As trade pact with US sits, Colombia looks to China, others
Colombia's ambassador this week urged Congress to approve a free trade pact negotiated back in 2007. US is losing market share as Colombia looks elsewhere for imports.
That would be Colombia’s free-trade deal with Canada.
The Colombia-Canada trade pact takes effect Aug. 15, Ambassador Silva notes. As for the US-Colombia Free Trade Agreement, or FTA, which both governments approved in 2007? It’s still languishing in Congress.
Passage of all three measures next month appears possible – but at the same time new stumbling blocks are appearing from both Congress and the White House that could once again put off their adoption.
The Obama administration is demanding that Congress extend the Trade Adjustment Assistance program at the same time it approves the FTAs – a twinning many Republicans oppose. TAA is a program for training and compensating American workers displaced as a result of trade deals.
On the other side of the aisle, some Democrats want to hold off on the FTA with Colombia, in particular, until they see further progress on an “action plan” for labor and human rights in the South American country.
In the meantime, Colombia is not sitting idly by, waiting for the US to act. In addition to the FTA with Canada, Colombia expects to complete an FTA with the European Union by early next year, Silva says. Just this week, he adds, Colombia signed an investment agreement with China.
“We believe and trust that President Obama and his team will have a US-Colombia FTA approved before the summer recess,” Silva told a group of journalists in Washington Friday. “But after not seeing any action for so long, we have moved forward on trade elsewhere. It doesn’t mean we are going to depart from our trade alliance and friendship with the US,” he added, “but we are moving ahead [with others] very strongly.”
As Silva’s comments suggest, the four years of congressional inaction on the FTA have prompted a variety of strategies for prodding US lawmakers toward a vote. Aside from the “we’re-turning-elsewhere-for-trade” argument, the Colombians have offered statistics demonstrating that, indeed, the US share of Colombia’s imports is falling in the absence of a trade pact.
The Colombian government has even sought to turn the jobs argument against US protectionists who insist free trade means job losses at home.
“I think Capitol Hill is hearing from many parties that delaying all the FTAs is not a good policy – particularly when the US needs these jobs,” Silva said.
He noted that Parkdale Mills of North Carolina – one of the state’s last textile operations – has told Congress it will have to cut jobs if trade preferences with Colombia, which have existed for decades but expired in January, are not reinstated.
One of Caterpillar’s largest foreign market shares is in Colombia, Silva says, where the US farm-equipment and truck manufacturer sells large amounts of mining equipment. But if Colombia seals a free-trade deal with South Korea before the US deal takes effect, “the US is going to lose that market.”
Then there is the ongoing threat to US agricultural exports that go to Colombia. In 1998, 46 percent of the country’s total food imports were from the United States. Today, US ag imports have fallen to 20 percent and are “going down every day,” Silva says.
Still, opponents of a Colombia FTA have not been idle as Colombian officials have lobbied for passage.
This week a delegation of Colombian trade unionists descended on Washington to argue for a delay in passage of the FTA – for up to four years – to require the government of President Juan Manuel Santos to prove it is serious about protecting union leaders and members.
The AFL-CIO, which sponsored the delegation of Colombian unionists, continues to claim that Colombia is the most dangerous country in the world for union members. Speaking at a Capitol Hill press conference Thursday, Larry Cohen, president of the Communications Workers of America, derided Colombia’s labor action plan signed with the US as “more rhetoric than reality,” and called on Congress to “encourage true democratic reforms in Colombia before moving forward on the free trade agreement.”
But Santos insists that Colombia has improved markedly on protection of union leaders. He notes, for example, that “not one” union leader who accepted government protection in the past year was assassinated. He also notes that the ILO, the International Labor Organization, has dropped Colombia from its “watch list” on labor rights violations.
Casting further doubt on the union criticisms of Colombia’s labor environment, Silva notes that Canada – hardly known as a labor-rights scofflaw – has no qualms about its impending FTA with Colombia.
But perhaps the biggest tease the Colombians like to dangle before American eyes concerning the languishing trade deal is the threat a rising China poses to America’s economic standing in the region.
Currently 28 percent of Colombia’s imports come from the US. Less than half that – 13 percent – comes from China. But US exports to Colombia have fallen sharply in recent years, while China’s are rising.
With this week’s China-Colombia investment agreement – and no FTA with the US forthcoming – Colombians hint that, just as China supplanted the US as the largest trading partner of its giant neighbor, Brazil, a couple of years ago, China could also surpass the US as their top trade partner before long.