WORLD  TRADE  
ORGANIZATION  RESTRICTED 
WT/TPR/S/265 
22 May 2012 
 
 (12-2661) 
Trade Policy Review Body  
  
 
   
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
COLOMBIA 
 
 
  
This report, prepared for the fourth Tr ade Policy Review of Colombia, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, 
as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from Colombia on its trade policies and practices.  Any technical questions arising from this report may be addressed to 
Mr. Angelo Silvy (tel. 022/739 5249) and Mrs Eugenia Lizano 
(tel. 022/739 6578).  Document WT/TPR/G/265 contains the policy statement submitted by Colombia. 
 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Colombia. Colombia WT/TPR/S/265 
 Page iii 
 
 
  CONTENTS 
 
  Page 
SUMMARY ix 
 (1)   INTRODUCTION  ix  
 (2)   ECONOMIC ENVIRONMENT  ix  
 (3)   TRADE AND INVESTMENT POLICY  x  
 (4)   TRADE POLICY BY MEASURE  x  
 (5)   TRADE POLICY BY SECTOR  xiii  
I.  ECONOMIC ENVIRONMENT 1  
 (1)   OVERVIEW  1 
 (2)   STRUCTURE OF THE ECONOMY , GROWTH AND EMPLOYMENT  2  
 (3)   FISCAL POLICY  5  
 (4) M ONETARY AND EXCHANGE RATE POLICY  11 
 (5) B ALANCE OF PAYMENTS  14 
 (6)   TRADE AND INVESTMENT FLOWS  16  
 (i)  Developments in the trade in goods 16  
 (ii)  Trade in services 20  
 (iii)  Foreign direct investment 20  
II.  TRADE AND INVESTMENT REGIME 23  
 (1)   OVERVIEW  23 
 (2) T RADE POLICY FORMULATION AND IMPLEMENTATION  23 
 (i)  Institutional and legal framework 23  
 (ii) Trade policy formulation and objectives 25 
 (3) I NTERNATIONAL TRADE RELATIONS  26 
 (i)  WTO 26  
 (ii)  Regional trade agreements 29  
 (iii)  Other agreements and preferences in force 32  
 (iv)  Trade agreements signed and under negotiation 34  
 (4)   INVESTMENT REGIME  34  
III.  TRADE POLICIES BY MEASURE 38  
 (1)   OVERVIEW  38 
 (2)   MEASURES AFFECTING IMPORTS  39  
 (i)  Customs documentation and procedures 39  
 (ii)  Customs valuation 41  
 (iii)  Rules of origin 44  
 (iv)  Tariffs 47  
 (v)  Other charges on imports 57  
 (vi)  Import prohibitions 61  
 (vii)  Licences, registration and other requirements 61  
 (viii)  Anti-dumping, countervailing and safeguard measures 66  
 WT/TPR/S/265 Trade Policy Review 
Page iv 
  
     Page 
 
 (ix)  Standards and technical regulations 69  
 (x)  Sanitary and phytosanitary measures 75  
 (3)   MEASURES AFFECTING EXPORTS  82  
 (i)  Registration, documentation and export licences 82  
 (ii)  Other charges and minimum prices 84  
 (iii)  Export restrictions 85  
 (iv)  Support for exports 86  
 (v)  Financing, insurance and guarantees 95  
 (vi)  Export promotion and marketing assistance 97  
 (4)   MEASURES AFFECTING PRODUCTION AND TRADE  97  
 (i)  Competition policy 97  
 (ii)  Price controls 102  
 (iii)  State trading, State-owned ente rprises and privatization 103  
 (iv)  Incentives 104  
 (v)  Government procurement 110  
 (vi)  Intellectual property rights 116  
 
IV.  TRADE POLICIES BY SECTOR 127  
 (1) O VERVIEW  127 
 (2)   AGRICULTURE  128  
 (i)  Measures at the border 130  
 (ii)  Domestic support and subsidies 133  
 (iii)  Financing and insurance 136  
 (3)   MINING (INCLUDING HYDROCARBONS ) 139  
 (i)  Mining 139  
 (ii)  Hydrocarbons (including petroleum products) 141  
 (4)   ELECTRICITY  144  
 (5) M ANUFACTURES  148 
 (6)   SERVICES  150 
 (i)  Financial services 150  
 (ii)  Telecommunications 164  
 (iii)  Air transport and airports 170  
 (iv)  Maritime transport and ports 177  
 (v)  Tourism 182  
 
REFERENCES 187 
 
APPENDIX TABLES 193 Colombia WT/TPR/S/265 
 Page v 
 
 
  CHARTS 
 
  Page 
I. ECONOMIC ENVIRONMENT 
I.1 Trade in goods by product, 2005 and 2011 18 
I.2 Trade in goods by trading partner, 2005 and 2011 19 
III. TRADE POLICIES BY MEASURE 
III.1 Frequency distribution of MFN tariff rates, 2006, 2010 and 2011 49 
TABLES 
I. ECONOMIC ENVIRONMENT 
I.1 Basic economic indicators, 2005-2011 2 
I.2 Structure of GDP by expenditure, 2005-2011 3 
I.3 Central Government finances, 2005-2011 5 I.4 Main monetary indicators, 2005-2011 13 
I.5 Balance of payments, 2005 2011 15 
I.6 Trade in services, 2005-2011 20 I.7 Net foreign direct investment by economic sector, 2005-2011 21 
I.8 Net foreign direct investment by country of origin, 2005-2011 21 
II. TRADE AND INVESTMENT REGIME II.1 Institutions responsible for formulating and applying trade policy 25 
II.2 Principal notifications submitted pursuant to the WTO Agreements, 
1 January 2006-29 February 2012 27 
II.3 Situation regarding dispute settlement cases, 1 January 2006-29 February 2012 29 
II.4 Prohibitions and restrictions on foreign investment 35 
III. TRADE POLICIES BY MEASURE III.1 Estimated and indicative prices 42 
III.2 Rules of origin criteria 45 
III.3 MFN tariff structure, 2006, 2010 and 2011 47 III.4 Summary analysis of the MFN tariff, 2006, 2010 and 2011 50 
III.5 Tariff quotas, 2010-2011 52 
III.6 Preferential agricultural quotas, 2006-2011 53 
III.7 Summary of preferential tariffs, August 2011 55 
III.8 Other VAT rates 57 
III.9 VAT-exempt imports 59 
III.10 Consumption tax, 2007 and 2011 60 
III.11 Global tax on petrol (gasoline) and fuel oils for motors, 2006 and 2011 61 III.12 Non-automa tic licences 63 
III.13 Criteria for approving, postponing, refusing and amending the quantity of a 
non-automatic (prior) licence 65 
III.14 Anti-dumping measures in force, 2006-2011 67 
III.15 Legal framework for standards and technical regulations 70 
III.16 Procedure for preparing and issuing technical regulations 72 III.17 SPS notifications to the WTO, 2006-2011 77 
III.18 Subject matter of the main notifications relating to livestock and plants 78 WT/TPR/S/265 Trade Policy Review 
Page vi 
  
    Page 
III.19 Export procedures 84 
III.20 Requirements applicable to free zone users 88 
III.21 Main requirements applicable to industrial users of permanent free zones 89 III.22 Specific benefits for free zone users 90 
III.23 Export financing arrangements 96 
III.24 Business integration operations notified to the SIC, 2006-2011 101 III.25 Activities of the SIC, 2006-2011 102 
III.26 Loans granted by Bancoldex, by sector, 2006 and 2011 105 
III.27 FINAGRO terms of credit 106 III.28 Definition of MiSMEs 107 
III.29 Sources of government financing for MiSMEs 108 
III.30 Legislative framework for government procurement 112 III.31 Contractor selection procedures, 2011 113 
III.32 Participation in intellectual property treaties 116 
III.33 Legislation on intellectual property 117 III.34 Overview of intellectual property rights, 2011 124 
IV. TRADE POLICIES BY SECTOR 
IV.1 Principal indicators for agriculture, 2005-2011 129 
IV.2 Agricultural tariff quotas 132 
IV.3 Incentives granted by MADR 135 IV.4 Agricultural sector 139 
IV.5 New legislation on hydrocarbons and gas, 2006-2011 143 
IV.6 Structure of the financ ial sector, December 2011 151 
IV.7 Minimum capital requirements for entities subject to SFC control and 
oversight, 2006-2011 153 
IV.8 Principal legislation governing banking and securities activities 156 IV.9 Return on assets and return on equity of supervised institutions and 
managed funds, 2010, 2011 160 
IV.10 Trend in the net loans portfolio and receipt of deposits in the commercial 
banking sector, 2006-2011 161 
IV.11 Principal laws regulating insurance activities 162 
IV.12 Total premiums per branch, 2006-2011 164 IV.13 Investment in the telecommunications sector, 2005-2011 164 
IV.14 Subsidies in the telecomm unications sector since 2006 167 
IV.15 Telecommunications indicators, 2006-2011 169 IV.16 Mergers and acquisitions in the air transport market, 2009-2010 173 
IV.17 Port traffic, 2007-2010 182 
APPENDIX TABLES 
I. ECONOMIC ENVIRONMENT 
AI.1 Merchandise exports (f.o.b.) by product, 2005-2011 195 
AI.2 Merchandise imports (c.i.f.) by product, 2005-2011 197 
AI.3 Merchandise exports (f.o.b.) by trading partner, 2005-2011 199 
AI.4 Merchandise imports (c.i.f.) by trading partner, 2005-2011 200 
II. TRADE AND INVESTMENT REGIME 
AII.1 Overview of free trade agreements, 1 January 2006-12 March 2012 201 
 Colombia WT/TPR/S/265 
 Page vii 
 
 
    Page 
III. TRADE POLICIES BY MEASURE 
AIII.1 Import modalities and other regimes 204 
AIII.2 Main SPS measures in force 206 AIII.3 State-owned enterprises 212 
IV. TRADE POLICIES BY SECTOR 
AIV.1 Air transport agreement modalities, 1974-2012 214
 
 Colombia WT/TPR/S/265 
 Page ix 
 
 
  SUMMARY 
 
(1) INTRODUCTION  
1. Since the last Trade Policy Review conducted in  2006, Colombia has continued steering its 
trade policy towards greater openness, setting its sigh ts on closer integration with Latin America and 
the Caribbean, as well as with the rest of the world,  through the negotiation of preferential agreements 
to increase external trade and foreign investment flow s.  To this end, Colombia has participated in 
various negotiations to consolidate existing bila teral and regional agreem ents, and has signed and 
continues actively negotiating new agreements wi th the aim of ensuring preferential access to 
strategic markets.  This does not detract from the particular importance that Colombia attaches to 
participation in the WTO as part of its trade policy strategy.  Colombia therefore places great 
emphasis on maintaining an open trade regime in th e framework of a transparent multilateral system 
complemented by regional and bilateral efforts. 
2. Colombia has a substantially open trade regi me, with an average tariff which declined 
considerably during the period under review.  Alt hough the general trend is towards greater openness 
and reduced obstacles to foreign trade, some non-tariff restrictions remain in place, mainly related to 
registration and import licensing requirements.  The trade regime is also somewhat complex, owing to the large number of regulations. 
(2) E
CONOMIC ENVIRONMENT  
3. During the period under review, Colombia's GDP gr ew at an annual average rate of 4.8 per 
cent.  Economic growth picked up speed betwee n 2005 and 2007, but the global financial crisis 
caused a loss of momentum in 2008 and 2009.  Howe ver, given the combination of countercyclical 
policies and the strong performance of some export pr oducts, Colombia did not fall into recession and 
the economy rebounded again, reaching 4 per cent growth in 2010 and 5.9 per cent in 2011. 
4. As a result of solid economic performance, per capita GDP grew rapidly, from US$3,417 
in 2005 to US$7,236 in 2011.  Despite this impr ovement, poverty levels, a lthough they have reduced, 
remain high and there is a continued lack of equity  in income distribution.  In addition, despite 
trending downwards, the unemployment rate  in 2011 was still some 9.8 per cent. 
5. During the financial crisis, Colombia used  fiscal policy as an instrument to boost 
medium-term growth and reduce unemployment, and th is led to an increase, albeit a modest one, in 
expenditure and fiscal deficit levels.  At the sa me time, however, Colombia has committed itself to 
maintaining fiscal discipline, a commitment enshrine d in the Constitution.  Accordingly, 2011 saw the 
introduction of a fiscal regulation to enhance public sector discipline and a reform of the system of 
royalties to improve their management and distributi on.  This countercyclical fiscal policy was also 
accompanied by an expansive monetary policy, resulti ng in a sharp decline in the intervention interest 
rate between late 2008 and mid-2010.  With the rise in  inflation in 2011, however, a contractionary 
monetary policy was adopted. 
6. Colombia maintains a floating exchange rate.  During the period under review and partly 
because of substantial capital inflows into Colombia, a real appreciation of the peso took place which, 
while lowering the cost of imports, made exports less competitive.  To address that situation, the Bank 
of the Republic intervened repeatedly on the exch ange markets and adopted measures to deal with 
exchange-rate pressures. WT/TPR/S/265 Trade Policy Review 
Page x 
  
  7. International trade in goods and services in the review period showed dynamic growth:  
imports, in US dollar terms, increased at an a nnual average rate of 17.1 per cent between 2005 and 
2011, and exports at an annual average rate of 17.9 per cent, with both indices practically doubling 
during the period.  Colombia's trade is relatively co ncentrated, both geographically and in terms of 
export products.  The United States continues to be  the main market for Colombian goods and mining 
products accounted for approximately 65 pe r cent of Colombian exports in 2011. 
8. Colombia's current account balance has traditiona lly been in deficit, owing to the negative 
balances in income and services.  Nevertheless, the balance of trade in goods remained in surplus for 
most of the period under review, and more pa rticularly as from 2008, because of strong export 
growth.  Colombia has also benefited from im proved terms of trade a nd strong demand for raw 
materials.  The continuous increase in investment flows has also played a major role and reflects 
greater investor confidence in the country. 
(3) TRADE AND INVESTMENT POLICY  
9. During the period under review, Colombia's trade policy focused mainly on the negotiation of 
preferential agreements.  The Trade Promotion Agre ement between Colombia and the United States, 
signed in November 2006, was incorporated in Co lombian legislation in 2007 and approved by the 
United States Congress in 2011;  it is currently at th e stage of implementation.  Nevertheless, as a 
founding Member of the WTO, Colombia recognizes the importance of having a multilateral trading 
system with clear and transparent rules that support the integration of developing countries into the global economy.  Colombia supported the swift and balanced conclusion of the Doha Development 
Agenda, which it considers necessary in order to achieve more open, undistorted markets and to 
strengthen the multilateral system.  Colombia conti nues to have observer status in the Committee on 
Government Procurement and recently acceded to the Information Technology Agreement. 
10. Colombia grants national treatment to foreign investment in all but a few sectors where it 
maintains limitations or prohibitions.  In addition,  the State may determine that only one enterprise 
may exclusively provide services in a particular sector for a specified period of time.  No prior 
authorization is required for foreign investment , subject to some exceptions (financing in the 
hydrocarbons and mining sectors, and portfolio investment);  such investment must be registered with the Bank of the Republic in order to make it possible for earnings to be repatriated and/or reinvested.  
Both domestic and foreign direct investors may sign a legal stability contract with the State, which 
guarantees that, for the duration of the contract, ther e will be no change in the legal rules under which 
the investment was made. 
(4) T
RADE POLICY BY MEASURE  
11. Colombia has a substantially open trade re gime, and the average tariff rate has been 
decreasing.  Some non-tariff restrictions still rema in in place, however, mainly related to import 
registration and licensing requirements.  The regime is also somewhat complex on account of the 
large number of regulations. 
12. During the review period, Colombia simplified its customs and administrative procedures by 
establishing a single window for imports and exports and a system of risk analysis, which has reduced the frequency of inspection.  But further efforts are needed to facilitate trade, including the improved 
functioning of the single window.  Colombia con tinues to use reference prices as parameters for 
checking the value reported by importers during the customs inspection process. Colombia WT/TPR/S/265 
 Page xi 
 
 
  13. Since its last review, Colombia has considerably reduced tariff protection.  It has 
implemented a tariff reform aimed at reducing th e levels and dispersion of tariffs, which also 
addresses the anti-export bias manifest in the Colombian tariff.  As a result of this reform, the average 
tariff has fallen to 6.2 per cent, compared with 12  per cent in 2006.  Apart from tariff reductions 
effected in late 2010 and early 2011, in August 2011 Colombia lowered its applied tariffs on a large 
number of products (mainly industrial inputs and capita l goods) for a period of 12 months.  In general, 
the tariffs applied by Colombia are ad valorem .  Colombia continues to use the Andean Price Band 
System (SAFP) to apply import duties on a number of agricultural products;  the duties vary according to the international prices of the products concerned. 
14. Imports are also subject, as a rule, to value added tax (VAT).  Both domestic and imported 
products attract VAT which is applied at the same rates in both cases.  However, certain imports not 
produced in Colombia are exempted or excluded fro m the payment of VAT.  In order for an importer 
to be eligible for VAT exemption, the Ministry  of Commerce, Industry and Tourism (MCIT) must 
certify, prior to import, that the product to be imported is not produced domestically.  A consumption tax is also applied to some imported and domest ic products.  The various  import procedures or 
customs regimes and the different export promo tion programmes provide, under certain conditions, 
for relief from the payment of customs duties a nd other taxes applicable to goods imports. 
15. As regards non-tariff measures, Colombia prohi bits imports of certain  goods on grounds of 
public health or morality, as well as to protect the e nvironment or national security and to meet the 
commitments contained in international agreements to  which it is a signatory.  Colombia also applies 
an automatic ("free import") and non-automatic ("pr ior licence") licensing system.  During the period 
under review, the import licensing system, as notified to the WTO by Colombia, underwent no substantial changes.  The number of tariff lines s ubject to automatic and non-automatic licensing has 
increased since 2006 due to a change in the tariff cl assification in the case of automatic licensing, and 
in the case of non-automatic licensing to the f act that, as from 2010, a non-automatic licence is 
required to import certain precursors fo r the production of narcotic drugs. 
16. Colombia continued having recourse to anti-dumping measures during the period reviewed.  
Between 2006 and 2011, Colombia init iated 25 anti-dumping (AD) inves tigations and applied ten new 
definitive measures;  provisional measures were impo sed in 13 of the 25 investigations initiated.  
Most of the measures were applied in 2007.  As at 31 December 2011, Colombia had 12 AD measures 
in force, all of which were applied to imports from China.  In the same period, no countervailing or 
safeguard measures were applied and no related investigations were initiated. 
17. The task of preparing technical regulations is  not centralized in a specific body;  such 
regulations may emanate from the standardization institute ICONTEC, or from ministries, regulatory 
commissions and decentralized bodies.  Although each entity has its own internal procedure for the 
establishment of technical regulations, since 2009 a procedure for elaborating and issuing them has 
been agreed, on the basis of good practice recommendations.  Most technical regulations reflect or are 
based on international standards.  During the pe riod 2006-2011, Colombia made 207 notifications to 
the WTO Central Registry, including notificati ons of draft technical regulations and their 
implementation, amendment or rejection.  Important changes have taken place in the accreditation process since the last review.  The responsibility fo r formulating policy on sanitary and phytosanitary 
(SPS) measures in Colombia is shared by vari ous ministries.  The SPS system operates on the 
principle of the harmonization of policy in the different sectors.  SPS measures are adopted by the 
body responsible for risk asse ssment, where appropriate. WT/TPR/S/265 Trade Policy Review 
Page xii 
  
  18. Export freedom is the general rule in Colomb ia, subject to the limitations or prohibitions 
established by laws or internati onal agreements in force.  However, the Government may issue 
standards to regulate trade, so as to enable th e economy to overcome any external or internal 
circumstances that are adverse to Colombia's trad e interests.  Consequently, during the period under 
review, Colombia applied temporary quotas for expor ts of cattle (female) on the hoof in order to 
guarantee national herd replenishment and thereby im prove the exportable supply of meat and meat 
products.  Colombia maintains special charges on th e exportation of certain pr oducts (including mild 
coffee, unset emeralds and coal) to finance development funds. 
19. Colombia continues to run a number of export support and promotion programmes.  The free 
zone programme was reviewed to bring it into line with the provisions of the Agreement on Subsidies 
and Countervailing Measures (SCM Agreement).  The new regime is designed to promote the production of goods and services inte nded primarily, but not exclusively or necessarily, for foreign 
markets.  Exporters of goods and services are also elig ible for the total or partial refund of indirect 
taxes, charges and contributions through applicatio ns for the tax reimbursement certificate (CERT).  
In addition, exporters may be eligible for othe r export support and promotion programmes such as the 
special export programmes (PEX) and the Vallejo Plan. 
20. In 2009, with a view to updating the rules on protection of competition, Colombia adopted a 
new law on the subject.  The Supervisory Authority for Industry and Trade (SIC), which was restructured in 2011, is now the National Authority for the Protection of Competition;  its function is 
to conduct investigations, impose fines and adopt other decisions concerning infringements of the 
competition protection regulations.  During the period  reviewed, the SIC made considerable progress 
with regard to the average duration of the inv estigation and decision-making process.  The Special 
Administrative Unit for Civil Aviation (air transp ort) and the Financial Supervisory Authority 
currently deal only with business me rgers in their respective sectors.   There is a special competition 
regime for the agricultural sector, considered a sect or of basic importance to the economy, in which 
some anti-competitive agreements are therefore a llowed for stabilization purposes.  Similarly, the 
following are exempted from the application of th e competition law:  price stabilization funds, 
parafiscal funds for agricultural development,  establishment of minimum guaranteed prices, 
regulation of domestic markets for agricultural prod ucts, supply chain agreements in the agricultural 
sector and the agricultural safeguard regime. 
21. Colombia continues using fiscal incentives as an instrument to promote national and foreign 
investment, as well as other support programmes to pr omote development in specific sectors and to 
contribute to social and political equality.  Colomb ia has observer status in the context of the 
Plurilateral Agreement on Governme nt Procurement.  During the period under review, Colombia 
strengthened the legal and institutional framework fo r government procurement, particularly for the 
purpose of increasing transparency, through the introduc tion, in 2007, of legal changes in the public 
procurement regime.  However, procurement is also  used as a tool to boost domestic industry and 
employment, mainly through the use of preferences. 
22. During the period under review, Colombia made no important changes to the legal framework 
of its intellectual property protection regime;  cha nges were, however, made in the regulatory area to 
facilitate formalities through automation and, at the institutional level, through the establishment of 
the Intersectoral Commission on Intellectual Property (C IPI), with a view to coordinating the policies, 
activities and programmes of public and private in stitutions relating to intellectual property. Colombia WT/TPR/S/265 
 Page xiii 
 
 
  (5) TRADE POLICY BY SECTOR  
23. The period under review saw th e introduction of some changes in the sectoral composition of 
the Colombian economy.  The mining sector substan tially increased its share of GDP, from 6.3 per 
cent in 2005 to 10.3 per cent in 2011.  This was due  partly to increased oil and coal production and the 
rise in international prices.  The share of th e agricultural and manufacturing sectors contracted, 
reflecting a relative increase which, though solid, was less pronounced than for the more dynamic 
sectors of the economy.  The contribution of financia l and real estate services to GDP declined only 
slightly in spite of the financial crisis, while the share of the construction sector increased, partly under the impetus of increased public spending. 
24. The agricultural sector is of key importance to the Colombian economy on account of its 
contribution to GDP, employment and exports.  The current focus of agricultural policy is on 
promoting development in rural areas, increasi ng competiveness and market diversification.  
Colombian agricultural policy is also aimed, albeit not explicitly, at contributing to food security.  
Agricultural products (WTO definition)  have a higher tariff protection level (14.5 per cent) than other 
sectors such as manufacturing (4.9 per cent), and this  has been accentuated by the recent tariff 
reduction.  The agricultural sector also benefits  from programmes of domestic support, preferential 
access to credit and debt refinancing programmes,  subsidization of agricultural insurance and 
mitigation of exchange rate risk.  Colombia also uses other mechanisms to help producers cope with 
fluctuating world prices, such as price stabilization funds. 
25. Colombia's mining policy is geared to guara nteeing supplies of hydrocarbons and electric 
power, and to generating the resources needed to promote national development.  Colombia grants 
national treatment to foreign investment in the mining and hydrocarbons sectors, as well as in other sectors.  Foreign enterprises must establish a subsidia ry domiciled in Colombia in order to be granted 
exploration concessions.  In the hydrocarbons sector , a significant earner of foreign exchange, the 
State-owned company ECOPETROL S.A. continues to play a predominant role in the extraction, refining, trade, distribution and transportation of petroleum and petroleum products.  Colombia 
continues to grant a sales subsidy on fuel in the domestic market, which, despite having been 
reformed, still represents a substantial fiscal burden.   Private sector participation in the electricity 
sector accounts for 45 per cent of total generation.  Although the State retains a major stake in the 
sector, reforms have been introduced to promote the functioning of market mechanisms.  Thus, during 
the period under review, Colombia established the Wholesale Electricity Market as an entity 
responsible for granting concessions for electricity  generation, interconnec tion and transmission 
networks between regions.  The Wholesale Electricity  Market has also been used for the adoption of 
mechanisms to address possible electricity shortages.  A subsidy regime is applied to residential users 
in the most vulnerable sections of society, in accordance with the level of core or subsistence 
consumption. 
26. The manufacturing sector's contribution to GDP  declined during the period under review, 
albeit largely as a result of the accelerated growth of mining.  The authorities are seeking to implement a Productive Transformation Programme, by identifying and developing emerging sectors 
and defining a new industrial strategy structured around sectoral committees.  The aim is to promote 
the development of human capital and improve mana gement and infrastructure, as well as to attract 
greater foreign investment and to formalize the activities of the informal sector. 
27. Services accounted for some two thirds of Co lombian GDP in 2011.  The main contributors 
were financial and trade services.  Colombia is a net importer of services.  However, both imports and 
exports grew during the period under review. WT/TPR/S/265 Trade Policy Review 
Page xiv 
  
  28. The Constitution characterizes financial, stock exchange and insurance activities as being in 
the public interest;  these activities can therefore only be exercised with prior State authorization.  The 
financial sector is open to foreign investment a nd there are no legal limitations on foreign capital 
holdings in commercial banks or insurance companies.   Nevertheless, special authorization is required 
to take out insurance with companies domiciled ab road.  During the review period, the financial 
institutions' prudential indicators remain sound, on account of the reforms introduced in the regulatory 
framework and in prudential criteria.  Colombia sat isfactorily weathered the global financial crisis of 
2008 and 2009 through increased surveillance and the application of specific measures to increase 
reserves in order to meet any deteriorati on in the financial status of institutions. 
29. Foreign companies are required to establish a subs idiary in Colombia in order to operate in 
the national telecommunications market.  In 2009,  Colombia introduced a new law to promote 
investment in the sector, which established a gene ral approval regime and abolished the subsidy 
regime for low-income populations, subject to a tr ansition period.  Suppliers of telecommunications 
services are allowed to set their tariffs freely, ex cept in cases where competition is deemed inadequate 
or where the quality or supply of services is not accep table.  However, some tariffs are monitored and 
a tariff ceiling is currently imposed on calls from fixed to mobile telephones. 
30. Air transport policy is aimed at providing flexible market access in order to promote 
competition.  Air cabotage services are the preser ve of Colombian aircraft, and a nationality 
requirement is applied, whereby 90 per cent of the staff employed by Colombian airlines and 
agencies/subsidiaries of foreign airlines established in  Colombia must be Colombian nationals.  This 
restriction is applied on a basis of reciprocity.  Airports are operated under a concession regime or by 
the departments/municipalities where they are located. 
31. Access to the maritime transport market is based on the principle of reciprocity.  In the area of 
maritime transport, cabotage is re served for Colombian-flagged ships,  although the chartering/hire of 
a foreign-flagged ship may be authorized if no Co lombian vessels are available or suitable for the 
purpose.  The captain, officers and 80 per cent of the crew on ships registered in Colombia must be 
Colombians.  International maritime transport and cabotage companies set their own tariffs and 
freight rates but must notify them to the authorities,  which may review them and raise objections.  The 
construction, maintenance and admi nistration of ports are entrusted to port companies under a 20-year 
concession regime. 
32. The provision of certain types of tourism servi ces is subject to registration requirements.  
Providers of certain tourist services must pay a para fiscal contribution for the promotion of tourism, 
which has also been applied to commercial centres since 2011.  A ra nge of incentives are offered for 
investment in the sector, mainly for the renovatio n or construction of hotels and the provision of 
ecotourism services.