Peace, fiscal reform would help Colombia draw investors: U.S. official

October 20, 2016 4:32 PM EDT

U.S. Commerce Secretary Penny Pritzker speaks during an interview with Reuters in Kiev, Ukraine, September 29, 2016. To match Interview UKRAINE-USA/TRADE REUTERS/Valentyn Ogirenko

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By Julia Symmes Cobb

BOGOTA (Reuters) - Colombia would attract more investment from U.S. companies if it ends a five-decade war and solves fiscal challenges, U.S. Commerce Secretary Penny Pritzker said on Thursday, amid concern from investors about tax reform and a failed peace referendum.

The Andean country is already an attractive market for U.S. companies, Pritzker told Reuters during a visit to meet President Juan Manuel Santos and business leaders, but investment would be bolstered if fiscal changes are made, peace with Marxist rebels is reached and legal issues like pharmaceutical regulations are clarified.

"It's a market U.S. companies want to invest it, they like it, but they're very concerned right now with the uncertainty given these number of issues that we've raised," Pritzker said in an interview in Bogota.

"If Colombia has a lasting peace agreement and has addressed these market access issues and has a solid credit rating because it's dealt with its fiscal reform ... that makes Colombia a very competitive market," she added.

Colombian voters rejected a peace deal with the Revolutionary Armed Forces of Colombia (FARC) rebels in a surprise decision this month, sending the government scrambling to salvage the accord.

"Any business wants greater certainty and peace will lead to greater certainty and peace will lead to greater investment," Pritzker said.

Santos hopes to pass a tax reform sent to Congress on Wednesday that would raise revenue to 3.2 percent of gross domestic product by 2020, expand the tax base and raise value added duties.

The reform faces an uphill battle in Congress, where lawmakers from several opposition parties have declared they will vote against it.

"We really applaud dealing with fiscal reform," Pritzker said, though she has no position on specific tax reform proposals.

Colombia has a reputation for strong macroeconomic management, she added. "This just reinforces that reputation and that's good for more trade, that's good for more investment."

Colombia will also need to communicate more effectively with industries as diverse as liquor producers and pharmaceutical makers to ensure companies understand taxation and regulatory issues, Pritzker added.

Colombian authorities have tussled with Swiss drugmaker Novartis over the price of cancer drug imatinib, though they stopped short of overriding its patent.

"The government here knows the issues and is focused on trying to address them, and it's not running from them or denying them," said Pritzker, a wealthy businesswoman and one-time campaign co-chair for U.S. President Barack Obama.

(Reporting by Julia Symmes Cobb; Editing by Helen Murphy and Leslie Adler)

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