This document is presented as the final paper for the course “ Value
chains nel settore agro-alimentare” to professor Domenico Scalera .
Introduction
Global value chains have demonstrated benefits for developed countries
by reducing labor costs and obtaining cheaper inputs from developing
nations. This has allowed companies from industrialized nations to
specialize in high-value functions within the production chain, such as
design, engineering, and marketing—key elements of the “Smile Curve” in
the global chain.
Developing countries, on the other hand, have also experienced
benefits, such as technology transfer, increased production,
standardized processes, and employment growth. However, participation in
global value chains also poses challenges for these countries,
particularly when multinational companies exploit their dominant
position and local institutional weaknesses. Such abuses may include
pollution, precarious working conditions, land dispossession, financing
of armed groups, cartel formation, anti-competitive practices, and
corruption. Some multinationals have even politically influenced parties
favorable to their commercial interests, a practice prohibited in many
countries, including Colombia.
In Colombia, international trade and participation in global value
chains have brought both benefits and challenges. Problems often arise
due to imbalanced negotiations between powerful multinationals and local
economic agents in contexts with weak institutions, making it difficult
to enforce laws. This document presents an analysis of Colombia’s main
export and import products and the most influential multinational
companies in these sectors. Additionally, it reviews news from 2000 to
the present about multinationals that contribute the most to the
national GDP.
The project was carried out using the R programming language, known
for its power and flexibility in data analysis. The results are
presented in an R Markdown document, a tool that dynamically text and
graphics. R Markdown facilitates the creation of interactive reports
where graphics can be expanded and data points examined in detail,
something that is not possible with static files.
1) Foreign Trade in Colombia
1.1) Exports
Colombia’s international trade has been primarily tied to the primary
sector. In 2023, traditional exports—including oil, ferronickel, coal,
and coffee—reached USD 28.43 billion (FOB), accounting for approximately
57% of national exports.
Among non-traditional exports, products such as legumes and fruits,
live animals, rubber, oilseeds, textile fibers, essential oils,
clothing, and metal manufactures stand out.
The primary destination for these exports is the United States, which
accounted for USD 13.29 billion FOB in 2023, about 27% of Colombia’s
total exports. Other significant destinations include Ecuador, Mexico,
Peru, Japan, Venezuela, Germany, and Belgium.
When analyzing exports by economic bloc, the United States remains
Colombia’s primary trade partner, followed by countries of the Latin
American Integration Association (ALADI), and to a lesser extent, the
European Union, the Andean Community (CAN), and Mercosur.
It is evident that Colombia’s participation in the global value chain
is centered on the production and extraction of natural resources, which
adds relatively low value in the global chain. The United States is its
main trading partner, followed by ALADI and the European Union.
It is evident that Colombia’s participation in the global value chain
is centered on the production and extraction of natural resources, which
adds relatively low value in the global chain. The United States is its
main trading partner, followed by ALADI and the European Union.
1.2)Imports
In the past 24 years, the industrial sector has dominated imports in
Colombia, representing 92% of total imports in 2023, followed by the
agricultural sector (6%) and the mining sector (2%). This demonstrates a
marked dependency on industrial and technological goods from foreign
trade.
Among the main categories in the industrial sector, chemical
substances (especially refined petroleum) comprise 14% of imports,
followed by computers and electronics (10%), processed foods (8%),
manufacturing machinery (8%), and vehicles (8%). Together, these five
categories account for around 50% of imports.
The main suppliers of these products are the United States (USD 15.99
billion), China (USD 13.57 billion), Brazil (USD 4.04 billion), and
Mexico (USD 3.09 billion CIF).
The influence of the United States and China on Colombian trade is so
significant that it exceeds the combined value of imports from ALADI,
the European Union, CAN, and Mercosur. This trend highlights Colombia’s
role in global value chains as an extractor of non-renewable natural
resources and agricultural products, while its imports are centered on
higher-value goods, such as refined fuels. This dependency results in
high gasoline prices domestically despite Colombia’s status as an oil
exporter, where gasoline prices are almost on par with the U.S. ($0.96
per liter in Colombia vs. $0.98 per liter in the U.S.), notwithstanding
the significant difference in purchasing power.
2) Main Multinationals in Colombia’s Global Value Chain
As the second part of this report, we present a sentiment analysis of
news coverage over the past 24 years on the international companies with
the largest share of Colombia’s export market. The primary objective is
to highlight the perception of these companies in the media, both
positive and negative, as reported in the news. This analysis aims to
shed light on the adverse effects faced by a developing country like
Colombia, which, while it has indeed benefited from foreign trade and
value chains, has also been impacted by the abuses of certain companies.
These issues, coupled with institutional weaknesses, have exacerbated
many of the shortcomings in international trade—issues that are often
overlooked in academic literature and underreported in developed
countries.
The selected companies by sector are:
Oil: Occidental Petroleum (OXY), Chevron, BP (British
Petroleum)
Coal: Drummond Company, Cerrejón (Glencore)
Nickel: Cerro Matoso (South32)
Banana: Chiquita Brands International
Coffee: Nestlé
The data was gathered from the national newspaper El Tiempo, the
oldest and one of the most widely read publications in Colombia,
covering the period from January 1, 2000, to October 27, 2024. The
search was conducted by querying the names of multinational companies,
with news articles filtered by judicial and investigative sections and
relevance. A total of 20 news articles were collected, distributed as
presented in the following table.
After cleaning the texts, the most frequent terms identified were
“financing,” “oil,” “paramilitaries,” “payments,” “state,” “Colombia,”
and the companies’ names. The words “paramilitary” or “paramilitarism”
appeared three times in connection with the Chiquita Brands label and
twice with Drummond, due to accusations that both companies financed
paramilitary groups in Colombia. In Chiquita’s case, the company was
found guilty, as shown in the following report:
“This Monday in Florida, United States, a group of jurors ruled
against the multinational Chiquita Brands, finding it civilly liable for
financing paramilitary groups in Colombia in the 1990s” (El Tiempo).
Furthermore, environmental complaints and investigations were
reported against Occidental Petroleum, British Petroleum, and Drummond,
as illustrated in the following example:
“U.S. oil company [Occidental Petroleum] announced it would appeal
within a week against a ruling that suspended exploration of the Samoré
block, located near an Indigenous reserve in Colombia” (El Tiempo).
Additionally, a case of unfair competition (gasoline cartelization)
was reported, implicating Chevron Petroleum Company:
“Authorities continue to make decisions regarding El Tiempo’s
investigation into the war for control of gasoline distribution in
Nariño. The Superintendency of Industry and Commerce (SIC) has opened an
investigation and issued charges for possible obstruction of free
competition against major market players. The indictment mentions
Organization Terpel S.A., Chevron Petroleum Company, Biomax
Biocombustibles S.A., Primax Colombia S.A., and the Association of
Retail Fuel and Petroleum Product Distributors (Adiconar) Nariño as part
of those investigated.”
Not all news was negative, however, as a significant portion focused
on positive developments such as new investments, corporate mergers, and
high profits, as shown below:
“Chevron Petroleum Company will merge with Guajira Gas Services in
Colombia, according to information provided to the Financial
Superintendency. The integration of Chevron Petroleum Company and
Guajira Gas Services branches in Colombia will result in an entity with
assets totaling 1.24 trillion pesos” (El Tiempo).
This can be verified in the sentiment analysis presented below, which
shows that approximately 30% of words in the collected news items were
associated with “Trust” (positive), compared to 20% for “Anticipation,”
14% for “Anger,” and 12% for “Fear.”
In conclusion, this study provides an overview of Colombia’s role in
the global value chain, primarily focused on the production and
extraction of natural resources (oil and coal) and its role as a
consumer (importer) of manufactured goods (especially chemicals and
gasoline). Additionally, the analysis includes a review of news on the
main multinationals involved in Colombia’s top export products (oil,
coal, coffee, and ferronickel). The findings reveal that these companies
are frequently in the news for their high levels of investment in the
country; however, certain negative aspects were also identified, such as
financing of paramilitarism, environmental impacts, unfair competition,
and partial non-compliance with legal obligations towards workers.