Colombia has a free market economy with major commercial and investment ties to the United States. Transition from a highly regulated economy has been underway for more than a decade^{[citation needed]}.

In 1990, the administration of President César Gaviria Trujillo (1990–94) initiated economic liberalism policies or "apertura economica" and this has continued since then, with tariff reductions, financial deregulation, privatization of state-owned enterprises, and adoption of a more liberal foreign exchange rate. Almost all sectors became open to foreign investment although agricultural products remained protected.

The original idea of his then Minister of Finance, Rudolf Hommes, was that the country should import agricultural products in which it was not competitive, like maize, wheat, cotton and soybeans and export the ones in which it had an advantage, like fruits and flowers. In ten years, the sector lost 7,000 km² to imports, represented mostly in heavily subsidized agricultural products from the United States, as a result of this policy, with a critical impact on employment in rural areas. Still, this policy makes food cheaper for the average Colombian than it would be if agricultural trade were more restricted.

Colombia ( /kəˈlʌmbiə/ kə-LUM-biə, or /kəˈlɒmbiə/ kə-LOM-biə), officially the Republic of Colombia (Spanish: República de Colombia [reˈpuβlika ðe koˈlombja]), is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the northwest by Panama; to the north by the Caribbean Sea; to the east by Venezuela and Brazil; to the south by Ecuador and Peru; and to the west by the Pacific Ocean. Colombia has maritime borders with Ecuador, Panama, Venezuela, Jamaica, Haiti, the Dominican Republic, Honduras, Nicaragua and Costa Rica. Colombia is the 26th largest country by area and the fourth largest in South America after Brazil, Argentina and Peru. With over 46 million people, Colombia is the 27th largest country in the world by population and has the second largest population of any Spanish-speaking country in the world, after Mexico. Colombia is a middle power, with the fourth largest economy in Latin America, and the third largest in South America. Colombia is famous for the production of coffee, flowers, emeralds, coal, and oil. All of these products make up the primary sector of economy.