Implementation of Free Trade Agreements and Seizing of Commercial Opportunities

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The general objective of this TC proposal is to maximize Colombia¿s ability to take advantage of the market access opportunities in the high-value added services sector provided by the trade and investment agreements adopted by the country in recent years. As a result of the new generation of free trade agreements subscribed by Colombia in recent years (with, for example, the United States, the European Union, EFTA, Canada, and Peru), the country needs to improve its regulatory framework and institutional capacity to implement those agreements adequately and to seize the opportunities offered by the liberalization of trade, particularly in key sectors where there is value-added, such as services. Moreover, in the global offshoring services market, competition from the region and Asian destinations is gravitating towards the increasingly lucrative higher value services space. While Colombia has a robust Business Process Outsourcing (BPO) sector, especially in voice-based process, it can tap further into the global outsourcing market by expanding its services portfolio and focusing on the faster growing segments of Knowledge Process Outsourcing (KPO) and Information Technology Outsourcing (ITO). According to the Bank¿s estimates Colombia¿s offshoring industry can be worth USD 1.75 billion by 2014, out of which USD 700 million could come from the KPO sector (including USD 500 million in pharmaceutical services). By focusing on the KPO sector and the Colombian Government¿s Programa de Transformacion Productiva within the Ministry of Commerce, Industry and Tourism, this TC seeks to support a loan operation (CO-L1094) aimed at both the development of innovative public policies to foster Colombia¿s competitiveness and the strengthening of its institutional capacity to seize the opportunities of the new trade agreements that boost the global services market. This loan is in direct alignment with the Bank¿s country strategy for Colombia: a) promotion and diversification of the exportable supply of offshoring global services in the segments of KPO, BPO and ITO; and b) strengthening of institutional technical capacity to implement and benefit from trade agreements (See, Chapter III, D, 3.15).