American unions, particularly the AFL-CIO are delaying the passage of the U.S.-Colombia free trade agreement (FTA) for domestic political reasons, says the president of the U.S. Consumer Electronics Association (CEA).
CEA president Gary Shapiro told Colombia Reports that the American unions are using the FTA as a “bargaining chip for something else,” and that they “will not let it pass until they get something in return,” stating that the American “unions don’t care about Colombia, American exports, or jobs. What they care about is what helps them.”
FTA is a “no-brainer”
For Shapiro and his association of electronics companies, which includes over 2000 companies in the consumer technology industry in the United States, the passage of the FTA makes complete economic sense and has “no downside.”
“In Washington, we call this a no-brainer,” Shaprio says. “By removing tariffs on U.S. products, we will increase exports and create jobs.”
Shapiro points out that the deal “will not cost the U.S. any jobs,” as products entering the U.S. from Colombia are already duty free, and so the deal would increase competition for American companies.
Shariff calls the current situation, in which U.S. exporters are subject to tariffs in Colombia, a “detriment to the U.S.” He says that U.S. exporters must pay duties on 95% of goods exported to Colombia, at a cost of about $2 million per day. This situation makes U.S. companies less competitive in Colombia, a rapidly growing market. And while the U.S. continue to drag its heels over passage of the FTA, Colombia is signing FTAs with other countries.
The result, Shapiro says, is that U.S. products become relatively more expensive than products from those countries which do have an agreement with Colombia; essentially leaving American companies in the dust.
Shapiro rejects AFL-CIO’s complaints that Colombia isn’t doing enough to protect human rights and labor rights, pointing to numbers which show great improvements over the last decade.
“The previous claims of union violence in Colombia have faded, as the facts simply do not support the assertions in this increasingly peaceful country, where homicides are down 45% since 2002.”
“There has been a dramatic drop in union killings. Colombia was, lets face it, a dangerous place until the new government came in. I think Colombia is safer now than it was a decade ago.”
“By any measure,” Shaprio concluded, “the stats are frankly not very compelling to me.”
Impact on Colombia
For Shapiro, the deal would also be good for Colombia. He argues that jobs will not be lost in the country, because U.S. companies who enter the Colombian market following the FTA will not be competing with Colombian companies. “Competition is not between the U.S. and Colombia for products, it’s between the U.S. and countries like Argentina, Brazil, the EU, etc.”
Shaprio says that the American products that would be competitive in Colombia are from different sectors than those that Colombia specializes in on a domestic level. With shipping costs, time delays, and factors such as higher labor costs in the U.S., Colombian industry would not be seriously affected by new U.S. competitors.
The passage of an FTA would be beneficial to Colombia in that it would help brand Colombia as a good place for foreigners to invest in and travel to, according to Shapiro.
For Shapiro, the failure to pass the FTA, for which he thinks Barack Obama bears some of the blame, is an insult to Colombia. “Colombia is one of the best friends the U.S. has. It’s heartbreaking to many of us in the U.S. that Congress has failed to act on this. It is disrespectful to Colombia, and to the Colombian people.”
The U.S.-Colombian FTA was signed by former President George W. Bush in 2006. It was then passed by the Colombian Congress, but remains in limbo in the U.S., with President Barack Obama yet to send it to Congress.