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The Case for the Colombia FTA

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Even Lou Dobbs could love the Colombia FTA, which rectifies what is currently an unbalanced, one-way free trade relationship.

BY CHRISTOPHER A. PADILLA

When I visited Medellin, Colombia with Secretary Gutierrez and several Members of Congress last fall, I expected to see a city of violence and mayhem, something like the image of Colombia that we have from American movies. Instead, what I saw was a vibrant city of people engaged in the global economy – growing flowers, making apparel, providing services – in an atmosphere of increased safety and peace. I met former paramilitary members who came in from the jungle, laying down their weapons in exchange for jobs, education, and a chance to raise a family. What was once the most violent city on the planet now has a murder rate lower than Baltimore’s. In Colombia, terrorism, violence, and instability are being replaced by the rule of law, investment in people, and free markets.  The transformation is nothing short of remarkable.

Opponents of the Colombia FTA raise concerns about violence against labor union leaders. Indeed, Colombia has been a dangerous place to be a union leader – it has also been a dangerous place to be a schoolteacher, a farmer, or a government official. Colombia has a long history of violence in its society, driven by a violent terrorist insurgency and the drug trade. But the level of violence against union leaders is now far lower than the general rate of violence in the population, and both rates have declined dramatically since 2002. Critics only point to a single snapshot in time, wanting to compare Colombia to countries not in the midst of a struggle against violent terrorists. Colombia is successfully reducing violence by providing social and economic opportunities to former guerillas, protecting union leaders, and taking a tough stance against FARC terrorists.

UNION ASSASINATIONS DECLINE

President Uribe’s security strategy has led to a two-thirds decline in the number of assassinations of union members over the past six years. Importantly, the Colombian government has devoted considerable resources to protecting union officials and to prosecuting those who have harmed them in the past.  President Uribe has vowed to do whatever it takes to build upon the tremendous progress that has been made.

Opponents of the Colombia FTA know they cannot win this debate on the merits so they hide behind generalities about “more progress on labor violence” – even if they cannot identify specifically what that means, and have not taken the time to see for themselves what is going on in Colombia. Opponents have set a standard so vague that no nation could meet it and will always define progress in a way that will put its attainment just out of reach. That’s because the real goal is not progress, but defeat of free trade agreements that special interest groups eternally oppose.

But (...) make no mistake: Defeating the Colombia FTA will not save the life of a single union leader in Colombia. Defeating the FTA will not give a single poor Colombian hope for a better future. Defeating the FTA will not hasten the end of a terrorist insurgency. In fact, defeating the FTA could drastically set back the remarkable progress made by this remarkable country – progress made despite historic challenges, while staying true to democracy and free markets. The choice we face is clear: whether to support opportunity and hope in Colombia – or to condemn an ally to poverty, violence, and hopelessness.

ONE-WAY FREE TRADE

While the security arguments for the Colombia FTA are very strong, the economic case is equally compelling. It is not widely known that the United States already has free trade with Colombia – but it is only one-way free trade.  Beginning in the mid 1990s and continuing until today, Congress has voted routinely and overwhelmingly to throw open the U.S. market to duty-free imported Colombian products coming into the United States.  The Colombia FTA is a trade agreement even Lou Dobbs could love, because it rectifies what is currently an unbalanced, one-way free trade relationship. (...)

Ninety-two percent of imports from Colombia currently enter the United States completely duty free.  It has been that way for 16 years, since Congress first passed the Andean Trade Preferences Act that gave Colombia access to our market as a way to reduce poverty and fight the drug trade.  (...) Members of Congress from both sides of the aisle (...)  voted strongly in favor of these one-way preferences the last time they were up for renewal.  Don’t believe me?  Here is a shopping bag of products.  Let’s compare some prices:

  • [A] can of Colombian coffee comes into the United States duty-free.  But this bottle of Pepsi, made in the USA, pays a stiff 20 percenttax when sold in Colombia. 
  • [A bouquet of] beautiful Colombian flowers – a major Colombian export – come into our market and pay zero tariffs.  But this U.S.-made fertilizer, which helps those flowers grow, is charged up to 15 percent when exported to Colombia.
  • [A] bag of carrots comes into the United States – and onto your dinner table – without paying any U.S. tariffs.  But [a] tractor, made by Caterpillar in East Peoria, Illinois, faces a 10 percent duty when sold to a Colombian carrot farmer.
  • [A] Pennsylvania apple pays a 15 percent tariff when sold in Colombia.  Meanwhile, [a] Colombian banana enters the United States duty-free. 

In fact, even [a] paper grocery bag containing my examples is subject to a major tariff when it is sold in Colombia.  Now, I’ll bet you’re thinking that this isn’t fair.  But the good news is that in our shopping bag we also have a great coupon that will eliminate all of these taxes on our products, in most cases immediately.  The coupon isn’t from the Sunday papers… it’s called the U.S.-Colombia Free Trade Agreement, and it deserves a vote in the Congress of the United States.

I say to the opponents of the FTA: Many of you supported unilaterally opening America’s market to Colombian imports at a time when violence levels were much higher than they are today. So why do you oppose opening Colombia’s market to American-made products at a time when violence is down dramatically?  (...)

Christopher A. Padilla is the U.S. Under Secretary for International Trade. This column is based on his prepared remarks at the "Outlook on the Americas 2008'' luncheon organized by the Association of American Chambers of Commerce in Latin America (AACCLA), in Coral Gables, Florida on January 24, 2008

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