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Last week, the government issued Decree No. 1047, which officially bans the export of Colombian coal to Israel. In early June last year, the President of the Republic, Gustavo Petro, announced that Colombia would suspend the sale of minerals to Tel Aviv “until the genocide stops.”
Official documents support the use of the veto in case of “humanitarian severity of a Palestinian release”, while the president defends it because “they are using Colombian coal to make bombs to kill Palestinian children”. This business decision of the Petro government is not only futile and counterproductive, but it could also generate serious legal risks. Not to mention that Colombia’s trade and export policies set a terrible precedent in the eyes of international investors.
The ban is futile for many reasons. The first is diplomatic. As the head of the country’s foreign policy, President Petro has the power to align the country with the bloc that is against Israel. In fact, not only has he made anti-Semitic remarks on several occasions, he also severed diplomatic relations with Tel Aviv. Thanks to this president, today Colombia occupies a prominent position among the Latin American countries most hostile to Israel. There is no need to enforce this ban, because words alone are enough.
Secondly, the impact of this decision will be greater and more onerous on Colombia and on producing regions such as La Guajira and Cesar than on Israel, which will simply buy this commodity from another country that supplies it. The Colombian economy will not receive about 650 billion pesos in taxes, royalties and other contributions.
The blockade of Colombian coal against Israel is also counterproductive. First, the sector that produces this mineral depends on these exports for social investment and financial resources.
The losses for Guajiros and Caesarenses are about 100 billion pesos. Nothing in the decree will promote or facilitate the urgent transformation of the regional economies away from coal and towards other modes of production. That is, these regions are being punished for brandishing pro-Palestinian, anti-Israeli ideological positions, but they still do not enjoy the opportunities they deserve because they voted overwhelmingly for the current president Petro and his promise to end coal.
Secondly, Colombia has a free trade agreement with Israel and the contracts and commitments of the coal mining companies will be harmed by the decision. That said, it could lead to a legal battle in the High Court and a request for international arbitration.
A country’s trade policy is not made in an impeccable chamber. President Petro’s message to all business partners, potential investors and foreign companies producing in Colombia is clear and loud: ideologies and positions on international events take precedence over commercial agreements and commitments.
It goes without saying how damaging this information is to investor confidence and legal security.
Francisco Miranda Hamburg
framir@portafolio.co
X: @pachomiranda
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