Find out about the current trade relationship and business potential between Canada and Colombia from Canada’s Trade Commissioner to Colombia, Claudio Ramirez.
Biz Latin Hub’s Chelsea Heywood had the pleasure of connecting with Claudio to gain his insights on the bilateral trade relationship, and what Colombia can offer Canadian businesses expanding into Latin America.
Claudio also shares his perspectives on the future of the relationship between these two countries and the Trade Commission‘s success in promoting Canada as an important partner for Colombia.
1. Could you tell us about your background with Global Affairs Canada, and what led you to take up the role as the Canadian Trade Commissioner in Colombia?
I joined the Canadian Foreign Service in 2001, mere weeks after 9/11, which plunged the world into a major crisis: that of global terrorism. At that time, just like in today’s crisis (the Covid-19 pandemic), political leaders were quick to recognize that an economic recovery would require more trade between nations, not less. Back then, some 160 members of the World Trade Organization came to an agreement to launch of the Doha Round, which aimed to lower trade barriers and to reform to trade rules in order to promote economic development.
Thus, from the outset of my career in the Canadian diplomatic corps, I have always been attracted by the profound impact that doing business across borders can have in bringing nations together and in building prosperity. At the Canadian Trade Commissioner Service, our team is spread across over 160 offices in Canada and worldwide with that single goal in mind: connecting people, ideas, and technologies to improve our collective well-being.
2. How would you describe current trade relations between Colombia and Canada?
Many adjectives come to mind: long-standing, robust, expanding, diversifying and mutually-beneficial. Our trade relations are anchored on a bilateral free trade agreement (FTA) that will celebrate its tenth anniversary next year, in 2021. When it came into force in 2011, Canada became the first G20 country that Colombia had an FTA with. That agreement eliminated tariff and non-tariff barriers that allowed smoothened and liberalised the exchange of goods and services between our two nations. Two-way trade has grown by over 30% over the last decade as a result. To this date, this is one of the most balanced FTA that Colombia has ever signed, generating strong results from both countries rather than a lopsided surplus or deficit for one side or the other.
The FTA also provided rules that protected intellectual property and foreign investment, which is a key reason why there are currently over 100 Canadian companies operating in Colombia across many sectors such as financial services (CIBC, Scotiabank), transportation (Air Canada, CAE, Bombardier), infrastructure (Hatch, EllisDon), agriculture and agri-food (Semex, McCain), education (Lasalle College International), life sciences (Pharmacielo, Khiron, Aphria), energy (Northland Power), oil and gas (Parex, Canacol, Frontera, Gran Tierra) and mining (B2Gold).
3. What are some distinctive opportunities Colombia can offer Canadian businesses looking to expand globally?
Colombia is situated in a strategic location. It is the entry point into South America, and like Canada it has access to both the Pacific and the Atlantic Oceans. Cartagena and Buenaventura are among the 20 largest ports in Latin America and the Caribbean, while the Bogotá airport is the largest for cargo in the region, ahead of Mexico City and São Paulo. This makes Colombia an ideal hub for logistics, warehousing and transportation. Canadian companies wishing to do business with South America can thus use Colombia as a base and then expand to other markets further afield such as Peru, Chile and Argentina.
Aside from its geography, demography is another big selling point for Colombia. With a population of over 50 million people, which includes a growing middle class, Colombia is the second largest Hispanic consumer market in the world after Mexico. Noteworthy as well, Colombians are young, educated, creative, and innovative. This skilled workforce is ideal for Canadian companies that want to open an office here and recruit talent locally.
Also worth noting are Colombia’s strong macroeconomic fundamentals. Latin America has been prone to boom and bust cycles, which has been unnerving for foreign investors looking for stability and long-term returns. Colombia’s economy, by contrast, has been robust and it has outperformed its regional peers over the past few decades, which is a reason why Canadian companies and Canadian institutional investors continue to find it so attractive.
In short, geography (strategic location), demography (large consumer base and talent) and the economy (stable and fast-growing) are what make Colombia unique for Canadian businesses.
4. What do you consider to be the biggest differences in terms of doing business between Colombia and Canada?
Culture and complexity.
Colombia is a diverse country with Latin, European, Afro-Caribbean and Indigenous flavours, accents and customs. Doing business in a large urban center like Bogotá and Medellín isn’t necessarily the same as in a rural area along the coast or in the depths of the Amazonian region. Understanding the many local cultures is thus critical to business success in this country. There is one common rule, however: building trust. In Canada, having the right product or service at the right price can often be enough to land you a business deal with a perfect stranger. Not necessarily so in Colombia. Canadian companies thus need to invest the time to develop personal relationships. Another important cultural difference is that Colombians are not as direct as Canadians. In Canada, for example, if you don’t want to close a business deal you politely decline the other party’s offer. In Colombia, people can be more reticent to say “no” because of the perceived negative impact this could have on the relationship between the parties, so instead, they will ask more questions to delay having to decline an offer or to hint at the fact that they’re not interested. Grasping these cultural nuances can save Canadian companies time and money.
Like any emerging market, Colombia is also a complex country when it comes to its regulatory environment and business climate. Opening a business in Canada only requires one step and two days. Rules are clear, transparent and their implementation thus predictable. In Colombia, in spite of significant improvements over the past few years to ease business processes, there is more red tape and a higher administrative burden than in Canada. But while things may not go as smoothly as in Canada, navigating this complexity can be very rewarding and well worth the effort.
5. How do you see the development of future relations between Colombia and Canada?
In spite of Covid-19, I remain very optimistic and even bullish about the future of commercial relations between our two countries. First, because the pandemic is reaffirming our shared belief that greater business internationalisation and trade diversification will be critical to economic recovery and to not only protecting jobs but also to creating new sources of employment for Canadians and Colombians alike.
Canada and Colombia are outward-facing countries, our economies are open and they depend heavily on bridges with the outside world to buy our exports and to bring foreign capital as well as tourists to our shores. This is why we concluded a trade agreement a decade ago, as I mentioned before, and why we’re currently negotiating a broader and more progressive trade agreement with the Pacific Alliance, which would allow Canada to create common rules with other key trading partners like Mexico, Peru and Chile. Noteworthy as well, Canada and Colombia are looking to expand our air transportation agreement in order to increase flights and boost people-to-people connections. Canadian tourism to Colombia is growing at a rapid pace, as are the number of Colombian visitors and students to Canada. This dynamism bodes well for the future of our ties.
Another element that benefits our bilateral trade is that both our countries are rich in natural resources. This makes us ideal partners in areas like renewable energy, hydrocarbons and mining. It’s no coincidence that Canada is the largest foreign investor in Colombia in these sectors.
6. What has been your greatest challenge and reward so far as Trade Commissioner?
One of the greatest challenges for any Trade Commissioner is coping with the depth and breadth of this country. Unlike many South American markets where the GDP and the industrial base are often concentrated in the capital, Colombia is a multi-polar country. My team and I are based at the Canadian Embassy in Bogotá, which can make it difficult to adequately cover other major business centres like Medellín, Cali, Barranquilla, Cartagena and Bucaramanga. Being constantly on the road or opening offices across Colombia can be very onerous however, so I am looking at ways that we can be more agile and tech-savvy as an organization, leveraging telework arrangements and videoconferencing tools that have become so in vogue and more and more mainstream because of Covid-19. This reality is one that any Canadian company wishing to do business in Colombia would face so I think that this is good advice for them too.
Being a Trade Commissioner for Canada in Colombia has been very rewarding. My team and I have made possible countless business deals and inter-institutional agreements between our two countries over the years. However, a couple of recent successes really stand out for me. One is Canada being invited to be the country guest of honour by the prestigious Teatro Mayor in Bogotá. The initiative has been affected by Covid-19 and will likely be postponed to 2021, but it is significant nonetheless because culture helps bring people and countries together like no other sector of our economy. Through the arts, we will be able showcase Canada’s talent and creativity, which are also the hallmark of our business community. From Cirque du Soleil to Shopify to Blackberry, including the telephone, insulin or the cardiac pacemaker, Canada is a country of innovators.
The other example I want to highlight are the contributions that Canadian companies in Colombia make every year as good corporate citizens, which as Trade Commissioner we promote enthusiastically. These companies support the local communities where they operate, such as building housing and early education centres in Meta, or by donating a new hospital wing in Bogotá for victims of serious burn injuries, as I have witnessed first-hand. They also co-invest with the Government of Canada in bilateral cooperation projects aimed at lifting people out of poverty. What these two examples have in common is that they demonstrate what Canada is about. When you’re a Trade Commissioner trying to get a business deal done, sometimes you win, other times you lose. But when you’re helping to advance values and principles, you always win, no matter the outcome.
Take advantage of strengthening trade connections between Canada and Colombia
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