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U.S.-Colombia free trade: what's the big deal?

Fri, 04/04/2008 - 4:39pm

FILE: Mark Penn; Win McNamee/Getty Images

I must admit, I'm puzzled as to why it's supposed to be such a big deal that Hillary Clinton's chief strategist Mark Penn (right) met with Bogotá's ambassador to Washington about the controversial U.S.-Colombia Free Trade Agreement.

The key point to remember about this and other FTAs in Latin America is that they're much more about politics than they are about economics. Ninety percent of U.S. imports from Colombia have already been entering the United States without any tariff, thanks to prior agreements. Peterson Institute analyst Jeffrey J. Schott estimated in 2006 that any welfare gains (GDP boost) from a U.S.-Colombia FTA would be positive, but "relatively small" -- roughly half a percentage point for the Colombians, and a negligible amount for the United States. If anything, the agreement is about lowering Colombia's tariff barriers to U.S. goods, solidifying trade relations, and lowering the risk that President Álvaro Uribe's successor will have a different economic philosophy. So, claims by U.S. labor activists that the FTA would be bad for U.S. manufacturers are little more than dishonest fearmongering.

That said, I'm not on board with U.S. Trade Representative Susan Schwab's hyperbole, either. Can it really be that the dangling FTA, not the drug war, is the root of Latin America's problems today?

Leaders in the hemisphere and Latin America have said that the single most destabilizing factor in Latin America today may be the U.S. Congress's failure to ratify the Colombia Free Trade Agreement. That is more destabilizing today than anything that Colombia's neighbor Venezuela is doing or threatening to do— and that is saying a lot.

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Since you're confused

by sashenka on Fri, 04/04/2008 - 3:43pm

"I must admit, I'm puzzled" - check out Andrew Sullivan, who recaps the reason this is a "big deal" nicely.
http://andrewsullivan.theatlantic.com/

Columbia has an unpleasant

by DannyK on Fri, 04/04/2008 - 5:21pm

Columbia has an unpleasant history of political violence, particularly towards unionists. I'm puzzled you didn't know that already.

We Can't Know Penn's Stand; But It's Clear Obama Needs Info

by Laura Stein on Tue, 04/15/2008 - 11:42pm

[Look, I still think the we've got a better chance of having decent leadership with Obama than with Clinton who's always understood all the angles of the issues, made the most wonderful promises, then caved when her corporate campaign financers got uncomfortable. However, Obama has revealed that he doesn't know global trade agreements are far-reaching rules countries make about how global corporations are allowed to wield power, not simply deals about holding down tariffs. Anybody who has the ear of the campaign would do him a favor by getting his advisors to grow him up on this one.]

AN OPEN LETTER TO THE OBAMA CAMPAIGN

Dear Obama Advisors:

Please make time to educate yourselves and the candidate about global trade. I am a volunteer phone banker for Obama, and even I found his conflating of opposition to GATT & NAFTA with xenophobia and scapegoating a very disturbing part of the controversial remarks he made last week.

I know that Sen. Obama, a man of integrity, will want to do the right thing once he understands, as clearly as the workers he was describing, that the current trade agreeements serve workers abroad no better than those in the U.S.. And grasps the primacy of "demand-side" to a prosperous economy. And learns of the equally important threat these agreements pose to effective self-governance worldwide, including environmental protection.

A good place to begin learning about the global nature of this issue is the information-filled website http://www.citizen.org/publications/index.cfm?sectionID=107, or from Global Trade Watch's longtime director and expert economic researcher, Lori Wallach. Vandana Shiva in New Delhi, India, founder and director of the "Research Foundation for Science, Technology and Ecology" is a fountain of information on wide-ranging harms these agreements have done to the disadvantaged and to self-governance globally. Obama will find that it's not a simple question of protectionism vs. internationalism.

The country can only hope that Obama learns early the far-reaching effects of the rules countries place on how mega-corporations can behave in the international sphere; our current President hasn't cared to. Thank you for kind attention.

Sincerely, Laura Stein