Making the case for a Free Trade Agreement with Colombia
By Sara Wyant
“Colombia in 2002 was simply one of, if not the, most dangerous and violent nation in the world,” testified James T. Hill, before the Senate Finance Committee on Wednesday. Hill is a retired U.S. Army General who was responsible for all U.S. military activity in South and Central America from 2002-2004. “Coca growth and cocaine production fueled the fire that threatened to destroy the second oldest democracy in the Americas.”
But under then President Uribe and now President Santos, along with about $8 billion in U.S. aid, Hill described a remarkable transformation:
• Insurgent groups like the FARC have been reduced by over 50%;
• Homicides are down 48%;
• Kidnappings down 91%;
• Attacks against labor unionists dropped from 194 in 2002 to 51 in 2010.
• Cocaine production continues, but has declined and enourmous amounts of cocaine have been stopped from reaching the U.S.
Colombia has become a key partner in regional security cooperation. Hill said their engagement activities in Central America have been “particularly important because I believe Central America is the single greatest security threat facing the U.S. in the region because of the destabilization potential of violent gang activity.”
Last week, the Obama Administration notified Congress that Colombia has met the first stage of commitments that they have required prior to moving forward on a new Free Trade Agreement. As a result, Congress and the Administration are now working on the bill to implement the FTA.
The second stage of commitments is due by June 15, noted Senate Finance Committee Chairman Max Baucus, D-Mont. “Once these are met, we understand that the Administration will be prepared to formally submit the FTA to Congress for a vote.”
However, Baucus also emphasized the importance of renewing Trade Adjustment Assistance (TAA), which supports Americans who need training and other services when their jobs are affected by trade, before the FTA can gain congressional approval.
“We’re not going to get one without the other,” Baucus said. “As far as I’m concerned the two must go together.
Despite the tremendous progress made in Colombia, the American Federation of Labor & Congress of Industrial Organizations (AFL-CIO) is still adamently opposed to what they describe as “horrifying levels of labor and human rights violations” in that country.
“We do not believe conditions for Colombian workers have yet changed in any meaningful way,” testified Jeffrey Vogt, Deputy director, International Department, AFL-CIO. He added that fewer than 5% of Colombian workers are in a union and 58% “toil in the informal sector performing low-skilled jobs.”
Wheat grower Gordon Stoner, from Outlook, Montana, pointed out that further delays give other countries a competitive edge and result in lost market share for U.S. farmers.
“Despite long-standing relationships with Colombian millers, the U.S. wheat industry will continue to lose market share to Canada and Argentina and possibly to the EU when their trade agreement is implemented. Tariffs on U.S. wheat will fluctuate between 10 and 15 percent and could move as high as the WTO bound rate of 124 percent and Colombia could continue use of a “price band” scheme to control agricultural imports,” Stoner testified. The tariff disadvantage would result in a more than $100 million per year loss to U.S. wheat farmers.
But Miram Sapiro, the deputy U.S. Trade Representative was reluctant to provide a firm timeline.
“We hope to submit these formally these to you as soon as we are in a position to do so,” said Sapiro.
General Hill made it clear that failure to ratify the FTA is not a good option for the U.S.
“If we fail to ratify the FTA, we tell our friends we really don’t care all that much for them, that we have a one-sided relationship,” Hill emphasized.
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