This work analyzes the phenomenon of premature deindustrialization for Colombia
and for other seven Latin American countries. Through a Koyck transformation model
for the Colombian case, and a panel data fxed efects model for the complete sam‑
ple of eight Latin American countries, this work documents that the fall in the aver‑
age efective tarif in the region is the main economic explanation of the premature
reduction in the manufacturing share. Also, it provides evidence that relates negative
performance of manufacturing to foreign investment fows and to Dutch disease. On
the other hand, taking into account the importance of manufacturing on productive
sophistication and economic development, this work applies product space methodol‑
ogy in order to determine strategic manufacturing sectors for the establishment of a
selective industrial policy for the Colombian case. As a result, the sectors that must be
encouraged by the Colombian State are manufactured intermediate goods, mainly
goods in the chemical industry

• Trade liberalization and premature deindustrialization in Colombia