The position of Iván Duque’s government before Joe Biden’s victory is a little more than “uncomfortable”, as several experts have pointed out. However, they coincide in emphasizing that, as has historically happened, relations between Colombia and the United States will continue to be healthy.
Statements by Democratic Center congressmen in favor of Donald Trump’s campaign and alleged offers by Colombian ambassador to the United States, Francisco Santos, to aid the re-election effort in Florida, formally denounced this Monday by former President Juan Manuel Santos in W Radio, brought to the fore a possible impact on the relationships that have been built over a century between Colombia and the United States.
Some experts have even talked about possible retaliation. However, others have shown that the character of the elected president of the United States is far from revanchism.
“It would be difficult to think that Biden has similar reactions to Trump,” said Professor David Castrillón, a researcher at the Universidad del Externado, who believes that Biden comes in as “a president of normality, who says he will manage international politics as a partner and allies. It seems difficult for an administration like this to punish the Duque government, ”says the academician.
A draft in which the newspaper El Espectador reports refers to the position that the Biden administration would take towards Colombia and confirms what the professor said.
The document also makes it possible to state that there will be no further retaliation by the North American Executive for the alleged interference in its domestic policy.
While it is unclear whether this same stance will be taken by Congress and the Democratic Party in general, it is something to be expected. The text, which has no more than three pages, shares the president-elect’s view of Colombia and his compatriots living on US soil.
One day before the presidential election, what would have been the future 46 of the United States, Joe Biden, in an interview for El Tiempo, reiterated that the bilateral link between the two nations will follow the path of collaboration and mutual assistance on decisive issues for regional geopolitics, such as the fight against drugs (Biden, during his time as vice president of the Obama administration, supported the eradication actions under Plan Colombia); Venezuela in transition to a democratic regime; and the implementation of the Peace Agreement will be at the center of an agenda yet to be defined, but in which, for its generality, they coincide with what was proposed by the ambassador to Washington, Francisco Santos, president of the Colombo-American Chamber of Commerce , María Claudia Lacouture and national academic experts.
What experts agree on is that President-elect Biden will have a difficult outlook with a Republican-dominated Senate, a political sector that will impose its agenda, work out vetoes on presidential initiatives, or directly influence issues that are not to Biden’s liking. but they are fundamental for Colombia, such as oil, for example.
For Francisco Santos, ambassador to Washington, the bilateral relationship is stronger than ever because it is a question of the nation and not of the government. He underlines, in an interview for El Tiempo, that this approach has been respected from the beginning by President Iván Duque, so he sees no room for criticism of an alleged interference by the Colombian government in the US electorate. He points out that those who are accountable are the members of the Colombian party Congress, whose statements, in favor of one or the other candidate, were the subject of media attention during the closing of the North American campaign.
On the other hand, Santos said he was “ready” to work on social issues that concern the elected president, such as human rights, labor issues and the implementation of the peace agreement. He says that “a democratic administration will probably understand very well the complexities that this entails, appreciate the results and we can probably work together to solve the difficulties., which are many and which all come from the 200 thousand hectares of coca that the government of Juan Manuel Santos left us. This is the worst enemy of the peace process ”.
María Claudia Lacouture, president of the Colombo-American Chamber of Commerce, appreciated the favorable prospects for trade ties between the two countries, which will favor a free trade agreement signed in 2012 that eliminated tariff barriers.
“In trade matters we see continuity in complementation and opportunities in this country, taking into account that we have a free trade agreement that guarantees stability and clear rules.” For the leader, there will not be a 180-degree turn in the agenda, but there will be opportunities in the Colombian non-mining energy export sector that accumulate, during the first three quarters of 2020, 3.847 million dollars.
In the Colombian case, what counts is the trend in the exchange rate between the peso and the US currency, whose fluctuation between 2017 and 2020 was characterized by sustained increases, reaching almost $ 4,000 Colombian pesos per dollar.
In the months leading up to the election, the Democrat proposed to repeal the tax reform Trump implemented during his tenure, which gave businessmen greater profits. Along the same lines, Biden has called for a public spending-based proposal that affects economic recovery after the COVID-19 bio-health crisis, so there is a consensus that the North American economy seeks recovery, in a scenario. where the only growing economy is the Chinese one.
This shift in priorities in the United States has led economists to propose scenarios under which the country’s economy can move with as little risk as possible. Munir Jalil, chief economist for the Andean region of BTG Factual, underlined the macroeconomic continuity of the North American giant, given that the favorable results of these years are part of a reality that cannot be hidden: lower interest rates for companies, large fiscal spending packages and monetary policy that protects the dollar from market fluctuations, which Biden will adhere to in his tenure.
The foregoing guarantees a weak dollar in the foreign exchange market which facilitates the acquisition of assets with this currency. In the Colombian case, this continuity will affect the value of the currency, which will not exceed $ 3,750 at the end of 2020.
However, there could be an impact on oil prices, given Biden and the Democratic Party’s penchant for exploiting alternative energy. This commodity, which suffered irregularities in the first two quarters of the year, would tend to prices less exuberant than those seen under Trump’s mandate, so the Colombian government’s tax accounts are expected to fluctuate in accordance with this economic view of Biden.
Another scenario in which economists, in this case the Corficolombiana team, ask for cautious actions by the Colombian government, is linked to the bearish behavior of stocks – after Trump’s defeat – and with a focus on spending, with those who investors will seek to acquire assets in emerging markets such as Colombia, so that the national economy will acquire liquidity in the years to come.
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