See our Outsourcing Provider Directory here

Signing a Foreign Trade Agreement Made Colombia Outsourcers More Welcome in the US Market

The Foreign Trade Agreement (FTA) is no longer an unfamiliar concept. By 2013 most American companies understand and appreciate the value of offshoring. Since the Indians were among the first suppliers to pioneer the concept of sending work across geographical boundaries, American companies feel comfortable offshoring major functions to Indian service providers.

Outsourcers in other countries would like to be considered on the short list at selection time too. American companies, however, have been reticent since they have had a decade of good experiences with India. “Our service providers want to work for US companies, but the buyers have been wary,” reports Juan Carlos Gonzalez, vice president of investment for ProExport Colombia, the Colombia government entity in charge of promoting foreign investment, international tourism and non-traditional exports.

Colombia’s service providers decided to tackle the challenge head on. The Colombian government (which includes the US Embassy), ProExport and other agencies worked with the Office of the United States Trade Representative (which is part of the Office of the President) to sign a Foreign Trade Agreement. The Trade Representative’s office monitors the trading partners’ implementation, “enforcing America’s rights under those agreements,” according to the Trade Office.

Colombia and the US signed their Foreign Trade Agreement in May. According to the Trade Representative’s office, Colombia is now the 18th country to meet the qualifications to earn an FTA since 1958 when they came into existence.

Gonzalez says the “FTA sets out clear, long-term rules on how to do business between the US and Colombia. It gives us a label of authenticity and accountability.” He says qualifying for the FTA “gives American businesses the right idea about Colombia. It shows our companies can comply with all US laws.”

The Proexport executive adds the Foreign Trade Agreement was important to the South American country because its outsourcing industry continues to grow despite the world economy’s tough times. “Outsourcing is a priority business sector for Colombia because it creates good jobs for our citizens,” Gonzalez explains.

The value for Heinsohn

Heinsohn is one of the largest IT service providers in Colombia; it has 700 employees. It develops products and services for pension funds. The company, founded in 1977, did well until 2002 when domestic and regional competition increased markedly. “Big projects became difficult to get. We needed to find a new source of business,” says Santiago Gil, vice president for consulting services.

Before the FTA, almost all Heinsohn’s buyers were either domestic or in another Latin American country, according to Gil. “We want to offer our services to America because the market is so much bigger there,” he continues.

The FTA “helps us overcome the challenges Americans may have with doing business with Colombian companies,” he adds. He believes it will help US buyers “think of Colombia as an outsourcing possibility.” Gil adds the Colombia government is working with different American agencies “to remove the barriers we found before the FTA.” The FTA is critical, according to Gil, because “it isn’t obvious why companies should do business with Colombian companies.” He says there are four main reasons:

  1. Talent. Colombia has a deep pool of IT talent with a wide range of skills.
  2. Location. Colombia is a near shore partner in the same time zone as New York City.
  3. Logistics. It’s easier to fly to Bogotá from the US than Bangalore.
  4. Stable economy. The economy has been stable and growing for the last 25 years.

Heinsohn’s first step in entering the US market is to offer its consulting services. Then it plans to market products that have matured in Colombia. “We are very optimistic about this,” Gil adds. “We are putting a lot of effort into our US launch. We welcome the challenge…and the opportunity,” he says. Gil views the Foreign Trade Agreement as a watershed moment. “It’s good for Heinsohn. It’s good for our IT sector. And It’s good for the country,” he believes. Would you hire a Colombian service provider? Why or why not?

 

Get 3 Free Quotes Logo

  • Save 70%
  • Unrivaled expertise
  • Verified leading firms
  • Transparent, safe, secure

Get Started

Small Teams Call Logo

Start your Outsourcing Journey in 15 seconds.

Get Started

Enterprise & Large
Teams Call
Logo

Explore with an Enterprise Expert

  • Independent
  • Trusted
  • Transparent
Outsourcing

Dive into “Outsourcing”

A Guide to … Selecting the Correct Business Unit … Negotiating the Contract … Maintaining Control of the Process

Order now

Outsourcing Articles

Start your
outsourcing
journey here

"*" indicates required fields

Start your outsourcing journey.

Book a call with an outsourcing expert now

This field is for validation purposes and should be left unchanged.

"*" indicates required fields

This guide will walk you through some areas most important when outsourcing, such as
  • Identifying Your Outsourcing Needs Intelligently
  • Research & Selection
  • The Bidding Process
  • Contracts & Agreements
  • Implementation & Onboarding
  • Ongoing Management
  • Evaluating Success
  • Additional Resources

Book a call with an outsourcing expert now

This field is for validation purposes and should be left unchanged.

"*" indicates required fields

Become an OC Partner
This field is for validation purposes and should be left unchanged.

"*" indicates required fields

Media Inquiries for OC
This field is for validation purposes and should be left unchanged.

"*" indicates required fields

Subscribe to our Newsletter
This field is for validation purposes and should be left unchanged.

"*" indicates required fields

Submit Press Release
Accepted file types: pdf, doc, docx, Max. file size: 8 MB.
This field is for validation purposes and should be left unchanged.

"*" indicates required fields

Submit an Article
Accepted file types: pdf, doc, docx, Max. file size: 8 MB.
This field is for validation purposes and should be left unchanged.

"*" indicates required fields

Request Ben Trowbridge as a Keynote Speaker
This field is for validation purposes and should be left unchanged.

Go to standard quote

Exclusive Enterprise Assistance

  • Independent
  • Trusted
  • Transparent

Offshore staffing solutions for enterprise. Independent expertise, advice & implementation

  • 200+ Firms, Global Reach
  • Offshore, Nearshore, Onshore, Rightshore
  • Managed Request for Proposal (RFP)
  • Assisted Procurement Processes
  • Vendor Management
  • Unique Build Operate Transfer model
  • Captive & Shared Services
  • Champion-Challenger
  • Multi-site, multi-vendor, multi-source
  • Managed Solutions

For Enterprise and large teams only

  • Book 20-minute consult, obligation free

You will get:

  • Needs Analysis & Report
  • Salary Guidance & Indicative Pricing
  • Process Map

Only takes 1 minute to complete the form

Get Started

Not an enterprise?

Go to standard quote