Colombia Eyes Stronger Links With China to Boost Trade

(Bloomberg) --

For years Colombia stood out as the major Latin American country with the smallest Chinese investment. Now, the two nations are getting ready to sign a deal to strengthen commercial ties as China prepares to pour money into projects from infrastructure to mining.

The agreement, which is being finalized, will include elements of China's massive infrastructure program known as the “Belt and Road” initiative, as well as agreements on everything from politics to economics and culture, according to China's Ambassador to Bogota Lan Hu, who says Huawei and ZTE are prepared to build out Colombia's 5G network.

While China has invested heavily in neighboring Venezuela and Ecuador, that hasn't been the case with Colombia, traditionally Washington's strongest ally in the region.

That dynamic is rapidly evolving, even as coronavirus disrupts big economic ambitions like Belt and Road. At 3.3% last year, Colombia's growth was the fastest among major Latin American economies. Chinese firms have committed billions of dollars in the country since last year, winning bids to build Bogota's first metro line and a regional rail line, and acquiring a gold mine. 

The deal that's in the works would pave the way for more, including possibly in renewable energy, technology and agriculture. China is also looking to import Colombian flowers, meat and dairy products.

Colombian President Ivan Duque made a state visit to Beijing in July, and Chinese President Xi Jinping is considering a reciprocal trip possibly this year.

It's unclear how the flowering relationship will go over with the Trump administration, which has a wary eye on China's growing influence around the world.

Charting the Trade War

A fresh standoff between Vladimir Putin and Recep Tayyip Erdogan isn't just testing the fragile alliance that has allowed Russia and Turkey to work together in the Middle East, but also threatening the two countries' deeply entrenched economic ties. Turkish farmers were the biggest losers of the last trade in 2016 spat as Putin used a ban on fruit and vegetables to help domestic businesses investing in food production.

Today's Must Reads

• Navel gazing | The Jaffa orange's decline as an Israeli export highlights the country's shift away from its agrarian roots and its emergence as a tech powerhouse.
• Welfare check | The U.S. Agriculture secretary sees less than a 10% chance U.S. farmers will more trade aid this year, despite a tweet from President Donald Trump raising the possibility.
• Fish on | U.K. Environment Secretary George Eustice said he is optimistic Britain and the European Union will reach an agreement on fishing rights by July 1.
• The optimist | White House economic adviser Larry Kudlow is defiantly optimistic amid growth headwinds ranging from the current worldwide health scare to U.S. tariffs.
• Fitbit for cows | A Huawei-led 5G revolution is unfolding in the bucolic Swiss hamlet of Taenikon, as Switzerland is quietly builds a network with the Chinese company.

Economic Analysis

• Train in vain | Railroad volume and revenue estimates face declines tied to the virus and trade.
• India outlook | The country's growth was stuck in a long slowdown even before the coronavirus outbreak.

Coming Up

• March 6: U.S. trade balance, Canadian merchandise trade
• March 7: China trade balance
• March 9: Germany trade balance

--With assistance from Ezra Fieser and Natasha Doff.

To contact the editor responsible for this story: Brendan Murray at brmurray@bloomberg.net, Zoe Schneeweiss

©2020 Bloomberg L.P.