombia grants average tariff cuts of 50  per cent on 633 subheadings and Cuba, on 
1,020 subheadings.  The authorities say  that in August 2006, Colombia and Cuba agreed to deepen the 
agreement with a view to concluding a free trad e agreement that includ es disciplines in services, 
investment and dispute settlement. 
57. The agreements signed by Colombia with the members of the MCCA (Costa Rica, 
El Salvador, Guatemala, Honduras and Nicaragua) est ablish unilateral tariff preferences for a small 
number of products originating in the MCCA.70  Colombia and Honduras extended the scope of their 
agreement in 2001, granting tariff prefer ences for a small number of products.71 
58. The agreement between Colombia and Panama established reciprocal tariff preferences on a 
small number of products.  The preferences we re extended to a further 60 products in 2003.72 
59. The free trade agreement between Colombia, Me xico and Venezuela (G-3) was denounced by 
Venezuela in May 2006, but is still in force betw een Colombia and Mexico.  It includes a 10-year 
linear tariff reduction programme, under which tari ffs have been eliminated on trade between 
Colombia and Mexico since it came into force in 1995.73  Some goods, mainly agricultural, are not 
included in the tariff reduction programme.  In  2004, new conditions were negotiated for 
incorporation of the automotive sect or in the liberalization programme .  They entered into force in 
January 2006.  The Agreement has provisions on rul es of origin, contingency measures, sanitary and 
phytosanitary measures, technical standards, trade in services, investment, government procurement, 
intellectual property and dispute settlement. 
60. Colombia, together with Ecuador and Venezuel a, concluded a preferential trade agreement 
with the MERCOSUR countries in December 2003.74  It took effect between Colombia and 
                                                      
68 Economic Complementarity Agreement between Colombia and Chile for the establishment of an 
extended economic area, AAP.CE No. 24 of 6 Decembe r 1993, incorporated in  Colombian law by Decree 
No. 2717 of 1993, as amended by Decree No. 1741 of 1994 and extended by Decrees No. 2172 of 1995, 
No. 2181 of 1996, No. 2178 of 1997 and No. 617 of 2002. 
69 Economic Complementarity Agreement between th e Republic of Colombia and the Republic of 
Cuba, AAP.CE No. 49 of 15 September 2000, incorporated in Colombian law by Decree No. 580 of 2003. 
70 Partial Scope Agreement between the Republic of Colombia and the Republic of Costa Rica, 
AAP.A25TM No. 7 of 2 March 1984;  Partial Scope Agreement between the Republic of Colombia and the Republic of El Salvador, AAP.A25TM No. 8 of 24 May 1984;  Partial Scope Agreement between the Republic 
of Colombia and the Republic of Guatemala, AAP.A25TM No. 5 of 1 Ma rch 1984;  Partial Scope Agreement 
between the Republic of Colombia and the Republic of Honduras, AAP.A25TM No. 9 of 30 May 1984;  and Partial Scope Agreement between the Republic of Colomb ia and the Republic of Nicaragua, AAP.A25TM No. 6 
of 2 March 1984. 
71 First and Second Protocols amending AAP No. 9, incorporated in Colombian Law by Decree 
No. 1620 of 2001. 
72 Partial Scope Agreement under Article 25 of the Treaty of Montevideo of 1980, between the 
Republic of Colombia and the Republic of Panama, AAP.A25TM No. 29 of 9 June 1993, incorporated in 
Colombian Law by Decree No. 2781 of 1994 and First Protocol Amending AAP.A25TM No. 29 of 
28 April 2003, incorporated in Colombian Law by Decree No. 1845 of 2003. 
73 Economic Complementarity Agreement between the Republics of Colombia, Mexico and Venezuela, 
AAP.CE No. 33 of 13 June 1994, incorporated in Colombian Law by Law No. 172 of 1994 and Decrees 
No. 2900 and No. 2901 of 1994. 
74 AAP.CE No. 59 of 16 December 2003, incorporated in Colombian law by Decree No. 141 of 2005. Colombia WT/TPR/S/172/Rev.1 
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Argentina, Brazil and Uruguay in February 2005 and between Colombia and Paraguay on 
19 April 2005.  It includes tariff reduction schedul es negotiated between each of the parties, under 
which all trade from the MERCOSUR countries to Colomb ia will be duty free by 2018 at the latest.  
The Agreement contains no disciplines on trade in services but provides that "suitable mechanisms" 
for the liberalization of such trade to be established within a period set by the parties.75  T h e  
Agreement incorporates the tariff preferences laid down in the partial scope  agreements concluded 
previously between Colombia and the members of MERCOSUR. 
(iv) Other agreements and arrangements in force 
61. Under the Generalized System of Preferences (GSP) Colombia is a beneficiary of schemes 
established by Bulgaria, Canada, European Union,  Japan, New Zealand, Norway, Russia, Turkey, 
Switzerland and the United States.76  Some products which enjoy pa rtial tariff reductions under the 
European Union's SGSP General Arrangement, receiv e duty-free treatment when they originate in 
Colombia or the other countries included in the sp ecial arrangement to combat drug production and 
trafficking.77  These additional benefits expire on 31 December 2008. 
62. A vast number of products from Colombia e xported to the United States received duty-free 
treatment under the Andean Trade Preference Act in  ATPA.  The Andean Trade Promotion and Drug 
Eradication Act (ATPDEA) was enacted in 2002, extending the ATPA until 31 December 2006 and 
broadening the benefits thereof by affording duty-f ree treatment to imports of textiles and clothing, 
footwear, petroleum and petroleum derivatives, watches and clocks, leather goods, and vacuum-
packed tuna in flexible aluminium pouches of a weight not exceeding 6.8 kg.  A limited number of 
products, including certain textiles, articles of appare l, rum and canned tuna do not enjoy preferences.  
The United States is also maintaining its tariff quotas for imports of certain ag ricultural products.  The 
granting of preferences is contingent upo n a number of commercia l and non-commercial 
requirements.  Colombia has never forfeited any benefits under the ATPA for non-compliance with 
these requirements. 
63. Colombia, together with Argentina, Bolivia, Brazil, Chile, Cuba, Ecua dor, Mexico, Paraguay, 
Peru, Uruguay, and Venezuela, is party to th e Regional Agreement Relating to the Regional 
Preferential Tariff (PAR).  Concluded in 1984 unde r LAIA auspices the agreement provides for tariff 
preferences covering all trade among member count ries, with some exceptions.  The level of 
preferences granted by each member is determined according to its classification in one of the four country categories established in the agreement.  The scope of the agreement is limited owing to "the 
currently reduced coverage of the PAR, coupl ed with its extensive lists of exceptions".
78 
(v) Other trade agreements 
64. Colombia and the United States concluded ne gotiations on a free trade agreement in 
February 2006.  The agreement covers market acce ss, rules of origin, customs procedures, sanitary 
and phytosanitary measures, technical barriers to trade, trade protection, government procurement, 
investment, cross-border services, financial services, telecommunications, e-commerce, intellectual 
property, competition policy, labour aspects, environm ent, transparency and dispute settlement.  The 
agreement is awaiting signature and ratification by the Congresses of the two parties (June 2006).  
                                                      
75 Article 28, Annex I, AAP.CE No. 59. 
76 UNCTAD (2005a). 
77 Article 11, Regulation (EC) No. 980/2005 of 27 June 2005, and Commission Decision 2005/924/EC 
of 21 December 2005. 
78 LAIA (2002), page 12. WT/TPR/S/172/Rev.1 Trade Policy Review 
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The Colombian Minister of Trade sees the agreemen t with the United States as a "cornerstone" of 
Colombia's economic development.79 
65. Colombia, together with all other countries of the western hemisphere except Cuba, is taking 
part in the process to establish the Free Trade Ar ea of the Americas (FTAA), which began with the 
First Summit of the Americas held in Miami, USA, in 1994.  At mid-2006, the process was at a 
standstill. 
66. The Fifteenth Andean Presidential Council adopt ed directives to promote negotiation of a free 
trade agreement between the Andean Community  and the Central American Common Market.80  In 
early 2006, Colombia and Guatemala, El Salvador  and Honduras decided to start negotiations for a 
free trade agreement. 
67. In August 2002, the members of the Andean Comm unity and Canada agreed to start talks in 
order to explore the possibility of negotiating a free trade agreement.  At mid-2006, the talks had not 
progressed. 
68. The members of the Andean Community and th e European Union agreed to embark on a 
process leading to an association agreement, incl uding a free trade area, during the Third European 
Union-Latin America and Caribbean Summ it, held in Guadalajara, Mexico.81  The process began in 
January 2005 with a "joint assessment phase" of An dean integration.  In May 2006, a decision was 
taken to continue the clarifica tion and defining of the bases for negotiating an association agreement. 
                                                      
79 Government of Colombia, information online.  Viewed at:  http://www.tlc.gov.co/VBeContent/ 
TLC/NewsDetail.asp?ID=4887&IDCompany=37&Profile=[3 May 2006]. 
80 San Francisco de Quito Agreement, Annex on Presidential Dialogue, 12 July 2004. 
81 Joint Communiqué of the Troika Meeting of the European Union and the Heads of State and 
Government of the Andean Community, Guadalaj ara, Mexico, 29 May 2004.  Viewed at:  
http://www.comunidadandina.org/doc umentos/actas/dec29-5-04.htm.