BY CHRONICLE EDITORS
The Bush Administration and leaders of the Democratic party recently reached a bipartisan agreement that would enable passage of free trade agreements with Colombia, Panama and Peru.
However, there are some very disturbing signals out of Congress indicating that the Democrats may not approve the Colombia FTA any time soon. It would thus get caught up in the 2008 presidential election campaign, which would likely delay its passage further.
That would be a grave mistake. While the FTAs with Panama and Peru will benefit companies in those countries as well as the United States, the positive results will be even stronger when the U.S. FTA with Colombia is passed and implemented.
Colombia is today the fifth-largest U.S. trading partner in Latin America. By comparison, Peru is the eighth-largest trading partner and Panama ranks in 14th place.
US AND COLOMBIA BENEFITS
Although U.S. companies are very happy doing business in Colombia thanks to the successful policies of the current administration of President Alvaro Uribe, only an FTA with the United States will provide the needed investment and trade guarantees for the future.
An FTA will lead to U.S. exports to Colombia nearly doubling by 2010, according to the U.S. Chamber of Commerce. Many U.S. companies will likely also expand manufacturing facilities in Colombia for exports to other Andean countries, thanks to the country’s central geographical position, well-respected labor force and strong local economy.
For Colombia, the FTA will provide badly-needed guarantees for the future as well. Currently, Colombian exporters of cut flowers, textiles, coffee and other key items have to depend on duty-free access through the Andean Trade Promotion and Drug Eradication Act (ATPDEA). However, the ATPDEA is limited in time and scope. It will expire in July after being renewed for six months. Even if Congress approves another extension, it’s hardly the necessary framework for Colombian exporters to operate in. They also need to invest in facilities and make long-term decisions and only a U.S. FTA will provide the needed guarantee of permanent, long-term access to the key U.S. market.
Then there’s the political dimension. Not approving a U.S.-Colombia FTA sends a very negative signal to any country in Latin America that wants to boost business relations with the United States. Even if the Panama and Peru FTAs are approved, not passing the Colombia FTA will be seen as a blow to free trade throughout Latin America.
And this just as the region is facing the growing influence of anti-U.S., anti-business populists like Venezuelan President Hugo Chavez.
We therefore strongly urge Congress, including Democrats, to approve the free trade agreement with Colombia and do so quickly and without any further delays.
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