Politics, Business & Culture in the Americas

The Colombia FTA is an Economic Stimulus that Doesn’t Cost $25 Billion

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The election campaign has ended, but Commerce Secretary Gutierrez is still on the campaign trail for the Colombia free-trade agreement (FTA). This week, he was on the hustings at the Small Business Administration trade symposium.  The message: we must pass the Colombia free-trade agreement “with the same sense of urgency that we passed a stimulus package several months ago.” He’s right.

And these small businesses owners certainly understand that our economy would benefit. Approximately 10,000 U.S. companies export to Colombia, and of that about 8,500 are small and medium-sized firms—the engine for economic growth in the United States. With this FTA in place, the U.S. trade relationship with Colombia would shift from one of unilateral preferences granted to Colombia through the Andean Trade Promotion and Drug Eradication Act to a relationship where U.S. industry enjoys the same benefits already granted to Colombia. The Colombian market would open on a reciprocal basis to U.S. goods, allowing 80 percent of U.S. products to immediately enter Colombia duty-free. Without an FTA, the high tariffs levied on U.S. products means that a Caterpillar truck, for example, faces more than $200,000 in taxes when sold in Colombia. Clearly, this is not good for either country.

In these unsettling economic times, it is mystifying how Congress could shy away from passing an agreement that—combined with the already-in-place Peru FTA—would increase U.S. farm exports by $1.39 billion and provide over 18,000 new jobs.

Last week, rumors were that the administration might trade Colombia passage for a deal that would help Detroit and the auto industry. But Rahm Emanuel, the incoming White House Chief of Staff, quickly downplayed this possibility saying that “you don’t link those essential needs to some other trade deal.”

Unfortunately, Congress has yet to heed the calls for agreement passage. Instead, this week’s lame-duck session is focusing just on whether to dole out $25 billion to help Ford, Chrysler and General Motors—the latest casualties in the financial storm. But passage of the Colombia agreement would cost nothing. Zero, zilch, nada. Of course, it wouldn’t save as many jobs as bailing out the Big Three (in fact it will likely generate jobs). And the best thing? It wouldn’t cost the taxpayers a dime. And the U.S. government wouldn’t be rewarding the excesses of automaker CEOs who each chose to fly to Washington DC on private jets this week rather than take one of the 24 daily nonstop flights between the two cities.

Congressional leaders are rightly concerned about violence in Colombia. But Colombia has made enormous progress. As Mac Margolis pointed out earlier this week, “the irony is that the heightened scrutiny falls on Colombia as the government in Bogotá has made dramatic improvements in security and cracked down hard on human rights abuses.” In fact, 39 trade unionists were killed last year, down from 197 in the year before President Uribe came to power (2001). At the same, time, prosecutors obtained 36 convictions for trade unionist murders murders—35 more than that same year.

Congress, it is time to take any measure—large or small—to help the U.S. economy. If not, the chickens (or turkeys) will surely come home to roost.


Jason Marczak is deputy director of the Adrienne Arsht Latin America Center at the Atlantic Council. He previously served as senior editor of Americas Quarterly and director of policy at Americas Society and Council of the Americas.

Tags: Colombia, Economic Stimulus, Free Trade, Uribe
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