A senior United States Senator outlined what he believes the U.S. would lose if it does not approve a free trade agreement (FTA) with Colombia.
In a report dated February 8, 2011, ranking Senator Richard G. Lugar explains that the United States will lose political influence and credibility in Latin America as well as miss out on opportunities to expand U.S. economic interests if it does not approve the FTAs with Colombia and Panama.
Economic Losses
According to the report, by not ratifying the FTA, which is known as the United States-Colombia Trade Promotion Agreement, the U.S. stands to lose its wheat export to Colombia to its northern neighbor Canada, who has signed a free trade agreement with Colombia.
The U.S. went from exporting $1.8 billion worth of agricultural products in 2008 to $827 million in 2010. Argentina took the place of the U.S. for largest exporter of agricultural products to Colombia and supporters of ratification say the FTA would reverse this trend.
Thanks to the Andean Trade Preference Act (ATPA) which expires February 12, 2011, Colombia enjoys not paying tariffs on 90% of its products that the U.S. imports. A free trade agreement with Colombia would level the playing field for U.S. exports that face high tariff rates, said the promoters. The ATPA was enacted to encourage the export of products other than illegal drugs from Colombia.
If approved, the FTA would eliminate duties on 80% of U.S. exports to Colombia.
Loss of Regional Influence
The report states that because of the delay in ratifying the FTA, the U.S. is already losing credibility and influence in the region.
Lugar writes, “Continued delay on a matter of such importance to our allies calls into question U.S. reliability … [Trade agreements] serve as a symbolic litmus test of U.S. commitments to its friends in a neighborhood where various countries are taking sharply divergent paths.”
According to the report, Colombia, a member of the U.N. Security Council, is looking for commercial relations and political support.
A Colombian government official told a Senate staff member, “where the money goes, the political influence seems to go as well,” the document stated.
“When staff asked senior Colombian trade officials if they would consider meeting additional conditions, especially given that some of the opposition to ratifying the FTA is regarding human rights, they answered flatly, ‘Maybe before we would have. But the context has changed. Today everybody wants this market as is,'” stated the document.
The report states that further delay would only reduce U.S. relevance on labor reforms in Colombia.
The report claims that Colombia’s progress can be seen in its changes in human rights and labor relations and in President Juan Manuel Santos’ efforts to give back land and pay reparations to people displaced by Colombia’s conflict.
Promoters of the FTA fear that not backing Colombia commercially could lead to the loss of everything gained by Plan Colombia with regards to human rights.