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Free Trade Agreements Between Peru, Colombia, and the United States

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  • Monica P. Lombana

Abstract

This article evaluates the process of negotiating and implementing the U.S.‐Peru and U.S.‐Colombia free trade agreements (FTAs) and analyzes the impact of these agreements on foreign direct investment (FDI) and export diversification in Peru and Colombia. The main finding is that institutional elements in each country uniquely impacted the process of negotiation, implementation, and the outcomes of these FTAs. Colombia benefited from the initial advantage of better institutional capacity and negotiating expertise, while Peru benefited from stronger political leadership and commitment to a bilateral trade agreement with the United States. Both Peru and Colombia have benefited from structured consultation mechanisms with the private sector and non‐government agents, continuity in trade policies throughout different political administrations, and strong political commitment to develop the institutional capacity needed to take full advantage of these FTAs. Furthermore, the implementation of these FTAs has coincided with an expansion of non‐traditional exports from Peru and Colombia, and an increase in FDI into sectors other than commodities such as oil, natural gas, and minerals.

Suggested Citation

  • Monica P. Lombana, 2020. "Free Trade Agreements Between Peru, Colombia, and the United States," American Journal of Economics and Sociology, Wiley Blackwell, vol. 79(1), pages 199-232, January.
    • Handle: RePEc:bla:ajecsc:v:79:y:2020:i:1:p:199-232
    DOI: 10.1111/ajes.12312
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    References listed on IDEAS

    as
    1. Atish R. Ghosh & Jonathan D. Ostry, 1994. "Export Instability and the External Balance in Developing Countries," IMF Staff Papers, Palgrave Macmillan, vol. 41(2), pages 214-235, June.
    2. Jeffrey J. Schott (ed.), 2004. "Free Trade Agreements: US Strategies and Priorities," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 375, October.
    3. Ricardo Hausmann & Bailey Klinger, 2006. "Structural Transformation and Patterns of Comparative Advantage in the Product Space," CID Working Papers 128, Center for International Development at Harvard University.
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