U.S. - Colombia Free Trade Agreement

I want to start wading into the murky waters of the controversial free trade agreement between the U.S. and Colombia. Now, I'm far from an expert on international trade and this agreement in particular has so many moving parts and implications that I don't think I have a deep enough understanding to form an opinion, but I think its worth trying to pick apart for a couple of reasons.

First, the ties between the U.S. and Colombia run deep. From the Colombian perspective, the U.S. is by far its largest trading partner in terms of both imports and exports. In 2007, 35% of Colombian exports went to the U.S. and 26% of imports came from the U.S. While Colombia is a much smaller trading partner from the U.S. perspective, it ranks in the top five in another category - recipient of U.S. foreign aid. Before the U.S. invaded Iraq and Afghanistan, Colombia was behind only Israel and Egypt as a leading recipient of U.S. foreign (i.e. military) aid and U.S. governments and businesses have been meddling in Colombia for well over a century (two dramatic examples here and here).

The second reason I think this is important to understand is that the agreement was wielded by both Democrats and Republicans as a political bludgeoning device during the most recent election cycle - with the GOP accusing Democrats in Congress of evoking the specter of economy-killing protectionism and the Democrats declaring that the GOP's willingness to sign a deal despite Colombia's human rights record is proof positive that Republicans are just bad guys.

My sense is that both sides where oversimplifying and politicizing this issue during the campaign season. However, the fact that the U.S. media was discussing U.S.-Colombian relations beyond the perennial issues of cocaine and violence is a heartening development. It's an opportunity to expand awareness and understanding.

So here we go...

Brief background: Using the so-called 'fast-track' bargaining power given to him by Congress, President Bush entered in to free-trade negotiations with the government of Colombian President Alvaro Uribe (that's him in the shades) way back in 2004. A deal was reached in 2006, just in time for the newly elected Democratic congress to deny ratification of the treaty. The deal has been in political purgatory ever since and, as mentioned above, was given new life as a campaign issue in 2008.

Proponents argue for the ratification of the treaty for several reasons. Supporters in the U.S. say existing bilateral agreements already grant Colombian exports free access to the U.S. market, by and large. The same cannot be said for U.S. exports to Colombia. This was the main case made by John McCain and his (failed) campaign. Other arguements focus on the need to strengthening the existing alliance with a friendly country in an increasingly unfriendly corner of the globe. Furthermore, these voices, echoed in a recent New York Times editorial, claim the U.S. needs to 'walk the talk' on free trade if it wants to remain credible in global trade talks.

My understanding of the arguments of pro-free trade Colombians is that an agreement will mean more jobs and foreign investment in Colombia and access to cheaper imported consumer goods. In a country with an official unemployment rate at almost 10% (and believed to be much higher by many), the promise of more jobs is indeed a powerful incentive.

Opponents of the agreement, both in the U.S. and Colombia, say that ratification would be tantamount to the U.S. turning its back on Colombian labor leaders who have been the targets of violence and assassination by anti-union elements in Colombia. Others believe that the U.S. should use the leverage provided by the agreement to pressure the Uribe administration to fully investigate and prosecute human rights abuses by the army and paramilitaries (a topic I'll go into in other posts).

Another argument against the agreement that I haven't seen in the U.S. press but have come to understand here is related to agriculture. Free trade would mean cheap U.S. agricultural products could flood the Colombian market and put domestic producers out of business. The price of many of these U.S. products are kept artificially low by inherently anti-free trade U.S. agricultural subsidies. Indeed, we need look no further than the disastrous impact of subsidized U.S. corn on domestic Mexican producers in the wake of NAFTA to get a sense that this is a legitimate concern.

This last argument is the case put forth by much of the anti-agreement graffiti one sees across the city. The picture to the right is a play on the spanish acronym for free trade agreement (TLC - Tratado de Libre Comercio) meaning 'time of peasant tears.'

This is just my first swipe at this issue. Think of it as my initial brain-dump. I hope to gain more insight as I dig deeper. More to come...