1. Concepts
Ministry of trade, Industry and tourism (MCIT, by the Spanish acronym): It is department of Colombia’s Government that has as main objective to promote the economic development of the country although support to business activities in the industry, tourism and trade sectors. Besides, the ministry is responsible to formulate, adopt, manage, implement and coordinate general policies, programs and projects related to these sectors in order to reach competitiveness. (Ministerio de comercio, industria y turismo, 2003).
Foreign Trade Department: it’s a unit of the Ministry of Trade, Industry and Tourism involved in the design and implementation of polices related to foreign trade. Besides, it seeks for the establishment of commercial treaties and the increase in National exportations.
Source: Presidencia de Colombia (2010). Ministry of Commerce, Industry and Tourism- Sergio Díaz Granados. available at: http://wsp.presidencia.gov.co/Gobierno/Ministros/Paginas/MCIT_SergioDiazGranados.aspx
2. Question
What is the importance of MICT for Colombian exporters? And which are its most important programs and projects to support exports?
After the process of economic opening in the 90’s, Colombia has improved its participation in international markets especially with the traditional exports such us coffee, coal, flowers, petroleum and bananas. According to the National Department for statistics (Dane) during 2009 Colombia had exportations for more than 32000 million dollars and traditional exportations represented the 54.78% of the total volume.
In this way, to promote better conditions for Colombian exporters and producers to reach more access to international markets is a duty of the Public Sector because it is considered as an important part of economic development and competitiveness of countries.
In this context, Ministry of Trade, Industry and Tourism has a very important role for many reasons:
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source: Ministry of Commerce, Industry and Tourism (2010). Comercio Exterior. available at: http://www.mincomercio.gov.co/eContent/minihome.asp?idcompany=7
- Firstly, it’s a policy maker that defines the parameters and the fair conditions to access international markets. On the other hand, the Ministry establishes the tariffs and other customs decisions that define conditions for imports and FDI.
- The ministry develops specific government’s programs in order to promote exports for Colombian companies, not only for the big companies but also for small and medium enterprises, such as “Exporta Facil” that is a “program that is aimed at contributing to the development of the Micro-, Small- and Medium-Sized Enterprises in the international market through a simplified exports system that uses the postal service network as its logistic platform” (IRRSA, 2009). It has the support of IDB (Inter-American Development Bank) and the assistance of Brazil’s Government.
- The ministry, and especially the Foreign Trade Department, is a negotiator in international discussions about topics such as Free Trade Agreements. In this way, the ministry is responsible for finding benefits for Colombian producers in treaties and agreements.
- The establishment of Laws anti-dumping (sell a product at an unfairly low price) that creates the right conditions for competition between foreign and domestic products in the country.
- The Ministry, as other institutions for promoting foreign trade such as proexport, develops market research in order to create economic and commercial profiles of several countries that give exporters mechanisms for their decision making processes in international business.
So, Ministry represents the government in programs and negotiations for the establishment of bilateral and multilateral agreements. The most important example is the sign of the FTA with the European Union on May 19th that, according with Forbes (2010), “will have important symbolic significance for Colombia. Its economic implications will be even more significant, but felt gradually” and the most important benefits for Colombia’s economy, are provided by:
- level playing field with other Latin American countries (e.g., Chile) that have negotiated FTAs with the E.U., or are likely to do so;
- Long-term certainty for exporters that currently benefit from the E.U.'s "Generalized System of Preferences Plus" program, which is scheduled to expire for Colombia in 2015;
- Reduction of tariff and non-tariff barriers across a range of export and import sectors; and
- Closer, more formalized collaboration with the E.U. on sensitive issues, such as labor and human rights.
But, it is not the only important negotiation in which is participating the Ministry: the official website of it shows the projects and negotiations that are in process which include the FTA the Republic of Korea, agreements with Panama, European countries that aren’t part of the EU (For example Switzerland, Norway, and Iceland).
On the other hand, the Government of Colombia and the Ministry of commerce, industry and tourism are developing strategies that ease the foreign trade processes and paperwork for exporters and importers although information and communication technologies. This initiative is called VUCE (from Spanish acronym of Window for Foreign Trade) is a digital integration of entities related with international procedures (imports-exports) in order to give right information to exporters and importers and be faster the paperwork. (Ministerio de Comercio, Industria y Turismo de Colombia, 2007).
In conclusion, last information gives and idea about the importance of public entities for international business because governments must to provide information and an adequate scenario for the private sector to increase economic development.
3. Point of view
The classical economics theories suggest that, in a market economy, the government must exist because markets economies need that the government enforces the rules and maintains the institutions that are a key to a market economy. Economy needs institutions to enforce property right and to correct market failures. So, governments can improve market outcomes. (Mankiw, 2008).
This theory explains my point of view because it shows why, although the fundamental role of private sector in an open economy, a country must provide fair rules and right conditions that support the relationships among countries and ensure economy’s efficiency and equality. Besides, it’s important to take into account that governments and public institutions establish a general framework for economic activities to reach the development and the inclusion in international markets.
So, public institutions as the Ministry of Commerce, Industry and Tourism of Colombia and the Department of Foreign Trade have a key role in the improvement of economic indicators, since, after the economic opening in the early 90’s, foreign trade has increasingly become in an important part of GDP and now, participation in international business with exports is an aim for many Colombian companies and promotion of exports is one of the most important strategies of Colombian government. In this sense, the efforts of the companies must be support by the public sector as the best way to ensure fair conditions.
Finally, I think that, one of the most important duties of the Ministry is to encourage participation of small and medium size enterprises in international markets because, the Colombian economy is based in this type of companies. So, if the country wants to be more competitive and to improve its position in Latin America economy it needs to strength national production and employment and small and medium size enterprise are essential in this issue.
BIBLIOGRAPHY
Ministerio de Comercio Industria y Comercio de Colombia (2003). Decreto 210 de 2003. [Online] available at:
________ (2007) VUCE-Ventanilla Única para Comercio Exterior. [Online]. Available at: http://www.vuce.gov.co/
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