The impact of Free Trade Agreements (FTAs) in the productive structure of Colombia: An analysis based on the Input-Output model

Since the middle of the last decade, Colombia has arranged several Free Trade Agreements (FTAs) with many countries. This type of agreements could be assumed as parallel institutional structures that implicate changes in rules of international trade, intellectual property protection and investment. This paper just analyses the impacts in the domestic productive structure by the influence of trade openness deepening, particularly with the entry into force of the FTA’s between Colombia and the United States (US) and the European Union (EU). The paper aims to quantify the direct and indirect effects in the main sectors of the Colombian economy, as a result of the commercial shock caused by these FTAs, using for that purpose the methodological structure of input-output model. The results of the model for the period considered allow to conclude a negative impact in the domestic value generation of the industrial sector due to increase of the imported intermediary goods.