As President Obama seeks to boost the U.S. economy and build stronger ties with our friends abroad, he could advance both goals at once by urging Congress to pass the pending trade agreement with our South American neighbor, Colombia.

U.S.-Colombia FTA Benefits

The U.S. and Colombia signed a free-trade agreement in November 2006. Every month it languishes in Congress is another month of lost opportunities to export more U.S. goods and build ties to a key Latin American ally.

Upon enactment, the agreement would immediately eliminate duties on more than 80 percent of U.S. exports to Colombia of consumer and industrial products; remaining tariffs would be phased out over the next 10 years. The U.S. International Trade Commission estimates the FTA would boost U.S. exports of manufactured and farm goods by $1 billion annually.

Due to the Andean Trade Preferences Act, most Colombian exports to the U.S. already enter duty-free. Nevertheless, the FTA would make Colombia’s access to the U.S. market permanent, boosting investment and growth in that country. And by reducing and eliminating Colombia’s tariffs, the agreement would deliver the “level paying field” that critics of trade are always demanding.

More importantly, the agreement would strengthen relations with Colombia, which under President Alvaro Uribe has been a bulwark in the region against terrorism and the authoritarian socialism of Venezuela’s Hugo Chavez. Rejecting the agreement would send a signal to the region that the U.S. does not stand by its friends.

Opposition Ignores Improvements

Organized labor is a main U.S. detractor. Reflexively opposed to almost all trade liberalizing agreements, the AFL-CIO complains that Colombia is unworthy of the agreement because of continuing violence there against union members. This ignores the dramatic progress made under Uribe against violence of all kinds.

For example, since he took office in 2002, the government has disarmed 30,000 paramilitary fighters and largely defeated the left-wing guerrilla movement known as FARC.

Consequently, the murder rate there has been cut by 40 percent, and murders of union members by 80 percent. One study showed that union members in Colombia are actually at less risk of murder than nonunion members.

In a February visit to EAFIT University in Medellin, I was struck by what a normal city it has become. A decade ago, it was the epicenter of drug cartel and FARC violence. Today it is a bustling commercial, cultural and tourist center.

The murder rate in Medellin has fallen by more than 90 percent since the early 1990s, to the same level as that of Washington, D.C. Today, a union member is probably safer walking the streets of Medellin than those of our own capital.

The students I met at the university are eager to build ties with the U.S. Medellin’s former mayor and possible presidential candidate, the blue-jeans-clad Sergio Fajardo, told me that, for Colombia, “Trade is an opportunity, not a problem.” What message will it send to the current and rising generation of leaders in Colombia if the U.S. Congress spurns an opportunity to deepen commercial ties and not recognize dramatic progress already made there?

Rejecting the FTA Will Be a Setback

U.S. Trade Representative Ron Kirk warned Congress last month not to “set the bar too high” for Colombia with vague demands for further reductions in violence. Kirk expressed hope that the same Democratic Congressional leaders that put the agreement on hold last year would bring it up for a vote by the end of 2009. The sooner the better.

Rejecting the Colombian FTA would not save a single life in that country. To punish the Colombian people and its government for past problems now overcome would be an insult to our friends and a major setback for the Obama administration.

The potential benefits of the Colombia FTA are far greater than those of the Panama FTA Kirk has been urging Congress to pass. The administration needs to put at least as much, if not more, into promoting the Colombia agreement.

This article appeared in Impact Analysis, July-August 2009.
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Daniel Griswold
About The Author Daniel Griswold [Full Bio]
Daniel Griswold is senior research fellow and co-director of the Program on the American Economy and Globalization at the Mercatus Center.




www.mercatus.org


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