Colombia is an important supplier of coal to European markets and although Colombian output is small compared to the United States and China, it is a major player in the seaborne coal export trade since those countries consume much of their own production for electricity. After oil, coal is Colombia’s main export. Drummond Co. is Colombia’s No.2 coal miner exporting 26 million tons of coal in 2012, about one-third of the national total.
The United States proposed the enactment of a Free Trade Agreement (FTA) with Colombia in 2004. The United States said that, by lowering the tariffs in a few markets and by making the majority of the other markets entirely duty-free, it could become more competitive. While the Colombian Government responded positively to such a contract, significant groups declared their opposition.
In January 1997, the Colombian government under President Ernesto Samper declared a state of economic crisis. They planned to cut spending, increase taxes, and reduce wage increases in order to reduce the budget deficit, which had reached $4.4 billion in 1996. They developed additional plans to privatize industry, including selling state-owned mining and electrical companies. President Samper had previously supported social welfare programs and labor unions but said that the austerity measures were necessary because there was simply no money available.
In 2012, Colombian coffee prices fell 35% on the international market while the Colombian peso appreciated 10%. A combination of crop disease, bad weather, and unfavorable currency rates forced growers in Colombia to sell their coffee at a loss. Many coffee growers then found themselves spending more on fertilizers and supplies than what they were making for their coffee.