Colombia is a unitary republic. The president heads the executive branch and is elected for a four-year term; re-election is allowed under the constitution. Legislative power is vested in a bicameral legislature and members are elected by popular vote for a four-year term.
The constitution was amended in 1991 to provide a more modern institutional framework and
mechanisms to maintain economic stability. This included separating the central bank from the executive, legislative and judicial branches of the government and improving the efficiency and transparency of state entities.
Colombia has a diversified economy by regional standards. The principal agricultural activities are cattle rearing and coffee growing. Industrial activities, concentrated around the cities of Medellín, Bogotá, Cali, Barranquilla and Cartagena, are dominated by a number of large private conglomerates, as well as small and medium-sized enterprises. Telecommunications has been one of the most dynamic sectors due to the development of services, such as long-distance and wireless communications, in large urban centers. The government is the main supplier of personal services. Colombia also has many natural resources, such as minerals and fuel.
Colombia’s top four exports are oil, coal, coffee and ferrous nickel.
Colombia is a member of the Andean Community (CAN) and the Latin American Integration
Association, and has established trade agreements with Mexico and Venezuela (through the
Group of Three, or G3, accord). No tariffs apply to intragroup trade (except for certain manufacturing products). Trade agreements with Caricom (the Caribbean Community) and
Mercosur (southern customs union) aim to eliminate internal duties and trade barriers. The Andean Community has created a free trade zone with Bolivia, Colombia and Ecuador that has increased trade and integration among these countries. Ecuador and Venezuela are major markets for Colombia’s exports.
The 2004 Mercosur-Andean Community Free Trade Area agreement (under which Mercosur partners agreed to link their trade area to that of the Andean Community) states that import duties should be eliminated among the signatories within 15 years. To respect previous bilateral agreements with in Mercosur and within the Latin American Integration Association, the bloc has 67 schedules for the reduction and eventual elimination of import duties among the nine members.
Mercosur signed an agreement in 2004 to adopt special tariffs in its trade with the countries of the Southern African Customs Union, comprising Botswana, Lesotho, Namibia, South Africa and Swaziland. The agreement aims to gradually reduce and eventually eliminate tariffs. A similar agreement was signed with India in 2005.
Colombia has signed free trade agreements with Chile and the US. In 2006, the EU approved a 10-year “GPS Plus” that benefits Colombian exports entering the EU market and grants duty-free access to more than 6,600 goods exported by Colombia to the EU.