Dawn Marie Paley

What’s next for the U.S.-Colombia Free Trade Agreement?

Posted in Uncategorized by dawn on 06/12/2010

Here’s my latest piece, for the North American Congress on Latin America.

The U.S. Colombia Free Trade Agreement (FTA) has slid off the radar, but the deal is far from dead. It has been more than three years since the Colombian congress approved the deal, but it is still awaiting congressional approval in the United States.

The agreement was a political hot potato for President Obama and congressional Democrats, who decided to put the agreement on the back burner in 2008. This year’s mid-term elections have shifted the balance of power in the House, but it isn’t clear whether or not there will be a push to ratify the controversial agreement, which is officially known as the U.S.-Colombia Trade Promotion Agreement.

“Right now everybody is on standby a little bit,” said Raul Fernandez, a professor at the University of California Irvine and a member of the Colombian solidarity group Mingas. “On the one hand, the Republican party obtained a great majority in the House. Normally one would say that that means that then it will be really an easy ride for the treaty to be passed, to be approved by Congress.”

But increasing protectionism and an anti-NAFTA sentiment throughout the elections, including among Republicans, says Fernandez, could mean that moving to reopen talks about signing new free trade agreements isn’t a priority.Not everyone is interpreting the mid-term results in the same way. In a recent editorial, the Washington Post suggests that it is likely that the Republican-controlled congress will try and move ahead with free trade pacts with Colombia, Panama, and South Korea.

“Now that the Republicans are in the majority, all three trade agreements have better prospects — good news for the American companies and workers who would benefit from expanded exports, and for the American consumers who would benefit from more choices in the marketplace,” reads the Post opinion piece.

But it’s not only the Republicans. In 2008 Obama told prospective voters that he would oppose a free trade deal with Colombia “because the violence against unions in Colombia would make a mockery of the very labor protections that we have insisted be included in these kinds of agreements.” However by July, Obama had changed his tune. “Simply put, export growth leads to job growth and economic growth,” he said, after announcing U.S. plans to move forward with the Colombia FTA.

Even if, along with violence against union leaders, we put Colombia’s paramilitary political scandals and the ongoing disappearances and assassinations of civilians aside, the Colombia-U.S. agreement is a far cry from a “people’s-first” agreement.

The notion that the U.S.-Colombia Free Trade Agreement is in its essence about increasing consumer choice in the United States or benefiting U.S. workers is actually a smokescreen, if the trade model this agreement reflects is any indicator. Between 1994 and 2002 alone 879,280 U.S. jobs were lost to NAFTA, according to a study by the Economic Policy Institute. Like with NAFTA, behind the Colombia FTA lies one corporate goal: New markets, and bigger profits.

Backers of the agreement include transnational corporations throughout all sectors, including seed giants Monsanto and Cargill; aerospace and energy firms Boeing, Halliburton and Duke Energy; the Mining Association of the U.S.; the country’s largest chemical and pharmaceutical companies, including Johnson & Johnson, Dupont, Pfizer, and Honeywell; tech firms including Intel Corporation, GM, and IBM; as well as clothing, footwear and textile companies like Hanesbrands, Jockey International, Liz Claiborne, and New Balance Shoe Inc.

The U.S. Commercial Services lists oil and gas machinery and services as the “best prospect” for U.S. exports to Colombia, followed by plastics and resins, construction and mining equipment, and telecommunications. The oil and gas services market is estimated at $2.33 billion per year, $1.15 of which could go towards U.S. companies. Each of the plastics and resins, construction, mining and communications markets are worth more than $2 billion a year, with significant market shares available for U.S. exporters.

Far from endorsing the deal because it will supposedly bring benefits to U.S. consumers, the aerospace sector likes the agreement because it could mean selling more war planes to Colombia.

“As with virtually all U.S. negotiated trade agreements, additional economic growth is anticipated. The result of such economic expansion is an enhanced ability of a country to acquire both commercial and military aerospace equipment,” reads a passage in the Industry Trade Advisory Committee on Aircraft Equipment’s report in favor of the FTA.

The Canada-Colombia Free Trade Agreement, which was ratified by both countries in June of this year, could increase pressure from U.S. transnationals who want a piece of the pie. Canadian oil and gas companies in particular have been early movers in taking advantage of the Canada-Colombia deal.

As the CEOs of transnational corporations salivate at the potential of new buyers for their products, and untapped natural resources to exploit, Colombian activists and their allies are warning that they will escalate their campaign against the deal at any moment. In Colombia, the Colombian Action Network against Free Trade (RECALCA) is also on the ready should Washington decide to push ahead with a free trade agreement, and they say that these types of “harmful” free market policies are already being implemented domestically through President Juan Manuel Santos (following the lead of former President Álvaro Uribe).

“[The mid-term election] can be taken in two ways . . . It could delay things because NAFTA is not very popular right now . . . and in general people see it as an opportunity to send jobs abroad,” said Natalia Fajardo, an organizer with Mingas.

“On the other hand, Obama has been looking for what he sees as economic gain, and he’s looking for exports for that, and because of that he’s talked about trying to push for the Korea, Panama, and Colombia Free Trade Agreement,” she said.

For the moment, Mingas members are doing their research, and carefully tracking any announcements of updates on the agreement.

“We’re on standby, it could go either way,” said Fernandez.

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