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November 2008

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The U.S.-Colombia Free Trade Agreement, which Congress has thus far refused to ratify because of trade union opposition, can bring economic benefits to both countries while promoting peace and improved human rights in Colombia, according to this essay. – Ed.

Why the Colombia Free Trade Agreement is Right for Colombia and America

The wealth and prosperity of the American economy was not born of isolationism and fear of the wider world, but of an innovative, risk-taking, international spirit that has made the United States the world’s only superpower.  As with every boom, there is a bust, and America is facing her fair share of them lately.  From the sub-prime mortgage meltdown to the failure of seemingly unsinkable financial institutions, the American economy is being battered with hurricane force winds of financial uncertainty.  She is also a nation reeling from a disastrous terrorist attack and fighting a challenging war on terrorism. 

From the first shots of the Revolutionary War, America has sought to ensure that individuals have the rights to life, liberty, and the pursuit of happiness, and that all people deserve the chance to prosper in a free, democratic economy which rewards hard work and promotes equal opportunity.  In order to establish diplomatic ties necessary for America’s message of political, social, and government reform to spread throughout the world, and to encourage much needed economic growth at home, the United States must aggressively pursue a policy of establishing bilateral free trade agreements.

Text Box:    (CIA World Fact Book) One such agreement spearheaded by President Bush but faltering in Congress is the Colombia Free Trade Agreement (CFTA).  By increasing trade between the United States and Colombia, the CFTA encourages economic growth and promotes democratic and social reform in a nation plagued by insurrection and corruption.  Opponents of the CFTA have grossly underestimated its power to reform injustices they present as evidence for rejecting it.  For the continued prosperous, safe future of the United States and Colombia, the Colombia Free Trade Agreement must be approved with the utmost haste.

U.S.-Colombia Trade Today
Colombia is a country of 45 million with a Gross Domestic Product (GDP) of $172 billion growing yearly at 7% (World Fact Book).  The United States imported $9.6 billion from Colombia in 2006, with a concentration in petroleum, coal, coffee, and gold.  United States exports to Colombia totaled $6.9 billion, and consisted largely of corn, chemicals, machinery, and wheat (USITC).  Colombia was the 29th largest market for U.S goods in 2006, out of a total of 230 markets (International Trade Administration).

The roughly 1,000 large and 8,000 small to medium-sized U.S. businesses that export to Colombia do so under an extremely egregious tariff system.  Ninety-seven percent of U.S. exports are taxed; motor vehicles among the hardest hit at 35%.  Text Box: Consumer Goods	14.6% Building Products	13.2% Transportation Equipment	12.7% Paper and Paper Products	12.5% Infrastructure and Machinery	11.1% Metals and Ores	9.2% Information Technology Equipment	8.2% Chemicals	7.8% Autos and Auto Parts	7.4%  Average Colombian Tariffs on Imports of Goods from the United States (export.gov)  In remarkable fashion, the Andean Trade Preference Act and the Generalized System of Preferences trade agreements allow over 90% of Colombian exports to enter the United States duty-free (USTR: The Case).  This tariff imbalance stifles U.S. exports to Colombia, preventing job growth and weakening the U.S. economy.

Opening New Avenues of Trade
The Colombia Free Trade Agreement levels the playing field by opening the gates of the Colombian economy to America.  Upon enactment, the CFTA overnight will allow over 80% of U.S. exports to enter Colombia duty-free.  In 10 years, all remaining tariffs will be eliminated, allowing American products to compete in the Colombian market.  The United States International Trade Commission (USITC) reports that the CFTA will increase yearly exports to Colombia by 16% to $8 billion and imports by 5% to $10 billion.  While the CFTA will only increase the United States GDP by $2.5 billion or 0.05%, no amount of growth is insignificant.  U.S. exports of meat, grain, rice, corn, soybeans, animal feeds, chemicals, rubber, and plastics are expected to see substantial gains under the CFTA, with grain exports increasing at a rate of 55-77% and soybean exports at a rate of 30-55%.  By eliminating barriers that once suffocated trade, the CFTA will open up new markets to American businesses, accelerating job growth and expanding the U.S. economy.

The CFTA is not the first trade agreement of its kind. Bilateral trade deals have a proven track record of success, expanding the U.S. economy and improving the quality of life for the partner nation.  The U.S.-Chile Free Trade Agreement, enacted on January 1, 2004, skyrocketed U.S. exports to Chile by 33% in the first year.  Since 2004, trade between the two nations has tripled.  From 2003 to 2006, Chile’s per capita income doubled, and unemployment dropped from 8.1% to 6% (Latin America Trade Coalition).

The Case Against the CFTA
The strongest voices of opposition against the Colombia Free Trade agreement resonate from the Democratic Party and trade unions.  Their message is clear: the CFTA should be rejected because it rewards a country with a deadly labor history.  The American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) argues that Colombia is the most dangerous place in the world to be a member of a union, reporting that in 2007, 39 union members were murdered.  The Washington Office on Latin America adds that passage of the CFTA will eliminate leverage needed to pressure the Colombian government to improve the condition of human rights in the country.

There is no doubt that Colombia has a history of rampant violence and brutality.  Born out of the Colombian Civil War, rebel Marxist guerrilla groups such as the FARC (Revolutionary Armed Forces of Colombia) and ELN (National Liberation Army) as well as their paramilitary opponents have terrorized the citizens of Colombia for nearly five decades, committing kidnappings, murders, and other atrocities.  Opponents of the CFTA argue that these paramilitary groups target members of unions to suppress the spread of labor reform and to destroy movements threatening their power.  In its report “The Struggle for Workers Rights in Colombia,” the AFL-CIO Solidarity Center describes in detail several murders of union members.  On March 12, 2001, union president Valmore Locarno and vice-president Victor Orcasita, who represented coal mine workers, were pulled off a bus and brutally executed, Locarno on the spot, Orcasita later tortured to death.  Six months later, Gustavo Soler assumed the union presidency; and two weeks later, he too was pulled off a bus and summarily executed.

But the situation is dramatically improving.

Text Box:    President Alvaro Uribe (Euskal Irrati Telebista) Under the leadership of President Alvaro Uribe, who took office in 2002, Colombia is taking an aggressive, renewed stand against both the guerrillas and the paramilitary groups.  An example of this proactive approach is the 2005 Justice and Peace Law, which established a pathway for paramilitary members to demobilize and re-enter society.  Under the law, they must acknowledge their crimes, return stolen land, and pay fines.  Those guilty of serious crimes such as kidnappings and murders may be imprisoned for a period up to 8 years.  Since passage of this law, over 31,000 paramilitary members have demobilized.  In addition, since 2002 more than 10,500 members of FARC and ELN have laid down their arms (USTR: The Path to Peace).  To address the issue of violence against trade unionists, the Prosecutor General’s Office created a special unit to focus on bringing justice to these crimes.  Further gains are being made by the Colombian Ministry of Interior and Justice, whose $39.5 million protection program keeps over 1,950 trade unionists safe.

The Uribe Administration’s efforts have resulted in some impressive reductions in violence.  Since 2002, kidnappings are down 83%, terror attacks are down 76%, homicides are down 40%, and murders of trade unionists are down between 79% and 86% (USTR: The Path to Peace).  The Colombian economy has also seen tremendous growth during this period, with poverty reduced by nearly 20%, unemployment at a 10 year low, and per capita GDP almost double 2002 levels.

Opponents of the CFTA pay little attention to the sweeping reforms President Uribe has achieved.  Speaker of the House Nancy Pelosi remains unimpressed, stating in April 2008 that “despite progress made by President Uribe, Colombia remains a dangerous place to be a labor activist, and for those who commit these acts of violence, there is little threat of prosecution or punishment.  Sustained progress on the ground remains a prerequisite for our support” (Pelosi).  Apparently for Mrs. Pelosi, an 86% reduction in murders over six years does not qualify as “sustained progress.”

When Democrats and union leaders point to the number of union members killed each year in Colombia and refuse to “reward” Colombia with the CFTA, their argument must be qualified against the context of the larger reality.  According to Escuela Nacional Sindical, a Colombian labor rights NGO, over 856,000 Colombian workers are union members, belonging to 2,357 registered unions (Solidarity Center).  Of the 39 union members murdered in 2007, 0.00455% of all union members in Colombia, no data is presented that provides a direct link between union membership and murder.  Granted, as in the case of Messrs. Orcasita, Locarno, and Soler, union members have been targets of guerrilla groups; however it can be inferred that union membership played no part in at least a minority of the 39 killed in 2007.  Opponents of the CFTA are attempting to prove a causal relationship between union membership and murder, but such an argument is not airtight.
Text Box:            Nancy Pelosi     (The Judiciary Report)

Critics of the CFTA miss the mark when they cite Colombia’s current labor condition as a reason for not supporting the trade agreement.  Colombia’s labor condition is the reason why the CFTA is so necessary.  While Colombia has an atrocious human rights record, the Uribe Administration is making significant progress against violence, and with the increased economic activity resulting from the CFTA, conditions will improve further.  The two-way trade of billions of dollars of new commerce will facilitate the immersion of American ideals of democracy, free enterprise, and the rule of law into the culture of Colombia.  American businesses with strong union membership will engage with a new vigor in the country, demonstrating to Colombians how the union-management relationship plays an integral role in the civilized industrial world.  The influx of new capital into Colombia will improve the standard of living and drive job growth, discouraging apathetic youth from joining rebel or paramilitary groups and farmers from participating in the narcotics trade. 

A Plan for Reform
The CFTA contains many provisions that will bring political, social, and government reform to Colombia.  The agreement affirms that both the United States and Colombia agree to abide by the 1998 International Labor Organization Declaration on Fundamental Principles and Rights at Work, to include a prohibition on the worst forms of child labor.  The CFTA additionally establishes a Trade Capacity Building Committee, which will assist Colombia in the adjustment towards more liberalized trade.  The Committee will also develop programs to encourage growth of small and medium businesses and to improve Colombia’s telecommunications and transportation infrastructure.  The CFTA contains provisions to enforce several Multilateral Environmental Agreements, including accords for protecting endangered species, controlling greenhouse gases, and conserving wetlands.  In addition, the CFTA establishes a dispute settlement organization, which mediates labor and environmental disputes arising over the agreement.

The Best Deal for America, the Best Deal for Colombia
On September 20, 2008, President Uribe reaffirmed his country’s commitment to the successful passage of the Colombia Free Trade Agreement.  Uribe’s goal, in his own words, is to infuse Colombia with more confidence – confidence to invest in Colombia, to live in Colombia, to study in Colombia, to find jobs in Colombia. And we support confidence upon three pillars: security with democracy – it means security with democratic values, with pluralism, with freedoms, with dissent. The second pillar is investment – investment with social responsibility, security and investment, create a framework for prosperity. And in a part of prosperity, it is possible to create social cohesion, and social cohesion is the validator for security and for investment (White House).

Text Box:    President Alvaro Uribe and President George W. Bush Joint Press Availability September 20, 2008 (The White House)  President Uribe understands the power of trade to transform a society from chaos to peace and prosperity.  Colombia’s rejuvenated war against guerrillas and crackdown on violence is creating an atmosphere ripe for economic expansion.  The Colombia Free Trade Agreement will use this fertile environment to increase trade between Colombia and the United States, stimulating job growth, reducing poverty, and increasing the quality of life for the people of Colombia.  This renewed drive of economic activity will modernize and liberalize the country, reducing the support for rebels and paramilitary factions and helping bring peace to the region.

WORKS CITED
AFL-CIO Solidarity Center. 2006. The Struggle for Workers Rights in Colombia. http://www.solidaritycenter.org/files/ColombiaFinal.pdf.

AFL-CIO Now Blog.  AFL-CIO Urges Congress to ‘Stop the Colombia Free Trade Agreement. http://blog.aflcio.org/2008/04/ 08/afl-cio-urges-congress-to-stop-the-colombia-free-trade-agreement/.

CIA World Fact Book: Colombia.  https://www.cia.gov/library/publications/the-world-factbook/geos/co.html.

International Trade Administration. U.S. Exports to Colombia: A State Perspective. http://ita.doc.gov/td/industry/otea/OTII/ColombiaFTA/Colombia_index.html.

The Latin America Trade Organization. 2008. Why Support the Trade Promotion Agreements With Colombia and Panama? Look to Chile!
http://www.latradecoalition.org/portal/latc/default.

Speaker Nancy Pelosi (April 7, 2008). Pelosi and Rangel Statement on Administration Sending Colombia Free Trade Agreement to Congress. Press release.
http://speaker.house.gov/newsroom/pressreleases?id=0596.

United States International Trade Commission (USITC). 2006. U.S.-Colombia Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects. Investigation No. TA-2104-023. USITC Publication 3896.
http://www.usitc.gov/publications/pub3896.pdf.

United States Trade Representative (USTR). 2008. Colombia: On a Path to Peace, Justice and Prosperity. http://www.ustr.gov/assets/ Trade_Agreements/Bilateral/Colombia_FTA/asset_upload_file144_13716.pdf.

United States Trade Representative (USTR). 2008. The Case for the U.S.-Colombia Free Trade Agreement. http://www.ustr.gov/assets/ Trade_Agreements/Bilateral/Colombia_FTA/asset_upload_file372_13713.pdf.

The White House (September 20, 2008). President Bush and President Uribe of the Republic of Colombia Participate in Joint Press Availability. Press release. http://www.whitehouse.gov/news/releases/2008/09/20080920-4.html

McCarterClay McCarter is a legislative analyst for the City of Los Angeles.  He holds a B.A. in history from the University of California, Los Angeles and is a member of the Los Angeles World Affairs Council.

 

 

 

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