It Takes Two to Tango: Commercial Relation Beyond Of Bilateral Agreement, China and Colombia to Sign a Free Trade Agreement

Abstract

The main idea of this study is the negotiation with China within the general framework of Colombia’s economic and social policy, and to explain the reasons why it makes sense to negotiate this treaty. It’s been argued in the FTA document, which is an efficient policy in its substance, and several economic fundamentals are presented in order to identify the opportunities and risks, and then the agreement would generate more profits for Colombia’s economy. This study will look at the feasibility of a FTA between the Peoples Republic of China (PRC) and Colombia. The formulated research question will explore the various advantages to the Colombian economy of such an agreement. This study begins with the theoretical framework of regional integration agreements and the classical rationale behind free trade. It is this understanding that motivates the one hundred and fifty plus, current agreements worldwide. This essay then tackles static and dynamic analysis of trade flows and high-level quantification of increased trade. Should Colombia engage in a regional trade agreement with China, if so, which specific industries are most sensitive to tariff reductions? Finally the study concludes with policy recommendations and a suggested asymmetry in FTA structure.