Photo: Economic Development Observatory of the Colombian Government.
In the face of the real estate and confidence crisis that China is currently experiencing, together with the growing “threat” of deflation, new export opportunities have opened up for smaller countries such as Colombia.
During the last months of 2023, exports between the U.S. and China saw a marked reduction, an opportunity that Colombia has taken advantage of by improving sales of 40 Colombian products in the U.S. market.
According to the Colombian outlet El Nuevo Siglo, these products are part of the 108 items identified by the Colombo-American Chamber of Commerce – AmCham Colombia – as having a marked opportunity in U.S. markets, and represented business totalling up to US$3.8 billion between January and November 2023, an increase of 19% compared to US$3.2 billion registered in the same period of 2022, according to data from the U.S. Census Bureau.
One of the main Colombian sectors benefiting from these China-U.S. tensions is agricultural products, generating exports of $1.6 billion, an increase of 11% compared to the $1.4 billion seen in the same period of 2022.
Next are precious stones and metals, with sales of $1.4 billion, up 28%, from $1 billion in the same period of 2022; and chemicals, with shipments worth $64 million, up 128%, compared to $ 28 million in the same period last year, according to Nuevo Siglo.
This decrease in Chinese supplies has generated massive growth in certain products such as: wadding, gauze and bandages, with exports of $9.3 million (+457%); carboxylic acids, tallying $41.2 million (+135%); and paper and cardboard, registering $18.2 million (+64%). They are followed by cassava and its derivatives, with $10.2 million (+58%); hair products, with $11.6 million (+48%); cane sugar, with $132 million (+43%); and vegetable preparations, with $84 million (+28%), respectively.
This recent change in U.S. trade seems to respond to the dynamics of nearshoring – or business relocation – which continues to establish itself in the region. As a result, Mexico managed to become the largest U.S. trading partner in the world between January and November 2023, surpassing China’s leadership of the last 16 years.
With this nearshoring, according to María Claudia Lacouture, president of the Colombian-American Chamber, AmCham Colombia, there is a great opportunity for Colombia’s 108 products with a so-called Revealed Comparative Advantage (RCA), although making this a reality depends on the joint work between the government and companies.
AmCham Colombia highlighted the importance and opportunities for export diversification that Colombia currently has in view of the current trends of changing global trade dynamics, risk diversification in companies and the search for new competitive suppliers. To achieve this, it will be essential to take joint action to encourage investment and move towards a path of sustainable growth and greater formal and quality employment, regardless of a favorable exchange rate.