The Florida-Colombia Connection
Stability, economic growth and a new trade agreement are creating stronger Florida-Colombia trade links.
On the 11th floor of a midrise office tower on the north side of Bogotá, Colombia's capital, the 2,400-sq.-ft. offices of law firm Holland & Knight offer a vista that includes the Andes mountains, a dense urban skyline and taxi-clogged roadways.
Half of the offices are empty, but likely not for long. Holland & Knight — one of many Florida companies eyeing opportunities in the country — moved in eight months ago with growth in mind. It plans to expand from six attorneys to 25 in about a year.
A decade ago, many American businesses wouldn't have even thought about opening an office in a country then considered one of the world's most dangerous. In addition to rampant crime, Colombia was mired in a decades-long struggle with a criminal Marxist group known as FARC (Revolutionary Armed Forces of Colombia). Many businesspeople in Bogotá hurried from work to home in armored vehicles, fearful of bombs and kidnapping.
Tourism, such as it was, consisted largely of business travelers or Colombians visiting family, who came and went cautiously. Bob Grammig, a partner with Holland & Knight's Tampa office, says the reception committee for business travelers to Bogotá a decade ago included armored vehicles and bodyguards.
"You would never leave the office of the client without having a bodyguard with you — usually two of them — and a driver," he says. "You couldn't go 10 kilometers outside the city of Bogotá or else you were looking for trouble."
In the past decade, however, a transformation has taken place, thanks to a concerted effort by former Colombian President Alvaro Uribe to crack down on crime. A new war tax, plus billions in aid from the United States, helped fund a stronger military. The 100,000 additional troops wrested control of land from the FARC. Uribe also began working to demobilize right-wing paramilitary groups frequently involved drug trafficking.
Today, Grammig describes Bogotá as a "normal city" where people walk the streets without bodyguards and use public transportation. Hoteliers struggle to keep up with flocks of tourists who now visit the country. Colombians haven't totally dropped their guard ["Doing Business in Colombia," page 68], but kidnappings are rare, and the Colombian government has been holding peace talks — once clandestine, now open — with FARC, whose forces have dwindled to an estimated 8,000.
As social order improved, the country's economy — dominated by coffee, energy and food production — began growing at a heady clip. Colombia's gross domestic product has risen an average of 4.3% a year for the past decade, with a high of 7.7% in December 2006, and the country escaped the global recession more quickly and with less damage than most nations. Colombia has also been attracting capital — average annual foreign investment rose from less than $3 billion in 2005 to $8.4 billion in 2010.
The U.S. Colombia Trade Promotion Agreement, which went into effect in May, is expected to further accelerate growth. The agreement eliminates most tariffs on trade with Colombia and phases out tariffs on some agricultural products, such as corn and dairy. Major beneficiaries are likely to include Colombian agricultural exporters, particularly in dairy and sugar, along with shippers and professional services firms.
Because of its proximity to Colombia, Florida is expected to benefit more than other U.S. states — exports to Colombia, Florida's No. 2 trade partner, are expected to increase by as much as $345 million over 2010 levels, according to some estimates.