“We’re focused on submitting [Colombia Free Trade Agreement] as soon as possible for congressional consideration.”
—President Obama, July 7, 2010
The U.S.-Colombia Free Trade Agreement (FTA) was signed in November 2006 with amendments finalized in June of the following year. In the ensuing three years, the deal has remained idle in the House of Representatives, blocked by Speaker Pelosi’s political posturing. In April 2008, referring to President Bush urging Congress to consider the trade agreement, Pelosi told the White House, “[Y]ou want to do it the way you want to do it, it will lose. You just want to jam it down the throat of Congress, it will lose.” Yet, while American jobs, increased competitiveness, and a stronger economy lays in the balance, security in South America may be at risk as well.
Positive Momentum in Colombia: According to the Heritage Foundation’s annual Index of Economic Freedom, Colombia is moving in the right direction. Since the 2009 report, Colombia has risen from 72nd to 58th in the global rankings, with respectable macroeconomic statistics earning it the classification of a “Moderately Free” economy. Democrat opposition to the U.S.-Colombia FTA in Congress frequently revolves around concerns for Colombia’s labor market. However, Bogota has made great progress in this area according to the Index, improving its “Labor Freedom” score to 73, a ten point gain since 2007. Interestingly, this sub-sector score is a full eleven points higher than that of Mexico, a major partner in our largest Free Trade Agreement to date. Refuting then-candidate Obama’s opposition to the Colombia FTA in 2008 on the grounds of inadequate protection of unions, former Colombian President Uribe told the Wall Street Journal that violence against union organizers had in fact fallen 90% from 2001 to 2007. Increased economic freedom in Colombia promotes political and social progress and improves quality of life; the U.S. benefits in turn as Colombian democracy strengthens and its citizens prosper, providing much needed stability in South America.
Others Move Ahead—America Falls Behind: While Democrats have blocked the U.S.-Colombia FTA, our South American ally has signed free trade deals with the European Free Trade Association and the European Union. Moreover, Canada’s legislature recently ratified its free trade agreement with Colombia, finalizing closer trade relations between the two countries. These developments are certain to hurt U.S. export competitiveness and further erode the potential for economic growth. For example, the National Pork Producers Council, citing research by Iowa State University economist Dermot Hayes, reported that the U.S. could be shut out of the Colombian market within the decade due to Canada’s tariff advantage. Hayes explained the potential economic benefits from increased pork exports if the U.S. implements the Colombia FTA, stating, “The initial response to export growth is an increase in the price that pork producers receive…Higher prices eventually stimulate additional pork production, and the industry expands…For each 1 percent change in the size of the U.S. pork industry, the U.S. economy creates 920 direct full-time jobs and 4,575 jobs in total." Dragging out the U.S.-Colombia FTA is an unusual instance of Democrats passing on pork.
A Step in the Wrong Direction: Almost immediately after taking office last week, Colombian President Juan Manuel Santos met with his Venezuelan counterpart, anti-American despot Hugo Chavez. Discussing restoration of diplomatic relations and border security on cordial terms, the visit may be the beginning of a worrisome tack in Colombia’s foreign policy, possibly derived from Santos’ calculation that Bogota’s national interests are not supported by the current Democrat leadership. A Washington Post op-ed on August 12, 2010 noted, “Colombians are tired of often-futile visits to Washington aimed at convincing U.S. lawmakers that they should back the trade deal.” The Latin America Trade Coalition described the geopolitical significance of passing the FTA in a July 2010 letter to Congressional leadership stating, “it will help lock in the gains of the past decade, which has seen violence fall to its lowest level in a generation…fighters have been demobilized as insurgent groups have lost legitimacy, and the number of Colombians enrolled in school and the health care system has risen sharply. These sustained results are a triumph of bipartisan U.S. foreign policy…the trade agreement will build on this solid foundation.”
If President Obama is serious about expanding markets for American producers and supporting democratic allies, he should encourage Speaker Pelosi and Congressional Democrats to abandon their taxing, spending, borrowing, and bailouts. Approving the signed U.S.-Colombia Free Trade Agreement will help stimulate the economy at zero-cost, while solidifying a key security relationship.