Competitiveness and trade policy problems in agricultural exports: The case of Colombia. Doctoral thesis project.

Abstract

This study will explore current and potential competitiveness of selected agricultural exports of Colombia to the markets of the United States and the European Union. The markets of these industrialized countries constitute the most important markets for Colombia, but at the same time have very strict trade constraints in the agricultural sector. This study will show that competitiveness is not only a function of domestic/internal impediments such as a poor institutions, low technological capability, availability of capital, human capital and labor, but also of external impediments such as market access. Therefore, it is an important objective of this study to project the possible scenarios of Colombian trade, by investigating the elimination of those restrictions. In the empirical part emphasis will be laid on the impact of external restrictions by means of an econometric study, however the influence of internal restrictions will be broadly discussed as well.

The central hypothesis of this work is that the elimination of trade restrictions in the USA and the EU might have an important impact on Colombia competitiveness even though, it cannot guarantee an increase of Colombia exports without curing some home-made problems. Only the “trade policy” part of this hypothesis can be tested by means of an econometric study. The role played by home-made factors is to be evaluated by an analysis of the environment in which exports take place (macroeconomic reports, studies of the Central Bank of Colombia, export corporation, credit institutions, marketing boards, technical assistance programs and the like).

An important contribution of this study consists in incorporating more comprehensive and interdisciplinary theories to explain international trade. Competitiveness theory takes on a multidimensional point of view that stretches from microeconomic levels of analysis. It also includes internal and external factors to explain changes in trade flows.

For developing countries and especially for Colombia, agricultural sector policies fo have implications in economics, politics and social aspects. This study expects to develop the theoretical and empirical foundations of competitiveness for supporting decisions of policy makers in private and public sectors.