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Democrats and Free Trade


Former US Treasury Secretary Larry Summers once said that United States could never have a sensible foreign policy as long as one of its political parties opposes free trade while the other shows little regard for multilateral institutions. Events today in Washington make him look prescient. The World Bank remains in turmoil because the Bush Administration gives greater importance to its loyalty to the Bank's diminished president than it does to the health of the institution. A Democratic-led Congress may soon upend the US trade agenda in Latin America.

Clearly, Washington's trade strategy was stumbling before the Democrats took control of Congress in January. Its most ambitious goal-a hemisphere-wide free trade area-has long been stalled, while opposition to free trade has stiffened in both the US and Latin America. Still, the trade agenda has been one of the few elements of recent US policy that has produced some significant advances.

When Bush took office in 2001, Mexico was the only Latin American country in a free trade arrangement (FTA) with the US, and negotiations had only just begun for a second accord with Chile. Today, the US has FTAs with 11 Latin American nations, although the fate of three of them with Colombia, Peru, and Panama — is still uncertain as they await ratification by the US Congress.

One or more of these FTAs may eventually be ratified, but none as it was initially signed. The new Democratic leaders of Congress will not allow a vote on them unless stronger labor protections and a few other items are added. What the Democrats most want is for the FTAs to require US trade partners to adopt the standards of the International Labor Organization (ILO). The Bush Administration and key congressional Democrats are now negotiating the issues, but the outcome is very uncertain. Both sides are less concerned about the Colombia, Peru, or Panama FTAs, than they are about the precedent that will be set for future trade treaties.

If Democratic and Republican leaders in Washington can find common ground, then the governments of Colombia, Peru, and Panama will each have to decide whether the labor conditions are acceptable or not. It will be a take it or leave it situation. None of the three countries will not be able to secure any significant changes.

Finally, the new provisions will have to gain formal legislative approval in each country. Even with the new provisions, there is no guarantee that the FTAs will be ratified by the US Congress. The vote will be tight. The six-nation Central American Free Trade Accord (CAFTA) passed Congress by only two votes, with only 15 (of more than 200) Democrats voting yes . Sure, the labor protections will attract more Democratic support but some Republican votes will be lost. Moreover, President Bush and the Republican leadership of Congress are politically weaker and more divided — and less able to deliver votes — than at the time of CAFTA's passage.

The Colombia FTA is in greatest danger. Some in Congress are intent on showing their concerns about recent developments in Colombia by opposing the FTA, even as they appear likely to vote for renewed support for some form of Plan Colombia (which has a more robust constituency because it involves anti-terrorist, anti-drug funding, not support for increasingly unpopular free trade arrangements).

The Colombia government should do what it can to make clear that it is not indifferent to US concerns and is working to address them, but that will not change many FTA votes at this point. The disagreements in Washington, it is discouraging to note, are only marginally about US policy in Colombia or Latin America. They mostly reflect internal debates about trade and globalization, about whether the US should be a more or less open economy, and about how the US should be treating its own workers during a period of rapid technological and institutional changes.

Hardly anyone in Washington would disagree that US-Latin American relations have badly deteriorated during the past half a dozen years of a Republican Administration. It is ironic that now, with the Democrats having taken over Congress, the situation may become worse. By turning down or delaying indefinitely the FTAs, Congress will make the US appear even less reliable as a partner and ally, even on an issue it has strongly advocated. Unfortunately, that just does not seem to be an important concern in Washington.

Peter Hakim is president of the Inter-American Dialogue. This column originally appeared in El Tiempo, Colombia.

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