Ibarra Rimon Partner Gabriel Ibarra Pardo Interviewed by La República Newspaper Regarding the Launch of His New Book

Ibarra Rimon Partner, Gabriel Ibarra, was interviewed by La República in relation to the launch of Gabriel’s new book, ‘Las Tramas de la Modernidad’ (The Plots of Modernity)”. A  translated transcript of the interview is published with consent of the publisher below. Note that the translation was prepared by a third party and there may be subtle differences in content between the written transcript and video interview.

Click here to view the interview. 

La República newspaper interviewed attorney Gabriel Ibarra Pardo regarding the launch of his new book ‘Las Tramas de la Modernidad’ (The Plots of Modernity). The book is a compilation of more than 400 pieces on foreign trade, competitiveness, competition, customs, formalization, and challenges of regulatory frameworks in light of technological advances that Ibarra has written. The interview covered the following topics:

Export Challenges

Gabriel Ibarra stated that the country has multiple challenges in terms of exports, mainly the issue of how to promote and diversify exports, the economy, and how to improve competitiveness. He affirms that, although the analysis of the situation is abundant, he considers that the main challenge lies in transforming the structure of our exports. He states that we must focus on how Colombia and its products can be effectively integrated into global value and production chains. In this sense, there are fascinating examples such as the model led by Fedemetal, under the leadership of Dr. Juan Manuel Lesmes.

Free Trade Agreements

Regarding FTAs, Ibarra states that although Colombia has a network of 17 Free Trade Agreements (FTAs), the capacity to export and take full advantage of these benefits continues to be a complex issue with pending challenges.

One of the main obstacles lies in the exportable supply. On occasions, international demand exceeds domestic production capacity, limiting export opportunities. Another aspect to consider, from a personal perspective, is the “commercial promiscuity” represented by the large number of FTAs. The assortment of agreements can generate confusion and make it difficult for companies to make strategic decisions.

It is important to carefully evaluate the convenience of each trade agreement, taking into account the possible interactions and considering that the advantages of one agreement may be affected by the conditions of another. The proliferation of bilateral agreements, as opposed to multilateralism, can lead to trade detours that are detrimental to some sectors.

To optimize the use of FTAs, inter-institutional coordination must be strengthened. Tariff reductions do not guarantee an immediate increase in production, so complementary actions are needed. It is essential to revitalize the domestic export agenda, which has lost relevance in recent years. This agenda should focus on strengthening the exportable supply, improving competitiveness, and facilitating access to international markets for Colombian companies.

In summary, although Colombia has made progress in signing FTAs, there is still a long way to go to maximize its export potential. A strategic, coordinated approach with a long-term vision is required to turn these agreements into effective tools for the country’s economic development.

Challenges to be overcome to become for Colombia to become a leader in international trade

Many challenges hinder investment and trade, among which are the lack of legal certainty, high country costs, and red tape.

Starting with legal certainty, this issue is of utmost importance because, without it, it is very difficult to become a power.   Legal instability, generated by frequent tax reforms and a fluctuating political environment, discourages investment and hinders long-term planning.

High country costs, due to factors such as inadequate infrastructure, expensive labor, and high taxes, make Colombian companies less competitive in the international market.

On the other hand, red tape, characterized by excessive bureaucracy and slow administrative processes, increases operating costs, discourages the creation of companies, and hinders the daily lives of citizens. Reducing red tape is essential to attract foreign investment, boost economic growth, and improve the quality of life of the population.

To meet these challenges, a joint effort by the government, the private sector, and civil society is required. Measures such as the simplification of procedures, the promotion of legal certainty, and investment in infrastructure are needed. Only through a comprehensive and coordinated approach will it be possible to create an environment conducive to investment and trade, which will result in greater economic development and well-being for all Colombians.

Sustainability and the multilateral trading system

The future of international trade is bleak.   The WTO has not addressed the issues head-on: although there has been tension between environmental and trade issues, the WTO has been seen as environmentally unfriendly.  Almost all statements on sustainability issues become unattainable dogmatic issues. The principle of common but differentiated responsibility has not been effectively recognized. The quarrel between developed and less developed countries is that economic requirements tax developing countries when they do not need such taxes, as each country has different environmental needs.  It is of no use that these countries, which are the most heavily taxed, have to devote their resources to controlling emissions while countries like the United States and China, the countries that pollute the most, do not.

If sustainability measures and standards are not addressed multilaterally and the WTO does not address these issues, what will happen in the future is that WTO member countries will begin to adopt de facto policies that they can attempt to impose unilaterally.

Integrations Regime: To copy or not to copy the U.S. Regime

It should be noted that, in the area of commercial competition, the realities of the countries are not the same, especially about mergers.  The United States currently has new guidelines to approve business concentration operations, which are those operations that occur when a competitor integrates, merges or acquires another competitor and disappears or when a company buys or acquires, merges, or integrates with productive processes. The United States today has a great obsession to combat the concentration of companies and it turns out that due to the size of its economy, concentration is not usual.

Therefore, the political regime there has always focused on combating market power as it is considered a threat to freedoms and democracy. However, it is inevitable to have concentrated markets. Therefore, it is not wise to concentrate competition policy on avoiding concentration; on the contrary, Colombia should focus its policies on achieving greater efficiencies, and on seeking to reduce diseconomies of scale. If we were to copy the same policies of the United States, we would be achieving the opposite.

It is dangerous to copy models from other realities.

Competitiveness

The main flaws that prevent Colombia from being competitive are that we have not studied in depth how to reduce the country’s cost, which is the most serious issue. Likewise, the environment is not being taken into account and we depend on it. It is necessary to train people in intermediate careers, we need higher technology products, and we need infrastructure.

The mentality is also essential; we have a privileged geographical position, we have privileged natural resources and we have debated ourselves discussing in circular arguments, missing opportunities. It is not enough to have government policies, we need State policies; there must be inter-institutional coordination.

Informality

There must be a State policy and an adequate legal framework. A Colombian spends an average of 7 hours doing paperwork, so the paperwork implies taxing activities and making prohibited even many legal activities. As long as the paperwork is not reduced, it is very difficult to formalize the country because it costs a lot to do so.

Competition and technology

It may or may not be necessary to change competition laws due to new technological advances. Today we are already living in a situation that is here to stay; technology is disruptive and has changed and overwhelmed the legal framework. The problem is that technology is advancing at a dizzying pace, making it impossible to change regulations daily. Here, the lawyer’s work is fundamental because it will be his duty to help the client develop a legal framework that may be precarious and insufficient in some cases.

Rimon has 50 offices across five continents. The firm is widely known as being at the vanguard of legal innovation. The firm has been repeatedly recognized by the Financial Times as one of North America’s most innovative law firms. The firm’s Founding Partners were both named ‘Legal Rebels’ by the American Bar Association’s ABA Journal and have spoken on innovations in the practice of law at Harvard and Stanford Law Schools. Rimon and its lawyers have also received numerous awards for excellence, including from Best Lawyers and Chambers.