The Sound and The Fury: Why Opponents of the US-Colombia FTA Miss the Point
DEVELOPMENTS
During a time of immense economic uncertainty, the free trade agreement (FTA) between the U.S. and Colombia, one of America’s staunchest Latin American political allies, may prove the most contentious trade vote put to Congress this year.
The worldwide pursuit of regional trade agreements, which knock down trade barriers faster than their complicated multilateral cousins, has been a high priority for the United States Trade Representative (USTR) during the Bush Administration. In light of this agenda, the US-Colombia FTA was ‘fast-tracked’ in 2003 as part of regional Andean negotiations including Peru, Ecuador, and Bolivia. The bilateral agreement is considered to be particularly attractive to the US given Colombia’s roughly $463 billion GDP.
Despite controversy over Colombia’s labor rights violations, drug trafficking, and continued armed conflict, the FTA negotiations successfully concluded in early 2006 and by November, 2006 the USTR and the Colombian Trade Minister had signed the pact. However, by the time the FTA was put to vote in April of 2008, it had stalled amidst House Speaker Nancy Pelosi’s allegations that the agreement would negatively impact American workers already suffering from overseas job migration. House Democrats further argued that level of violence against labor organizers in Colombia was too high to support free trade. Led by Pelosi, the House passed an unprecedented resolution which delayed the bill indefinitely and gave Pelosi control over the voting timetable. As of last month, the US-Colombia FTA faces an uphill battle to passage, which is ultimately unlikely to serve either nation’s interests.
BACKGROUND
The violence pervasive in Colombia where civil-war has raged for four decades, has played a role in a US-Columbia FTA. Colombia has one of the world’s highest rates of violence, and drug-related crime trails only cancer as the highest cause of death. The nation is a cocaine production hotbed, supplying roughly 90% of U.S. consumption, and is burdened by the Revolutionary Armed Forces of Columbia (FARC) – arguably the oldest and most violent of Colombia’s left-wing rebel groups. It is further beset by right-wing paramilitary organizations, which, along with the FARC, are listed as terrorist organizations by the U.S. and the E.U.
Congressional opponents of the FTA cite these high levels of violence, noting that 2,200 union members have been assassinated since 1991 and that arrests resulted in a mere thirty-seven convictions. The AFL-CIO has been a particularly strong voice of opposition, arguing that labor rights concerns should derail the FTA. House Democrat Sander Levin asserts that 39 union workers were killed in 2007 and that Columbia’s labor rights laws are not up to International Labor Organization (ILO) standards.
While violence in Colombia remains the nation’s primary burden, since President Uribe became president in 2002 rates of homicide, kidnapping, infrastructure attacks, and terrorist attacks have fallen drastically There have also been steep declines in trade unionist killings, which made up just 0.226% of murder-related deaths in 2007. In 2007, the assassination rate declined more than 80%. Furthermore, the government has demobilized over 31,000 rebels and convinced 14,000 more to surrender. 2008 was a banner year which saw kidnappings at a two-decade low, rebel desertions at record highs, and the July rescue of fifteen high profile FARC hostages, including three U.S. contractors.
Despite protectionist concerns from the AFL-CIO and U.S. industry in light of a potential FTA, economists predict mild increases for U.S. exports under the agreement. Under the Andean Trade Preferences Agreement (ATPA) signed in 1991, thousands of Colombian products enter the U.S. duty-free, in stark contrast to the high tariffs and duties (more than one billion USD since 1991) on U.S. products seeking Colombian market entry. Furthermore, although yearly U.S. government studies indicate ATPA product imports have had some negative effects on domestic cut-flower and asparagus sales, consumers saw net welfare gains and the U.S. economic impact was negligible. The International Intellectual Property Alliance (IIPA) affirms that the FTA would help to prevent U.S. losses due to copyright violations and enforcement failures. Thus, despite domestic union concerns, the U.S. economy would seemingly stand only to gain from a Colombian FTA.
Finally, Colombian FTA opponents claim the pact would destroy the Colombian economy. Colombian NGOs allege that their agricultural sector will be crippled by U.S. agricultural subsidies and that one million farmers could lose their jobs. However, the U.S. carries a $2.8 billion trade deficit with the Andean region and one sixth of U.S. imports from Colombia are agricultural products, facing average tariffs of just 0.1% under the ATPA, which would be renewed under the FTA. ATPA renewal is also needed to protect the 5,600 Colombian products currently entering duty-free and which have supported Colombian job growth. It’s also worth noting that the top 40% of American exports to Colombia in 2006 comprised not agricultural goods but manufactured equipment. Additionally, the U.S. is the largest source of billions of new foreign direct investment (FDI) in Colombia, especially in petroleum and coal due to increased demand and improved exploration.
ANALYSIS
It may happen that the U.S.-Colombia bill is reintroduced in the ‘lame duck’ congressional session following the U.S. presidential election, to address the issue before the new administration takes office, especially given that President-Elect Barack Obama has previously stated his strong opposition to the FTA.
Obama supports the AFL-CIO’s anti-FTA position, citing labor assassination concerns and the need to defend human rights. However, taken into context, the 2007 murder rate for Colombian unionists was below that for the general Colombian population and certainly lower than the murder rate in Washington, DC.
It should be noted that not all Democrats oppose the bill. Congressional Democrats looking to pass a $300 billion economic stimulus bill may offer the Colombia FTA as a trade-off. Additionally, a letter to Congress, urging the treaty to pass, was signed by 35 former Democratic members of Congress, and there are indications that Pelosi may, in fact, support it after all. While it remains possible that Obama could veto the bill, should it be passed by Congress, this is unlikely given that the President-Elect supported the similar Peru FTA.
There are also strong regional foreign policy implications for an Obama administration to consider. As a long-time supporter of the U.S., Colombia provides a regional ally that stands in sharp contrast to the fiery anti-American rhetoric of the neighboring Venezuelan government of Hugo Chavez. The Uribe administration has been enormously cooperative, having extradited more than 800 fugitives to America and worked with the ILO to establish a protection program and special unit for the investigation of violence against trade unionists. Moreover, Uribe is also a necessary ally in the ‘War on Drugs,’ one of the reasons why the ATPA was enacted. The ATPA has had a small but measurable effect on drug-related crop eradication, and the Colombian Government has demonstrated its commitment to further measures, having seized 900 tons of cocaine and heroin between 2004 and 2008.
From a purely economic standpoint, the FTA is very unlikely to harm or help America, given that Colombia’s GDP is a fraction of that of the U.S. Politically, however, sacrificing the FTA with Colombia in favor of partisan interests or misplaced job migration concerns is both short-sighted and irresponsible, as an appropriate trade policy engages in fostering human rights, expanding economic development, and supporting democratic governments. One study indicates that not approving the FTA would increase unemployment by 1.8% in Colombia and decrease FDI by 4.5%. Given recent global financial turmoil, the advantages of promoting regional economic stability are plain. Moreover, increased prosperity in Colombia, combined with constructive dialogue between the two countries means that the FTA’s passage would not only be a politically astute decision for the Obama Administration and the Democratic Congress to make, but also the decision most likely to best protect the interests of those vulnerable segments of Colombian society about which they are concerned.
Colombia’s Progress against Violence, 2002-2007
2002 2007 Change Common homicides 28,83717,180-40% Civilians assasinatedby illegal armed groups 2,087 358 -83% Trade unionists killed 205 25 -88% Kidnappings 2,882 515 -82% Total Terrorist Attacks 1,645 381 -77%
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Source: Colombian Ministry of Defense and Ministry of Social Protection.
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by Jaclyn Selby has worked as a regional geopolitical consultant (Intellibridge, CastleAsia) and consults for the Defense Threat Reduction Agency and for a National Geospatial-Intelligence Agency contractor.