June 14, 2011
The Obama administration announced last month that it would not seek Congressional approval of the Free Trade Agreement (FTA) with Colombia until Republicans agree to expand assistance to American workers who might lose jobs as a result. The U.S.-Colombia FTA was negotiated under U.S. Trade Promotion Authority, which means that it can be approved or disapproved by Congress, but Congress cannot amend it. FTAs are nothing more than dollar imperialism. That is, a major economic power — the U.S. — taking unfair advantage of a recovering economy.
The negotiated U.S.-Colombia FTA will give market access for U.S. agricultural, consumer, and industrial products, and will immediately remove all tariffs on about 80 percent of U.S. goods entering Colombia. This includes immediate duty-free treatment of beef, cotton, wheat, soybeans, many fruits, and other agricultural products. The remaining 20 percent of tariffs will be phased out over a period of 10 years for both agricultural products and industrial products. In addition, the agreement provides protections for U.S. investors that will be enforced through a binding international arbitration program.
The agreement also gives U.S. businesses access to Colombian financial services markets. Mutual funds and pension funds within Colombia will be allowed to use U.S.-based portfolio managers. Colombia will also phase out market restrictions related to cable television. And, U.S. suppliers are granted the right to bid on contracts from Colombian government offices and agencies.
Further, the agreement provides improved protections and enforcement of a variety of intellectual property rights for investors in Colombia. The protections are consistent with those of the U.S. and cover products such as software, music, written text, trademarks, and patents.
Under the agreement, the parties agree to enforce their own domestic environmental laws and to fulfill their respective obligations under multilateral environmental agreements.
Colombia is the most dangerous country in the world for union organizing. This is one reason, the International Labor Rights Forum has opposed the U.S.-Colombia FTA because of serious human rights abuses in Colombia. More than 3,000 union leaders and activists have been killed in the last three decades. Many of the deaths are linked to paramilitary forces linked to the Colombian government.
Moreover, large multinational agro-businesses have been tied to paramilitary squads in Colombia. In February 2007, Chiquita Brands International admitted that it had paid $1.7 million to a paramilitary group for protection of its banana plantations. And two Coca-Cola bottlers are allegedly linked to the murder of four union leaders in Colombia.
The Colombian government promised to provide more protection to labor advocates, including shop stewards, union organizers and bargaining committee members. It also agreed to eliminate its current backlog of risk assessments of union leaders and members who have requested government protection. AFL-CIO is still strongly opposed to the FTA but has agreed to talk with Colombia’s labor leaders.
Currently, over 90 percent of U.S. imports from Colombia enter the U.S. duty- free with an average tariff of 0.1 percent. In contrast, the average tariff on U.S. products shipped to Colombia is 12 percent, with certain products facing tariffs of up to 35 percent.
Opponents also argue that the U.S.-Colombia FTA will hurt small peasant farmers in Colombia, who will be forced out of business because they cannot compete with cheap imports of food from the U.S., which subsidizes its farmers. This has happened in other developing countries that have entered trade agreements with the U.S. For example, low priced corn (subsidized by the U.S. government) has forced over a million small Mexican farmers out of business since 1994 when the North American Free Trade Agreement took effect.
And how will non-agro Colombia businesses fare when faced with competition from multi-million dollar U.S. corporations?
The U.S.-Colombia FTA favors the U.S. at the expense of Colombians. It is dollar imperialism at its worst.
What we need is for the Obama administration to develop a trade policy that does not rely on bilateral free trade agreements. Instead, the U.S. should seek a multinational approach through the World Trade Organization. A broader international approach will promote trade that is perceived as fairer to all concerned and will improve the international business climate.
Congress should reject the U.S.-Colombia FTA.