FTA IN LATIN AMERICA (FINAL DELIVERY)

Jessica Lisdey Jiménez Franco 1611021009

Julie Andrea Muñoz Peña 1721022596

Tamara Isabel Julio Williams 1711021558

Hernando Castro Ortiz 1711026377    

Layal Kassem Issa 1621023921

Alison Escarleth Rodríguez Delgado 1311340213

Politecnico Grancolombiano

Regional Culture and Economy of America

Bogota Colombia

2019
Introduction:

The following is a research project on five Latin American countries and their free

trade agreements with the United States, the most important areas of these five countries are

analyzed and taken into account (population, language, religion, economy, inflation,

unemployment and culture), to determine the importance of the import and export of each

country and how this affects the country in question.

Research Problem:

Can free trade agreements create a block of integration between the chosen countries

and the United States?

Hypothesis:

To answer this question we must use two points of view, the commercial one and that

of the population; On a commercial point of view, free trade agreements with the United

States bring pros and cons, since it allows for a more feasible export of the native products of

each country, achieving a better commercial flow but on the other hand there is also a sales

variable within of the country in question since the import of American products have more

affordable prices for the community and this develops a great commercial competitiveness.

From the point of view of the population, free trade agreements bring great advantages since

the products are sold at more affordable prices due to agreements of a series of mutual tariff

preferences among the countries in question.

Therefore we believe that free trade agreements can create a block of integration

between the chosen countries and the United States, since it allows great benefits for both

parties and healthy commercial competitiveness creates more tenacious entrepreneurs.

General objective

 Identify the importance of free trade agreements in the integration of different

underdeveloped countries with a developed country like the United States.

Specific objectives

 Know the culture and economy of different Latin American countries.

 Know what free trade agreements are and what they are for.

 Know the importance of the United States as the center of the FTAs.

Country Characterization

Costa Rica:

The flag of Costa Rica was created on November 27, 1906 along with the National

Shield. Tradition states that the conception and design of the current flag, in force since that

year, corresponded to Mrs. Pacifica Fernández Oreamuno, wife of the first president of Costa

Rica; José María Castro Madriz, inspired by the flag of France

The colors represent:

 Blue, the sky that covers Costa Rica.

 White, represents the peace that reigns in Costa Rica.

 Red, Love to live, bloodshed for freedom, and generous attitude.

Costa Rica obtains its independence on September 15, 1821 and adheres to the Federal

Republic of Central America. However, the Federal Pact is dissolved de facto between 1838

and 1839 and each province declares its independence. It is in this context that Costa Rica

becomes a Republic in 1848.

 Together with other Central American countries, Costa Rica participates in the war

against William Walker in 1856. During the battle of Rivas of Nicaragua, on April 11, 1856,

the National Hero of Costa Rica, Juan Santamaría, is distinguished.

From very early on, Costa Rica adopts a policy in favor of education with the objective

of guaranteeing the perenity of democratic institutions. Free and compulsory education is

established in 1869. Militarism does not prosper, and the operation of the country is solidly

founded on three clearly defined powers.

Capital The current city of San Juan de Tibás was designated as the capital of Costa

Rica in 1835, when it was called the Bat neighborhood. However, that law was not effective

and was repealed in 1838 by another that permanently established the capital in San José, a

city that had served as temporary capital until the necessary buildings were built in the Bat.

The main language of Costa Rica is Spanish (Spanish). Most people dedicated to

tourism also speak English. In addition, in some areas of the Caribbean, a dialect of English

spoken to Costa Rica by Jamaican immigrants is spoken in the 19th century.

The Currency is the Colón (CRC)

The majority religion of Costa Rica is Catholicism. In recent years there has been an

increase in the number of Protestant Christians and sects, but this phenomenon is much less

pronounced than in other countries in Central America.

It has a territory with a total area of 51 100 km². With a population of 4,999,441 people,

it is located at position 121 of the population table, composed of 196 countries and has a

moderate population density, 98 inhabitants per km2

 Located in Central America; It borders Nicaragua to the north, the Caribbean Sea to the

east, Panama to the southeast and the Pacific Ocean to the west. As for the maritime borders,

it borders Panama, Nicaragua, Colombia and Ecuador

The culture of Costa Rica is manifested as the syncretic mixture and cohesion of the

diverse customs of its inhabitants, originated in intense immigration, miscegenation and

pluricultural coexistence that the country has as a natural bridge and ethnic melting pot. This

unique and distinctive abundance, preserves at a family, cantonal and national level, it allows

defining the roots of the Costa Rican being through all kinds of traditions, folklore, culinary

uses, music, dances, beliefs and superstitions, as well as a characteristic popular language.

Among Costa Rican traditions, festivities that combine indigenous and Spanish

influence, religious festivities, civic festivities and popular festivities stand out. There are

some celebrations that reflect the indigenous heritage, being one of the most important the

game of the devils of Boruca in Rey Curré, which is celebrated at the end of the year in

Buenos Aires of Puntarenas. Some religious festivals reflect syncretisms between indigenous

beliefs and the Catholic tradition, such as the Dance of the Yegüita in Nicoya, which is

celebrated in honor of the Virgin of Guadalupe. For the people who profess the Catholic

religion, it is important the pilgrimage to Carthage to visit La Negrita. Another outstanding

celebration is that of the Black Christ of Esquipulas in Alajuelita and Santa Cruz. The

Christmas Eve meeting on December 24 and the religious processions of Holy Week are

other festivities with a religious background that are traditionally celebrated in the country.

In the artistic expressions of the country you can recognize a common thread through

more than 8,000 years, identifiable in their myths, heroes, legends and popular expressions. A

multitude of techniques and styles are practiced in the country, and there is diversity in the

themes and use of materials. Costa Rican art has been established according to the social
behaviors and aesthetic demands of certain historical epochs that Costa Rican society has

gone through, receiving first impulse from the State, such as the foundation of the National

Academy of Fine Arts (1897), and the University of Costa Rica (1940), and since 1980, also

by private companies.

The architecture of Costa Rica responds to the needs that the country has had

throughout its history, being a biological and cultural bridge, receiving multiple external

influences from around the world and developing through a millenary thread that begins with

its inhabitants native and continues today through its environment as an active developing

country.

The cuisine of Costa Rica, called Creole cuisine, is influenced by three variants: the

aboriginal, the Spanish and the African. The main contributions of the indigenous

gastronomy are the tamale, the potato, the corn, the yucca and the ayote. The Spaniards

introduced beef and wheat, so they began to create a mestizo cuisine.

Geography is located within the geographic coordinates 8 ° and 11 ° 15 ', north latitude,

and 82 ° and 86 °, west longitude. Including its insular area, it has an extension of 51,100 km²

(50,660 km² of land and 440 km² of water). Together with Belize and El Salvador it is one of

the smallest states in Central America. It limits to the north with Nicaragua with which it

shares 309 km of border and to the south with Panama with which it shares 330 km, to the

east with the Caribbean Sea and to the west with the Pacific Ocean.

The length of the coastline includes 1,228 km, of which 1,016 are on the Pacific coast

and 212 km in the Caribbean Sea. The Pacific coast presents a series of irregularities such as

peninsulas, gulfs and bays, a condition that facilitates the establishment of port areas and for

tourism development. On the contrary, the Caribbean coast is more regular, but less suitable
for this type of facilities. The country has sovereignty over 200 mn of exclusive economic

zone, and 12 mn of territorial waters.

Costa Rica, due to its geographical location, has a pleasant climate, which is the

combination of the tropical climate with its mountainous systems, which makes it relatively

stable, where its greatest changes are a rainy season and a dry season.

Costa Rica is governed by the political constitution of November 7, 1949, which establishes a

presidential system and a unitary state

The executive power is exercised by the President of the Republic, who is elected by

direct, secret and universal popular vote for a period of 4 years, Legislative Recalls in the

Legislative Assembly of Costa Rica, which is a unicameral body with 57 deputies,

responsible for approving, reforming or repealing laws and judicial decrees, The Supreme

Court of Justice of Costa Rica, seat of the judiciary. It is made up of the Supreme Court of

Justice.

The Court is composed of 22 magistrates elected by the Legislative Assembly for a

period of 8 years.

In Costa Rica the general elections (President and Deputies to the Legislative

Assembly) are held every four years and the municipal elections (Mayors, Regidores,

Trustees, District Councilors and Mayors, where it is appropriate to choose this last figure)

since 2016 are held every 4 years.

Costa Rica has a mixed economy, which has undergone a strong evolution, going from

being an eminently agricultural country to a service economy. According to the Global

Competitiveness Index of the World Economic Forum, in 2018 Costa Rica ranked fourth

among the best economies in Latin America and the Caribbean, behind Chile, Mexico and

Uruguay.
 Tourism is the fastest growing industry and since the beginning of the 2000s it

generates more currencies than any of the main agricultural export products.

Haiti:

It was founded on September 5, 1492 by Christopher Columbus up to the Spanish part

where it is called Greater Antilles and begins to be part of the Spanish Empire, before the

arrival of the Spanish was inhabited by ethnic groups, Sarawak, Caribs and Tainos where the

population was approximately 300 000 inhabitants.

In the same way, Haiti is an old French colony where it is said that it was the second

American country to declare its independence; However, Haiti is also remembered for the

history of mankind as it is the first case where slaves abolished the slave system

autonomously and also set a precedent for the end of slavery in the world.

It is a Caribbean country where the Taíno natives lived, currently the focus is the

protests and riots against the government of Jovenel Moise, which they accuse of corrupting

and making the lives of Haitians more expensive.

It is the poorest nation in the West where it faces a period of mass revolts and acts of

vandalism.

Having established itself as the first free nation in Latin America, it was also the first

republic led by an Afro-descendant where, by 1804, the rebel slaves defeated Napoleon

Bonaparte's French troops. The capital is Port-au-Prince, the official language is Haitian-

French Creole, it has a density of 401 inhabitants / km2, an area of 27,750km2, the currency

is the Haitian Gourde, it is in the western part of the Spanish island where it borders

Dominican Republic and has a population of 11 238 129 inhabitants.

The religion in Haiti is mostly Christian with 89% of the population.

 Religion that originated in West Africa where it is still practiced despite the best known

version developed in the Caribbean about the seventeenth century where the communities of

African slaves where it was the consequence of a mixture of tribal religion and Christian

rites.

They believe in a superior and creative God named Bondye which means "good god"

and Aido Wedo is a virgin and the guardian of the Legba gates is like St. Peter.

Haiti is the world capital of Vudú, this culture is applied by the cause of the various

diseases for the cures that are applied are herbs plus home remedies.

The sacrifice of animals is one of the most misunderstood aspects and that cause quite a

lot of controversies of Haitian voodoo, the sacrifice of animals is not necessary in every

voodoo ceremony.

It is one of the countries where the most diverse peoples and races in the world meet

where the inhabitants came from the Mayan group - quinches settled during the migration

that was seen at the beginning of the 17th century when the colonization period began.

On January 1, the independence of Haiti is celebrated on a holiday for them only one

meal is prepared during the day that breakfast squash soup; Likewise, women can be seen in

the streets carrying all kinds of elements in their head where it gives meaning to respect since

they were descendants of the slaves of Africa.

Haiti has a tropical climate. The rainy season extends from April to June and from

October to November, and the country is often hit by tropical storms and cyclones. On the

coasts it is tropical and in the mountains cold, so the heat decreases thanks to the sea breezes.

Haiti occupies the western third of the island of Hispaniola and has nearby islands and

small cays such as Gronave and La Tortuga. Its territory also has the island of Gonâve, the
Turtle, the archipelago of the Cayemites Islands and the island of Vaches, as well as various

islets of its territorial waters. The uninhabited island of La Navasse is claimed by Haiti before

the administration of the United States.

Haiti is a presidential republic with a popularly elected president and a National

Assembly. The current constitution was introduced in 1987 and is based on the constitutions

of the United States and France. After being suspended for a few years, it was completely

reinstated in 1994.

On February 29, 2004, an undercover coup d'etat, promoted by the US. culminated in

the alleged resignation of President Jean-Bertrand Aristide. In 2006, Aristide's former ally,

René Préval, was re-elected.

Likewise, it can be said that Haiti is a presidential republic with a president who is

elected every 5 years, taking into account also has a serious economic situation and

corruption.

Bright colors and intelligent humor characterize the Haitian in this same way delicious

fruits and lush landscapes are the objects that are seen in his works.

In the same way there are schools in Haiti that are responsible for describing their

works of daily life in the city. This school is called Cap Haitien, now the Saint Soleil school

is responsible for representing human and abstract forms and give strong influence to the

Vodou symbolism.

Having his painters in the region such as Artibonite is a developer of his own styles and

very recognized in the country.

The paintings are governed by specific details among them each garment or tree is

painted with different geometric shapes.

 Haiti is the economy 144 by the volume of GDP and its public debt amounts to 2360

million euros. What it shows is that each inhabitant owes 239 euros. So that its inhabitants

have a very low standard of living in relation to the 196 countries of the GDP ranking, in

terms of the human development index that the United Nations carries out to measure the

progress of a country results in Haitians being among those with the worst quality of life in

the world and that is worrying for a country.

Likewise, it can be seen that if it is for business development, it is also a discouraging

scenario since it is ranked 182 of the 190 positions that make up the Doing Business ranking,

it classifies the countries where you can do business.

Sources report that 80% of the population lives in poverty and 70% of Haitians depend

on agriculture; agriculture is mainly part of small-scale subsistence and employs about two

thirds of the economically active population.

The failure to reach agreements with international sponsors has prevented Haiti from

obtaining assistance for a budget and development programs, however the population

depends on almost 50% of family remittances sent from abroad.

It should be noted that currently the main exports are coffee and sugar, but in Puerto

Principe there are factories for processing edible plants, cement, textiles and soap; Haiti also

depends a lot on tourism and construction companies to grow their country and more people

can go to visit the regions they constitute.

The main destinations of Haiti's exports are:

United States ($ 931 Million),

Dominican Republic ($ 42.1 Million)

Canada ($ 31.6 Million)

France ($ 20.2 Million)

Mexico ($ 19.6 Million)

The main origins of its imports are

United States ($ 845 Million),

Dominican Republic ($ 830 Million)

China ($ 531 Million)

Indonesia ($ 120 Million)

India ($ 90.6 Million)

FTA HAITI WITH US

Since last January 19, 2010 during the dictatorship of Jean-Claude Duvalier supported

and financed by the US, the World Bank and the US promoted in Haiti the elimination of

tariffs on imported products as in the Free Trade Agreements (FTA).

The Haitians promised them prosperity once they helped them to orient their agriculture

to the export likewise the expansion of private corporations was favored, public companies

were privatized among others.

Previously, Haiti was self-sufficient for 90% of the food it consumed, especially rice.

Now, after years of liberalization of the economy, the abandonment of the agricultural sector

by the government and the arrival of cheap food made in the USA, the national agricultural

industry has been annihilated.

Many left the countryside to settle in slums around cities. They are cheap labor for

transnationals (with salaries of $ 48 per month). 4% of the population controls 64% of the
wealth, 80% lives in extreme poverty, illiteracy reaches 70%. This entire system is shot by

UN troops.

Due to the destruction of national agriculture, Haiti lost its food sovereignty, now it

depends on the importation of food for subsistence. It is at the mercy of global food increases

and has become the main buyer of US rice in per capita terms. A great deal for the US.

The product space is a network that connects those that are exported and can be used to

predict the evolution of a country's export structure; Likewise, Haiti exports 60 products with

a comparative advantage that is relevant. The world export of these products is much larger

and larger in the global market of these products, it can be said that Haiti exports the textile

part and is its strong point where it shows a participation of 37% in Interior t-shirts 22% with

the part of Vests, cardigans and some similar items.

In 2018, GDP has grown 1.5% compared to some previous years, it is 3 tenths higher

than it was in 2017 of 1.2%. Likewise, Haiti's GDP per capital was 725 euros higher than

2017.

Panama:

The separation of Panama from Colombia occurred on November 3, 1903, so it was

necessary to create a symbol like today is the Panamanian flag, which was created by Don

Manuel Amador, son of the first president of the republic. Its capital is Panama City and the

native language is Spanish, it has a density of 55 inhabitants per km2 and an area of 420km2,

the local currency is the Balboa- US Dollar, its location is Southeast of Central America and

the religion is mostly Christianity and has a population of 4 206 653 inhabitants.

In the regions of the Culture of Panama, various manifestations are held which are

considered as the identity of the country, which has been established and seen in a good way

by other cultures and regions of other countries, on more than one occasion, leading High
Culture of Panama. Among the folk expressions of a town we can mention: dresses, dances,

customs, music, instruments, meals, legends and crafts.

One of the qualities with which the Culture of Panama stands out, is the food, which is

very diverse in its different tastes, and foods used for its preparation, with excellent culinary

tastes, leaving a mark on Panamanian cuisine as well. that his clothes that we have the skirt,

typical costume of the Panamanian woman, that stands out as one of the most beautiful and

select in the world. We can distinguish two types of skirts: Pollera montuna and pollera de

gala, among others that have been known in other parts of the World.

The Culture of Panama has a very varied cultural life due to the great studies that have

been carried out during the times of history, which has been a mark of the legacy of our

ancestors, which nowadays becomes part of the legacy of the New generation, Panama has

one of the best documented indigenous literatures of the continent. The artistic tradition of

the colonial era focused on religious themes that mimicked the European tradition, but from

the independence of Colombia in 1903.

The art of the Culture of Panama has developed an expression with more national

details. Panamanian music is a lively combination of several musical styles that include salsa,

Cuban son, Colombian cumbia, Argentine tango and kas, water and soca from the Caribbean

islands. The most commonly used musical instruments are drums, castanets, improvises

(similar to guitars) and flutes.

The gastronomy of the Culture of Panama is very varied in its tastes and ingredients as

we have already mentioned above has stood out for its extraordinary tastes in the culinary and

rich uses of each of the ingredients, for which it has been characterized by many artistic

manifestations Food for the high consumption of rice in different forms and preparations, as

well as soups, the sancocho being the most popular. Other inputs and ingredients are corn,
bananas, chicken, meat, fish and shellfish, with which various dishes and fried foods are

prepared.

Panama has several large ports. The most important are: Cristóbal, Balboa, Vacamonte

and Armuelles. Its political division includes 10 provinces and 5 indigenous regions.

Panama has a tropical climate and temperatures are high during the dry period that

corresponds to the months of January, February and March.

Temperatures on the Caribbean Sea side of the isthmus are somewhat lower than on the

Pacific, and it easily rises after twilight in most of the country. The temperature is remarkably

cool in the highest parts of the mountains, and cooler in the Talamanca mountain range in

western Panama.

Panama has a constitutional system of democratic and representative government with

three branches of government composed of the executive branch, the legislative branch and

the judiciary. The country had a problematic history that included a 1968 coup that brought a

military dictatorship government to power. However, democracy was restored in 1991

through international interventions led by the US. UU. Panama City is the nation's capital and

is the seat of government.

The Panamanian economy is a unique case in the region. Panama is a small country,

where approximately 3.9 million people live. It lacks oil and has limited energy sources.

However, it is one of the nations with the highest economic growth in Latin America and the

Caribbean basin.

The formation of the Panamanian nation has been linked, for 500 years, to its strategic

geographical position and the maritime transit service that this geographical advantage has

facilitated between the Atlantic and Pacific oceans.

 Therefore, it is affirmed that currently the Panama Canal, operational since 1914, is the

fundamental center of the national economy. In fact, its operation generates about ten

thousand direct jobs and it is estimated that 6% of world trade passes through it.

The Free Trade Agreement (FTA) between the United States and Panama, known as the

Panama-United States Trade Promotion Agreement (TPA), was signed by both governments

on June 28, 2007. It was approved by Panama on July 11, 2007, and by the United States on

October 21, 2011; The agreement entered into force on October 31, 2012.

The TPA is a global free trade agreement that provides for the elimination of tariffs and

removes barriers to financial and other services. It also includes important disciplines related

to customs administration and trade facilitation, technical barriers to trade, government

procurement, investments, telecommunications, electronic commerce, intellectual property

rights and labor and environmental protection.

The TPC established a bilateral free trade zone that eliminates tariffs on the vast

majority of products that meet the rules of origin of the Agreement. There are specific

provisions in the Agreement on customs administration and trade facilitation that promote

bilateral trade in goods. The TPC also liberalizes cross-border trade in virtually all services,

with specific chapters focusing on financial and telecommunications services. It is based on

existing WTO agreements, as well as other international agreements and commitments, by

strengthening the rules governing investment, intellectual property rights, labor, the

environment and public procurement.

The product space is a network that connects products that are co-exported and can be

used to predict the evolution of a country's export structure.

Panama's economy has an Economic Complexity Index (ECI) of 0.119 making it the

56th most complex country. Panama exports 125 products with revealed comparative
advantage (which means that its participation in world exports of these products is greater

than one would expect given the size of its economy and the size of the global market for

these products)

Mexico:

Mexico, located in North America, has an area of 1,964,375 km2, so it can be

considered a large country.

Mexico, with a population of 124,738,000 people, is a very populated country and has a

moderate population density, 64 inhabitants per km2. Its capital is Mexico City and its

currency is Mexican pesos. Mexico is the 15th economy by volume of GDP. Its public debt in

2017 was 553,852 million euros, with a debt of 53.57% of GDP. Its debt per capita is € 4,453

per inhabitant. The last annual CPI variation rate published in Mexico is July 2018 and was

4.8%.

There are some variables that can help you know something else if you are going to

travel to Mexico or simply want to know more about the standard of living of its inhabitants.

The GDP per capita is a very good indicator of the standard of living and in the case of

Mexico, in 2018, it was € 8,312, with which it ranks 71st in the ranking and its inhabitants

have a low standard of living in relation to the rest of the 196 countries in the GDP per capita

ranking. No wonder, therefore, that Mexicans have on average the lowest average salary in

the world.

Regarding the Human Development Index or HDI, which the United Nations prepares

to measure the progress of a country and that ultimately shows us the standard of living of its

inhabitants, indicates that Mexicans are ranked 74.

 If the reason for visiting Mexico is business, it is useful to know that Mexico is in 54th

place in the 190 that make up the Doing Business ranking, which classifies countries

according to the ease they offer to do business.

Regarding the Public Sector Corruption Perception Index in Mexico, it has been 28

points, so the perception of corruption of Mexicans in their country is very high.

Mexico's gross domestic product in the second quarter of 2019 has grown 0.1%

compared to the previous quarter. This rate is 3 tenths higher than the first quarter of 2019,

which was -0.2%.

The interannual variation in GDP has been 0.6%, 5 tenths higher than in the first

quarter of 2019, which was 0.1%.

The GDP figure in the first quarter of 2019 was 276,940 million euros, making Mexico

the number 14 economy in the quarterly GDP ranking of the 50 countries we publish.

Mexico has a quarterly GDP per capita of 2,220 euros, 198 euros higher than the same

quarter of the previous year, which was 2,022 euros.

If we order the countries we publish based on their GDP per capita quarterly, Mexico is

ranked 42, so that its inhabitants have, according to this parameter, a low level of wealth in

relation to the 50 countries of which we publish this fact.

On this page you can see the evolution of GDP in Mexico. You can see the complete

list of the countries of which we publish the GDP by clicking on GDP and see all the

economic information of Mexico in Economy of Mexico.

The Government of Mexico expresses its approval with the agreement reached with

Canada and the United States, since the Treaty will allow the North American region to
deepen its productive integration, in order to continue being one of the most competitive

regions in the world.

In compliance with the commitment established by the Secretary of Economy,

Ildefonso Guajardo Villarreal, with the Senate of the Republic, through its Board of Political

Coordination, the Undersecretary of Foreign Trade, Juan Carlos Baker Pineda, delivered to

the Presidency of that legislative body the texts of the agreement with the United States and

Canada.

According to press reports, the new pact will increase the requirement of regional

content in vehicles produced in North America, from the current 62.5% to around 70%. In

addition, 40% of the value will be required to come from areas with salaries of about $ 16 an

hour. Vehicles assembled in existing plants that do not comply with this will pay 2.5% tariffs

In his statements to the press, the US president did not give many details about the pact,

but later the trade officials of this country published some keys: The agreement will last for

16 years, but will be subject to review every six years. This will not carry the threat of

automatic expiration of the treaty - as originally proposed by the US - and will allow the

renewal of the pact for another 16 years.

It will be required that, in order to be exported without tariffs, 75% of a vehicle has to

be produced in one of the two countries (currently 62.5% is required). In addition, between

40% and 45% of the car must be made by workers who earn at least US $ 16 per hour. This

seeks to avoid relocation of factories to low-cost areas in Mexico.

The section referring to labor rights includes an annex in which the parties undertake to

adopt labor standards and practices in accordance with the provisions of the International

Labor Organization, to enforce them and not to repeal them from their legislation.
 The United States is, by far, Mexico's main trading partner, followed a long distance by

Canada.

Mexico's economic activity will have a real growth of 1.7% in 2019. The Economic

Commission for Latin America and the Caribbean (ECLAC) estimates that Mexico will reach

a real economic growth rate in 2019 of 1.7%, lower than the of 2018 (2.0%).

This new figure is four tenths lower than the one projected in December 2018 (2.1%),

due to a slowdown in economic activity in the last quarter of 2018, due to the lower

momentum registered by public investment in the first months of 2019 (delays in the

execution of public spending associated with the start of a new administration) and a

moderate private investment. In addition, a negative effect on external demand is projected,

due to the slowdown in the US economy, caused among other things by the partial closure of

government operations in January and the loss of momentum that in 2018 gave the federal tax

decrease. The economic performance of Mexico has also been affected, although to a lesser

extent, by the taking of railway tracks by education workers in January, strikes at the

maquiladoras in the north of the country and the insufficient supply of gasoline in January in

important states for the economic activity of the country, due to the combat strategy of theft

of fuels in the PEMEX polyducts.

There are other risks that, if materialized, could lead to a greater slowdown in GDP

growth. Those are: the change in international financial conditions due to an increase in US

interest rates, commercial tensions (particularly between the United States and China),

investors' perception of the direction of economic policies, the decrease in public oil

revenues, an abrupt departure from the United Kingdom from the European Union and delays

in the ratification and implementation of the T-MEC.

 Inflation is expected to be 3.6% in 2019 (compared to 4.8% recorded in 2018), that is,

within the central bank's target range (between 2% and 4%). It is estimated that the

unemployment rate will be 3.5%, slightly higher than in 2018 (3.3%) and that the public

sector fiscal deficit will close around 2.0% of GDP (compared to 2.1 % in 2018), even when

a slight primary surplus (1.0% of GDP) is expected. The current account deficit of the

balance of payments, on its own, will be located at 1.8% of GDP at the end of the year (1.9%

in 2018).

In Mexican business culture, interpersonal skills such as "fit", cultivate relationships,

and, above all, win the favor of others, is sometimes considered more important than

professional competence or experience. Because a close relationship is established based on

those skills, one can often return to Mexico to further strengthen those ties. This culture

offers you a warm, friendly atmosphere, with a slower pace.

Peru:

The history of Peru dates back to about 20,000 years B.C. approximately, when the

territory began to be populated with groups of men and women hunters and gatherers. The

theories differ as to the true origin of the American man. Is the American culture native or the

result of Asian migration? Apparently, the second hypothesis would have many more

anthropological, archaeological and literary evidence. Its capital is Lima, the official

language is Spanish, the currency is the Peruvian sun, it is located in South America and the

religion is mostly Christian.

The estimated population is 32 million 162 thousand 184 Peruvians, of which 52.1%

belong to the adult population between 21 and 59 years, who have shown a progressive

growth in the last two years. However, the average life expectancy is 75 years.
 Peru is a democratic, social, independent and sovereign republic. Its government is

unitary, representative and decentralized, and is organized according to the principle of

separation of powers.

The Government is organized into three main powers: Executive Branch, Judicial

Branch and Legislative Branch. The president and members of Congress are elected every

five years by universal vote. The current Constitutional President of Peru Martín Vizcarra.

Likewise, the Electoral Power, represented by the National Elections Jury, is also considered

as the power of the State.

The Constitutional Court is the highest instance referred to the interpretation of the

Political Constitution of Peru and the Ombudsman responds to the demands of the population

on the actions of the State.

The economic fundamentals allow us to act as a powerful barrier to the onslaught of the

international crisis affecting Latin America. Several renowned economic institutions

confirmed that Peru will continue to lead the growth of the continent, according to the

Economic Commission for Latin America and the Caribbean (ECLAC), while the region will

grow by only 0.5%, while Peru will increase its gross product internal (GDP) at 3.2%. In this

regard, the International Monetary Fund (IMF) argues that our country will be one of the

engines of the region in 2019 and 2020, with an estimated growth of 3.7% in this year and

4.1% in the next.

With 21 commercial agreements in force, Peru had its second year of consecutive

growth in commercial exchanges, which totaled US $ 91,000 million in 2018, according to

the Lima Chamber of Commerce (CCL). By 2019, three trade agreements could enter into

force for Peru and thus modify the landscape of exporters, importers and, in general, of

Peruvian entrepreneurs.
 Each new free trade agreement represents multiple opportunities, but also new risks,

since they allow two or more countries to lower or reciprocally eliminate their tariffs and

reduce non-tariff barriers to trade in goods and services. In this way, they expand the

potential market for their companies and also open the doors to new competitors of local

producers.

The Trade Promotion Agreement (APC) Peru - USA It was signed in Washington D.C.

on April 12, 2006; and entered into force on February 1, 2009.

The following chapters were negotiated in this agreement: National Treatment and

Market Access, Textiles and Clothing, Rules of Origin, Customs Administration and Trade

Facilitation, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Commercial

Defense, Public Procurement, Investment, Commerce Cross-Border Services, Financial

Services, Competition Policies, Telecommunications, Electronic Commerce, Intellectual

Property Rights, Labor, Environment, Transparency, Strengthening of Commercial

Capabilities, Dispute Settlement.

The main products exported to the US They are: minerals / metals, textiles, fishery

products, crude oil, coffee, cocoa, handicrafts, paprika, artichoke, grapes, mango, tangerine,

asparagus. USA It is one of the main export destination markets for Peruvian products.

Since 1991, through the Andean Tariff Preferences Act (ATPA), Peru had unilateral

tariff preferences granted by the US. For the entry of certain merchandise, which was in force

until 2001. Since 2002, through the Andean Trade Promotion and Drug Eradication Law, the

USA. Again grant tariff preferences, which were renewed periodically, and that were in force

until December 2010.

In this context, in 2004, prior studies and coordination of the sectors involved, it was

decided to initiate negotiations for a free trade agreement, to provide a permanent

comprehensive commercial opening, which would provide the necessary stability for the

increase in investments in the export sector.

As of 2009, the APC in force between Peru and the US It has already begun to allow us

to boost Peru's economic development through trade, with trade expectations never before

experienced, having a perennial access to very large markets in a consolidated manner.

As we know, the FTA with the United States has just been sworn and sacramented with

the approval of the US Senate (the year 2006 had already been approved by the Peruvian

Congress) and with the signature of President Bush.

Having completed this difficult stage, and waiting for implementation and enforcement

(which will surely occur in early 2009), the time is conducive to make a brief account of

some of its many positive aspects for Peru.

Under the FTA, Peru will export ethanol from the sugarcane to the US. It will

contribute to the creation of infrastructure. Since our production must compete in the North

American market with that of countries that already freely access it (for having signed two

FTAs), such as Chile, Mexico or the Central American countries, and that it must also

compete here with North American production (which will enter without paying tariffs), our

country must significantly increase its competitiveness (its ability to compete). Therefore, it

will require improving the infrastructure necessary for production, that is, roads, ports,

airports, telecommunications systems, water and electricity supply, etc., which will benefit

the general population.

It will encourage foreign investment, and thereby contribute to the growth of GDP.

Since Peru opens up the possibility of exporting to a giant market such as the United States,

foreign companies from countries that do not have a treaty of this nature with the United

States will be encouraged to settle in our country, to take advantage of provides the TLC.
These companies will also take advantage of the existence in Peru of abundant natural

resources and cheap labor. Companies in more distant areas, for example China, will also

take advantage of Peru's relative geographic proximity to the United States.

It will promote the improvement of education, job training and technological

development, since these factors, as well as infrastructure, are essential elements to improve

competitiveness.

It will reduce production costs. This will be so because companies can acquire at a

lower cost the inputs and capital goods they require.

It will promote technological improvement at all levels. As we know, the United States

is one of the world's technology giants. Since their products will freely enter our country,

both private consumers and businesses and the government itself will be encouraged to

improve their equipment, increasing their purchases of computers, vehicles, machines and all

kinds of capital goods. This will contribute to raising the productivity and efficiency of

companies.

It will improve the purchasing power of consumers. This will happen thus when

entering the country all kinds of American consumer goods, increasing the offer available to

the public, and therefore, contributing to the reduction of prices.

It will promote employment, as companies will increase their production, to export

more. This improvement will not only occur in companies that export directly, but also in all

those linked to the export chain as suppliers, including thousands of SMEs.

It will improve working conditions in Peru. Because the United States does not accept

that goods produced under conditions of unfair competition enter its country, Peruvian

companies that aspire to enter that market will be forced to set aside informality and other

practices that constitute abuse against their workers.

 In addition, the FTA will force our country to maintain a serious economic line, in

which there will no longer be room for demagogic or populist approaches, which would

detract from our competitiveness and generate serious problems in the trade balance with the

United States. The only way to respond to the undeniable challenges of the new scheme will

be to maintain and consolidate the current economic model.

Justification:

Over time, free trade agreements may allow large alliances between Latin American

countries as it eliminates many barriers that prevent good trade, thus achieving great alliances

not only commercial, but also political and tourist.

Literature Review

Theoretical framework

Free trade agreements are important as they constitute an effective means to guarantee

the access of products to external markets, in an easier and barrier-free way. In addition, they

allow the commercialization of products to increase, more employment is generated, the

creation of new companies by national and international investors is promoted, improving the

commercial flow and healthy commercial competitiveness.

According to Barba (2017. Page 6), in his article entitled “Logistics as a weapon to

confront trade protectionism” He states that “the FTA proposes the expansion of the

participants' market through the elimination of tariffs and charges that affect exports and

imports ”.

According to Rendón (2007. Page 26), in his article entitled "FTA and exports: the

commitment to trade stability" He states that "the Free Trade Agreement (FTA) is moving
forward vertiginously, so that despite from the efforts of the authorities and negotiators to

democratize their debate, it is moving faster than public opinion can manifest itself”.

According to Gazol (2016), in his article entitled “Free trade: treaties and new order. A

balance sheet” It states that “Free trade between countries is a very old aspiration that comes

from, at least, the first industrial revolution of the late eighteenth century and, without

exaggeration, it could be said that it was born simultaneously with the birth of the economy

as science. It is a topic to say that the classical current is the school of free trade: its great

exponents (Smitth, Ricardo or Stuart Mill) argued in favor of it and built the theoretical

scaffolding on which, basically, many of the theories have continued to be built current

international trade and which, in turn, are the basis of trade policies in the world”.

According to Sánchez (2004), in his article entitled “Theory of free trade agreements”

He presents that the Free Trade Agreement “It is an economic agreement that establishes the

gradual abolition of tariffs, and other barriers to free trade, in the majority of products

manufactured or sold in the world, as well as the elimination of barriers to international

investment and the protection of intellectual property rights”.

According to Dillon (p. 280), from his article entitled "THEORETICAL BASES AND

PRACTICES OF FREE TRADE AGREEMENTS" he presents that "History teaches us that

trade between nations can produce mutual gains. But free trade does not necessarily produce

similar gains for all participants in a free trade zone, especially when there are large

asymmetries among the participants. Trade earnings can be poorly distributed among

countries, between regions or between social groups”.

Conceptual Framework

Market Access. Ability to access products to a given market, in accordance with the

tariff or para-tariff restrictions in force in a country, territory or group of countries, in

accordance with national, regional or multilateral regulations for the entry of imported

products into that market national. It determines the real possibility of national suppliers of

goods and services to compete against imported products (access to the national market), or

of national suppliers to penetrate into an external market access to third markets.

Commercial Agreement. Agreement, treaty or any other binding act by which two or

more nations undertake to abide by specific conditions in their commercial exchange, which

ordinarily includes mutually beneficial concessions. Customs. Public service whose main

responsibility is the verification and valuation of goods, to apply and collect duties and taxes

on imports and exports, and the administration of other laws and regulations that apply to the

importation, transit and export of goods.

Organic agriculture. Agricultural production methods that avoid synthetic

agrochemical use, prioritizing the use of inputs of organic or biological origin, as well as the

application of ecological principles such as: green manures; biological control of pests and

diseases; crop rotation; associated crops; resistant clones; biodiversity; integral farms;

ecological floors; ground rest; agrosilvopastoral systems; soil infestation by solarization and

other methods.

Sustainable agriculture. Type of agriculture whose productivity allows to meet the

growing needs of the current and future population while keeping their productive potential

intact.

Agribusiness / Agroindustry. Agribusiness complex that involves the production,

supply of inputs, processing, transportation and distribution of agricultural, agro-industrial

and food products, as an integrated chain with interactions between the economic agents

involved.

Structural adjustment. Set of policy measures to readjust and adapt the production

and employment structure of a national economy to changes in economic and commercial

conditions.

Tariff. Right, rate or tax that applies to goods transported from one customs area to

another. There are import and export tariffs.

Tariff relief. Reduction of tariffs between two countries that have reached a

commercial agreement on market access.

Import licenses. Administrative measure by means of which the imports made by a

country are controlled.

World Trade Organization (WTO). International organization that deals with the

rules governing trade between countries. The pillars on which it rests are the WTO

Agreements, which have been negotiated and signed by the vast majority of countries that

participate in world trade and ratified by their respective parliaments.

FTA. It is an agreement between different countries to grant certain benefits to each

other. Three types of trade agreements can be distinguished: free trade zone, customs union

and economic union.

Free zone. Areas of the national territory extra-customs, previously qualified, subject

to a special regime, where companies, national or foreign, that are dedicated to the production

or marketing of goods for export, direct or indirect, as well as the provision of services

related to international trade and related or complementary activities.

Legal Framework

This project has an impact with The Free Trade Agreement (FTA), in its articles 2 C.P,

366 C.P, 25, 58 and 333 (Economic triptych) and Arts. 226 and 227 of the constitution; where

it is stated that the Constitution is responsible for enforcing the most important terms of the

state and these can be achieved in a better way with free trade agreements which will increase

the general prosperity and maintain a better quality of life of the population, taking into

account the right to work, right to prope rty and freedom of enterprise.

On the other hand, the laws that guarantee free trade agreements such as: Law 8 of

1973 issued by the congress of the Republic of Colombia, where the free trade agreement

between Colombia, Bolivia, Chile, Ecuador and Peru is supported, Law 9 of 1991 in which

general rules are established to which the national government of Colombia must be subject

to regulate international changes, Law 7 of 1991 where the Ministry of Foreign Trade, the

Foreign Trade Bank and the Economic Modernization Fund are created which accredit free

trade agreements, Law 1000 of 2005 approving the Economic Complementation Agreement

(ACE) between Argentina, Brazil, Paraguay, Uruguay, Colombia, Ecuador and Venezuela,

Law 1143 of 2007 that allows the Agreement of commercial promotion between the Republic

of Colombia and the United States of America, Law 1166 of 2007 which establishes the

protocol modifying the Free Trade Agreement between Colombia and the United States

Gone, Law 1189 of 2008 in which the Free Trade Agreement between Colombia and Chile is

approved, Law 1241 of 2008 accredits the Free Trade Agreement between Colombia and El

Salvador, Guatemala and Honduras, Law 1457 of 2011 which makes the Protocol amending

the Free Trade Agreement between the United Mexican States, Colombia and Venezuela.

Law 1763 of 2015 that guarantees the Free Trade Agreement between Colombia and Costa

Rica.
 There are also decrees that dictate different parameters of the FTA between countries,

such as: Decree 2314 of 2004 which regulates some procedural aspects of the negotiations of

the Free Trade Agreement with the United States, Decree 1870 of 2007 complies with the

commitments acquired Under Decision 46 of the FTA Administrative Commission with

Mexico and Venezuela, Decree 2676 of 2011 generates the Protocol Modifying the Free

Trade Agreement between the United Mexican States, the Republic of Colombia and the

Republic of Venezuela, Decree 993 2012 By means of which the Trade Promotion

Agreement between the Republic of Colombia and the United States of America is

promulgated, its attached letters and its understandings signed in Washington DC, on

November 22, 2006 and the protocol modifying the trade promotion agreement Colombia-

United States, signed in Washington DC, on June 28, 2007 and its attached letter a of the

same date and Decree 1688 of 2016 By which Decree 4388 of 2009 is modified, in order to

comply with the tariff commitments acquired by Colombia with El Salvador under the Free

Trade Agreement between the Governments of the Republic of Colombia and the Republics

of El Salvador, Guatemala and Honduras.

Research results

The research method used to make the hypothesis was to make a comparison between

free trade countries with the United States through the websites that sell products vs. the

population consumer that means that consumers have greater access to make a comparative

prices on existing items inside and outside each country, however, the FTA has benefited and

affected many countries due to the wide variety of products and markets that expand

regarding culture, inflation, economy, unemployment, religion, language

We can see the world that has been changing in a very momentous way in the economic

part a clear example that can be seen daily is the dollar, oil and coffee so pampering the FTA
opens the doors to different small, medium and large companies Being able to sell your

products, export them and make yourself known to other important industries in the world.

But critics say that with TLC they move many employees and business operations to

other countries, as they develop. Businesses in the United States seek to benefit from workers

with lower salaries in business economies.

Making a parallel of the FTA with the countries that are allied makes the raw material

and the production of the companies make the consumers have a great variety of products

either by color, shape, size and other characteristics that can be a differential in the Orange

economy that is beginning to apply in many companies.

That makes the GDP of each country totally different and has a variation in the imports

and exports of the products of each region at the same time. The research method that can be

evidenced is the comparison of countries that have not had the opportunity to create an FTA

with a country as important in the world as is the United States of America.

Some countries have had a satisfactory process and evolution because they have

stabilized the economy of the region and created a greater opportunity for employment,

industry, among others, but others have also had to go through adverse situations and with

many companies liquidated or bankrupt because tariffs in the US are cheap as in other

countries too.

It is proposed that the free trade agreement allows the reduction of the payment of

tariffs situation that allows countries to extend the markets without major procedures and

obtain greater benefit for the economies of their countries, also contributes to the

strengthening and acceptance of relations between different cultures , but the low prices

indicate that Colombian producers cannot compete with their current level of production; One

of the most affected sectors is that of dairy, corn, and rice producers. According to the
National University of Colombia, the inequality of power on the global scale and the ability

to influence by rich countries causes clear imbalances. In this case, the United States takes

advantage of its ability to produce corn and dairy efficiently to sell to the Colombian market,

which cannot compete.

Another aspect to take into account when signing a free trade agreement, is the danger

that less developed countries, such as Latin Americans, generate a dependency in relation to

economic ties with the United States. There is no problem if the US economy is working;

However, there are problems when the US market consumes and buys the same amount of

products, endangering many exporters and companies in Latin American countries.

There is a mismatch in terms of tax revenues, since by eliminating tariffs on foreign

products, they would be no longer receiving taxes for this concept, which could deepen the

national fiscal deficit. Finally, there is no capacity to adapt national companies to

international production standards, generating monopolies and market capture by the US

supply that enters the country.

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