The agreement intends to give Colombian companies the same access conditions as local firms to the markets of Brazil, Argentina, Uruguay, and Paraguay, the four member nations of Mercosur.

The agreement was signed during a meeting of the Pacific Alliance — the other major trade bloc in the region, which includes Colombia, Mexico, Chile, and Peru — that featured Colombian President Juan Manuel Santos as well as Brazilian President Michel Temer and Uruguayan President Tabaré Vázquez.

The development came amid a larger push by the two trade blocs to strengthen ties, a goal that has been in discussions for years and may now be moving closer to reality. The meeting produced a “roadmap” plan to work more formally to align the two commercial alliances, which combined include nearly four-fifths of the region’s population and 85% of its gross domestic product, according to the Ministry of Commerce.

While the roadmap didn’t make concrete advancements, it outlines the next steps to take to further advance the work needed to align on issues including the elimination of non-tariff barriers and regulatory cooperation as well as generally facilitating more trade in goods, services, and tourism.

María Lorena Gutiérrez, Colombian minister of commerce, industry, and tourism, signed the bill between Colombia and Mercosur and said that these markets are particularly appealing to Colombian firms in the software, consulting, and professional services spaces.

“For Colombia, it is very important to establish clear conditions of access to markets so that our companies can compete on equal terms with the service industries of the Mercosur countries,” said Gutiérrez. “This agreement generates legal certainty for entrepreneurs.”

Photo: Colombian Commerce Minister María Lorena Gutiérrez signs the agreement to deepen ties between Colombia and Mercosur. (Credit: Ministry of Commerce)

Coinciding with Colombian President Juan Manuel Santos’ trip to Brasilia to meet with Brazilian President Michel Temer, the two nations signed a memorandum of understanding to promote cross-border business training, entrepreneurship, and the digital exchange of information.

A joint declaration, signed by both nations’ commerce ministers, María Lorena Gutiérrez of Colombia and Marcos Jorge de Lima of Brazil, also will also lead to the cooperation on certificates of origin that Gutiérrez says will “simplify trade procedures” on products shipped between the two countries.

The two presidents are expected to meet one more time before Santos exits office, with Temer accepting an invitation to visit Colombia in June.

(Photo credit: Colombian Ministerio de Comercio Industria Y Turismo)

In Bogotá, where Lew will also sit down with Colombian Finance Minister Mauricio Cárdenas and Central Bank head José Darío Uribe, the secretary’s mission is to consult with Colombian officials on their plans to maintain strength in public finances. According to a senior official in the U.S. Treasury Department, the United States views Colombia as a well-managed, emerging-market economy with strong institutions and flexible economic policies. But it also recognizes that adjusting to the severe revenue losses it has faced since oil prices plunged two years ago is not easy.

The Treasury official also noted that Colombia is a regional leader in implementing public/private partnerships. It has attracted financing from a variety of sources across the globe, for example, for its ongoing — and massive — “Fourth Generation” road and highway infrastructure program. Lew has been encouraged by such efforts, and plans to talk to Santos, Cárdenas, and Darío Uribe on other ways to help navigate the low-growth times ahead in a world of low commodity prices.

Lew’s Place in Active Colombia and U.S. Relations

Treasury Secretary Jacob Lew’s visit to the capital marks another step in a particularly active stretch of high-level engagement between Colombia and senior U.S. officials. During President Santos’ trip to address the United Nations earlier this month, he met with President Barack Obama in New York. The two reportedly discussed the transition of the long-time “Plan Colombia” U.S. program, which has focused on fighting drug trafficking and improving security, into what now will be known as “Peace Colombia.”

That same week, U.S. Secretary of State John Kerry announced the nation’s pledge of an additional $36 million USD in post-conflict funding, specifically for landmine removal. Then Kerry later traveled to Cartagena to witness the official signing of the agreement with FARC this week on September 26.

Lew has served as treasury secretary under President Obama since 2013. He took over for Timothy Geithner after spending a year as the White House chief of staff and before that running the Office of Management and Budget for the Obama administration.

Secretary Lew Goes to Latin America

In all, Lew will make stops in Argentina, Brazil, Colombia, and Mexico during his Latin American tour. Together, with more than $7 trillion USD, these four nations combined to account for 75% of the region’s GDP in 2015, according to the International Monetary Fund.

Lew’s meetings in Brazil focused on discussions about how the United States can help new President Michel Temer steer the embattled nation towards economic normalcy. He stressed the need for the legislature in Brasilia to pass “difficult but necessary economic reforms” to get beyond the deepest recession in more than a century in South America’s largest nation.

Lew said that, “the Temer administration is taking ambitious steps to regain Brazil’s economic footing and restore confidence to consumers and investors alike.” He added that “the government’s proposed structural reforms, if passed by congress, will help the Brazilian economy realize its enormous growth potential.”

His trip to Argentina was the first official visit by a treasury secretary to the country since 2002. The administration of President Mauricio Macri has represented a change in tenor for the country’s desire to participate in the global economy, with the previous government’s continual talk of “hedge fund vultures” being replaced by ongoing praise for market-friendly reforms and pro-business sentiments.

Lew’s comments reflected the change in Buenos Aires that took place last December when Macri won the presidential election. “In its early months, the Macri administration has made a lot of progress,” said Lew. “We recognize that policies to prepare the Argentine economy for more balanced and sustainable economic growth may be difficult. Rebuilding institutions, reestablishing credibility, improving governance, and implementing structural reforms will not happen overnight. It is important for the government to stay the course.”

After leaving Bogotá, Lew will continue on to Mexico City to meet with President Enrique Peña Nieto, among other officials, before returning to Washington.

Photo: U.S. Department of Treasury