Friday, April 23, 2010

Return of the Colombia FTA

José Cárdenas at Foreign Policy's Shadow Government blog resurrects the fallacious national security argument about a Colombian free trade agreement, which the Bush administration had used very forcefully and unsuccessfully.

The upshot is that "U.S. credibility suffers internationally" because "many are watching" and Hugo Chávez along with Rafael Correa will win if we don't pass the FTA.  We also learn that "no mere mortals" have the power to stop the trend of FTAs, though that begs the question of why we worry about them if they're going to happen no matter what.  Finally, "If one wants to predict the future of our hemisphere, it begins nowhere but here."

Look, sometimes an FTA is just an FTA.  We can argue the economic pros and cons, but the world has not blown up since the last time the Colombia FTA was shot down.  Hugo Chávez will rise or fall according to what happens in Venezuela, regardless of U.S. trade relations with Colombia.  The future of U.S. policy toward Latin America or even U.S. security interests simply do not revolve around those relations.


Boli-Nica 6:53 PM  

you claim that the "national security" argument is "fallacious", but you completely disregard the change in context in the past year or so. After Chavez closed off the Venezuelan market, the importance of the US market has increased for Colombian businesses. Passing the FTA is a "confidence builder" for Colombia, in view of Chavez policy. That is a view that many business analysts in Colombia have.

Boli-Nica 6:57 PM  
This comment has been removed by the author.
Boli-Nica 8:00 PM  

The issue of lack of US "support" for the FTA has been thrown out in the presidential race -

La candidata presidencial Noemí Sanín dijo en una intervención en el Foro Económico Mundial en Cartagena, que Estados Unidos había “dejado sola a Colombia”, en materia comercial. Pero añadió que esperaba una reacción de Washington que permitiera iniciarlo pronto.

Some Colombian analysts have also pointed out they view the US official support (or lack thereoff) of the FTA as a matter of support from an "ally" in an area with "hostile" neighbors, .

En el mismo senado de los Estados Unidos crece la preocupación por la pérdida de credibilidad de los Estados Unidos por la demora en la aprobación del TLC con Colombia, cosa que claramente está ocurriendo, especialmente mientras Venezuela impone barreras al comercio con Colombia que claramente violan los acuerdos de la OMC, Estados Unidos sigue reticente a aprobar el TLC, lo que ha significado una señal de una clara poca solidaridad de parte del país norteamericano, con uno de sus aliados."

Vicente Duque 2:33 PM  

These data may be useful :

U.S.- Colombia Trade Promotion Agreement
Site : U. S. Exports - U. S. Government

Some excerpts :

Expanding Economic Opportunities for U.S. Manufacturers, Workers, and Farmers

Colombia is a free market economy with growing commercial and investment ties to the United States. Between 2003 and 2007, U.S. exports to Colombia grew 128 percent from $3.7 billion in 2003 to $8.5 billion in 2007, outperforming overall U.S. export growth, which was 60 percent for the same period. The market access and trade disciplines provided by the Agreement offer an opportunity to further expand U.S. exports to a
region that is already seeing high export growth rates.

In 2007, U.S.-Colombia total trade amounted to $18 billion and Colombia was our 26th largest export market. In Latin America, Colombia is the United States' fourth largest trading partner, behind Mexico, Brazil and Venezuela. After Canada and Mexico, Colombia is already the largest export market for U.S. farm products in the hemisphere. A U.S. International Trade Commission study estimates that U.S. exports to Colombia will be $1.1 billion higher once the U.S.-Colombia TPA is fully implemented.

The United States is already the leading source of Colombia’s imports with a 25 percent market share. Despite Colombia’s close proximity to other competitive Latin American economies such as Brazil, Argentina and the rest of the Andean group, the high quality
and wide selection of competitively priced U.S. products will provide U.S. exporters with
a distinctive edge, one which will be enhanced under the tariff elimination provisions of the agreement.

Just as bilateral trade is poised to grow under the U.S.-Colombia TPA, so is U.S. investment in the Colombian market. At least 250 American companies today operate in
nearly every sector of the Colombian economy. The stock of U.S. foreign direct investment (FDI) in Colombia in 2006 was approximately $4.89 billion, mainly in the natural gas, coal mining, chemical, and manufacturing industries. Overall, Colombia attracted over $7.57 billion in foreign direct investment in 2007, Colombia’s second highest total ever and almost 20 percent higher than in 2006.

Unlike many of its neighbors, Colombia has not suffered any dramatic economic collapses in recent years. In fact, Colombia’s economic growth has averaged 5.2%
annually since 2002, reaching 8 percent in the first quarter of 2007 (the highest in Colombian history). The economy continues to improve thanks to austere government
budgets, focused efforts to reduce public debt levels, an export-oriented growth strategy,
and an improved security situation in the country.

Youth, Minorities, Politics :

Vicente Duque

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