A U.S.-Colombia Free Trade Agreement: Strengthening Democracy and Progress in Latin America

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The most important and contentious trade vote in Congress thisyear will probably be the free trade agreement the United Stateshas signed with its South American neighbor and ally,Colombia. In his January 28, 2008, State of the Union speech,President Bush called on Congress to approve the agreement thisyear. Calling Colombia "a friend of America that is confrontingviolence and terror, and fighting drug traffickers," the presidentwarned Congress that "if we fail to pass this agreement, we willembolden the purveyors of false populism in our hemisphere. So wemust come together, pass this agreement, and show our neighbors inthe region that democracy leads to a better life."1

Signed by the two governments in November 2006, the agreementwould eliminate most tariffs and barriers to commerce betweenboth countries. The U.S.-Colombia free-trade agreement (FTA)follows a series of similar agreements--negotiated by the Bushadministration and approved by Congress-- with five CentralAmerican countries, the Dominican Republic, Chile, and Peru.

The current Democratic Congress approved the Peru FTA late in2007 after changes were made to its environmental and laborchapters, but Democratic leaders have repeatedly claimed thatthe FTA with Colombia will not face a vote until that countryachieves as yet undefined progress in tackling violenceagainst union leaders. Organized labor in the United States, inparticular the AFL-CIO--a key constituency of the DemocraticParty--has made defeat of the Colombia agreement one of its majorpolitical goals.

Rejecting a free-trade agreement with Colombia because oflingering violence in that country would be an irresponsiblemistake by Congress. It would sacrifice our national interest in astable, peaceful, and prospering hemisphere for the sake of narrowideological and partisan interests. More than its economicbenefits, an FTA with Colombia would reward and institutionalizethe dramatic progress made in the past five and a half years by thegovernment of Colombian president Alvaro Uribe.

Why Congressional Democrats Oppose a Colombia TradeAgreement

In a June 29, 2007, statement, House Speaker Nancy Pelosi andother Democratic leaders announced their opposition to theColombia FTA. "There is widespread concern in Congress about thelevel of violence in Colombia, the impunity, the lack ofinvestigations and prosecutions, and the role of the paramilitary,"they explained. "We believe there must first be concrete evidenceof sustained results on the ground in Colombia, and Members ofCongress will continue working with all interested parties tohelp achieve this end before consideration of any FTA.Consequently, we cannot support the Colombia FTA at thistime."2

Violence is a real issue for union members in Colombia. Since1991, more than 2,200 union members have been assassinated, mostlyby right-wing paramilitaries. Colombia is the most dangerouscountry in which to be a union member, as a recent publicationfrom the AFL-CIO points out.3 And the justice system has failed in most cases:Out of so many murders, there have been only 37convictions.4However, Democratic leaders and their union allies fail to creditthe Colombian government with the dramatic progress it has madeagainst what only a few years ago seemed to be hopeless odds.

The real story in Colombia is not the current level of violencebut its dramatic fall in a relatively short period, and the creditdue the Colombian government for the progress. The number ofassassinations of union members in Colombia has dropped sharplysince 2001, a year before Colombian president Álvaro Uribewas sworn into office. From about 200 assassinations a year in 2001and 2002, the number fell by half in 2003 and has continued to fallsince then. (See Figure 1.) The AFL-CIO claims 38 unionists wereassassinated in 2007, while the Colombian Ministry of SocialProtection counts 25. Even if the higher AFL-CIO figure isaccepted, that would mark a plunge of more than 80 percent inassassinations of trade unionists during President Uribe's time inoffice; the decrease would be nearly 90 percent if theMinistry of Social Protection figure is accepted. Either numberrepresents remarkable and welcome progress under PresidentUribe.

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Trade unionist killings must also be seen in the context of asociety that for decades has been one of the most violence-plaguedin the world. Since independence from Spain in 1819, the countryhas been engulfed in violent civil conflicts that cost hundreds ofthousands of lives. In the 1960s two Marxist armed groups, the FARCand ELN, started a guerrilla war against the Colombian government.Later in the 1980s, powerful drug cartels battled theauthorities and each other in the streets of important cities suchas Medellin and Cali. Medellin was, until a few years ago, thedeadliest city in the world. In the early 1990s, right-wingparamilitary groups were formed by landowners to battle theleft-wing guerrillas. These groups soon became criminal forces oftheir own.

In the mid 1990s, once the drug cartels were dismantled, bothguerillas and paramilitary groups moved into the narcoticsbusiness. Colombia's rugged geography makes it an ideal place forgrowing illegal crops such as marijuana and coca. It is estimatedthat 90 percent of powdered cocaine consumed in the U.S. comes fromColombia.5 Thisrepresents a multimillion dollar business that illegal armedforces have exploited for over a decade.

Against this daunting backdrop, the Uribe administration hastaken decisive action. The government has established a protectionprogram for vulnerable groups of society. Currently 1,504 unionmembers have enrolled in the program, more than any other group ofcivil society. Working with the International Labor Organization,Colombia has created a special unit under its Attorney Generalto investigate priority cases of violence against tradeunionists.6 Unionmembers still get assassinated, but they account for less than onein ten civilian assassinations by illegal armedgroups.7 Othergroups targeted for violence include teachers, journalists,business leaders, and politicians, most of whom are members ofPresident Uribe's own party.

The AFL-CIO repeatedly cites the figure of 2,245 labor unionmembers killed in Colombia since 1991 as a central argument for notapproving the trade agreement. But that figure is heavilyfront-loaded, with more than four out of five of those killingstaking place prior to President Uribe's administration.Instead of giving Uribe due credit for the dramatic decline inkillings, the AFL-CIO insists on punishing the currentpresident and the people who elected him for the failures of pastadministrations.

Unfortunately, left-leaning groups in Colombia havecolluded with labor interests in the United States to convincethe Democratic leadership in Congress that this FTA should bedefeated on humanitarian grounds. There is more ideologybehind the opposition to the agreement than real concern for unionmembers in Colombia. For example, Gustavo Triana, an official atthe Central Unitaria de Trabajadores, Colombia's largest laborfederation, says that "Free trade is killing us as much as bulletsare."8 Equatingpeaceful, voluntary trade with murdering bullets is a grosscomparison that shows the ideological agenda behind much of theopposition to an FTA.

A Complicated Country, a RemarkablePresident

President Álvaro Uribe is a rarity in Latin Americanpolitics. After five years in office, his approval ratings arestill very high, currently above 80 percent. He was reelected in2006 with a whopping 62 percent of the vote. The reasons behindUribe's popularity are clear for anyone who has followedColombian current events in the last decade. The president'spolicies have delivered more safety, security, and economicopportunity for the citizens of Colombia.

Since he first assumed office in 2002, President Uribe has madeimpressive progress in stemming violence in his country, not onlyviolence against trade unionists. His government has boostedpolice presence in every major city and region of the country. Morethan 30,000 paramilitary fighters have returned to civilianlife.9 Throughmore aggressive policing and military action against insurgents,the level of violence has dropped dramatically. Since 2002,homicides have declined by 40 percent, kidnappings by 82 percent,and terrorist attacks by 77 percent (see Table 1).10

Before Uribe's tenure, Colombia was considered on the verge ofbecoming a "failed state." The Marxist guerillas who had waged awar against the Colombian government for almost 40 years controlledan area the size of Switzerland. Thousands of kidnappings andassassinations made Colombia one of the most violent countries inthe world. As former U.S. assistant secretary of state for westernhemisphere affairs, Otto Reich, noted, "Barely 5 years ago,the big debate inside the U.S. Government centered on how long thegovernment of Colombia could survive."11

Table 1Colombia's Progress against Violence, 2002-2007


2002 2007 Change
Common homicides 28,837 17,180 -40%
Civilians assasinatedby illegal armed groups 2,087 358 -83%
Trade unionists killed 205 25 -88%
Kidnappings 2,882 515 -82%
Total terrorist attacks 1,645 381 -77%

Source: Colombian Ministry of Defense and Ministry of SocialProtection.

Uribe's policies have changed Colombia. He adopted a toughpolicy against the Marxist guerrillas by strengthening the army'spresence in rural zones and pushing the FARC out of centralColombia. He also pushed for a controversial plan to persuade theparamilitary groups to disarm in exchange for reduced sentences andincentives to reincorporate former paramilitaries into theworkforce. This process has not been exempt from criticism. Manyargue that demobilization of paramilitaries represented anamnesty to confessed criminals. Others point out that manydemobilized paramilitaries have gone into regular criminalactivities. However, the numbers clearly show that crime hasplummeted under Uribe's watch. Today, Medellin has a lower percapita homicide rate than Baltimore. Colombia is still a veryviolent country, but critics fail to see the greater picture whenlooking at crime data without taking into account the trends of thelast five years.

Not only have crime figures improved during Uribe's presidency,economic and social indicators also show remarkable progress.The economy, which grew at an average of 5 percent in the last fouryears, is estimated to have grown by almost 7 percent in 2007.Direct foreign investment ballooned from $2.1 billion in 2002 to$6.3 billion in 2006 (a 200 percent increase). Poverty hasfallen by 11.9 percentage points to 45 percent during the sameperiod.12 Theunemployment rate has fallen from 15 percent to 11percent.13 Acombination of pro-growth policies and improved security hasdelivered better living conditions for millions of Colombians.

A Friend in a Region of Foes

The importance of Colombia has grown in recent years given theideological battle taking place in the Andean region. With theascendancy to power of populist left-leaning presidents in SouthAmerica, President Uribe stands as the closest U.S. ally in LatinAmerica. Even more, Colombia is now surrounded by two anti-Americanpresidents who have friendly ties or are sympathetic to the Marxistguerillas: Venezuela's Hugo Chavez and Ecuador's Rafael Correa.

The situation is particularly troubling in the case of Chavez.The Venezuelan president has repeatedly tried to export his"Bolivarian" (socialist) revolution to other Latin Americancountries, taking advantage of a windfall in oil revenue ofapproximately $300 billion since he came to power.14 President Chavezhas openly supported the political campaigns of left-leaningcandidates in the region such as Evo Morales (Bolivia), ShafikHandal (El Salvador), Daniel Ortega (Nicaragua), Ollanta Humala(Peru), and Rafael Correa (Ecuador). Moreover, in the last fouryears Chavez has spent $4 billion in armaments.15

Chavez's ties with the guerrillas are well known. Venezuela hasbecome a safe haven for the FARC and other terrorist groups. The2006 International Narcotics Control Strategy Report saysthat "Colombian guerrilla organizations... move through parts ofVenezuela without significant interference by the Venezuelansecurity forces."16 Recently, Chavez stated that the guerrillas were"real armies" whose political project was respected by theVenezuelan government.

Having the closest ally of the United States in the region rightnext door has always been a thorn in Chavez's side. Therelationship between him and President Uribe recently turned bitterover a failed mediation effort from the Venezuelan presidentwith the Colombian guerrillas to release dozens of hostages thatthose groups have retained for more than five years. Both leadersexchanged recriminations, with Chavez calling Uribe "a sad pawn ofthe [U.S.] empire"17

Venezuela is the second largest market for Colombian exports,and many fear that the diplomatic crisis between the countriescould lead to a Venezuelan blockade--something Chavez has alreadythreatened on several occasions--that could have seriousconsequences to Colombia's economy.

Enter the U.S.-Colombia FTA

The proposed trade agreement with Colombia grew out of America'spolicy engagement with Colombia since the early 1990s. In 1991, aDemocratic Congress enacted the Andean Trade Preferences Act. Thebipartisan law, which is up for renewal again in 2008, allows 90percent of Colombia's exports to enter the United States duty free.Since the late 1990s, in an effort instigated by then-PresidentBill Clinton, Congress has appropriated more than $5 billion in aidfor "Plan Colombia," a Colombian government program to battleviolent insurgents and eradicate the production of illicitdrugs.

The free trade agreement with Colombia was designed to bothstrengthen civil society in Colombia and also to open economicopportunities for U.S. producers to sell to the country's 44million upwardly mobile, American-friendly consumers.

Like similar agreements the United States has already negotiatedin the region, the agreement would knock down barriers to U.S.exports. More than 80 percent of U.S. exports of consumer andindustrial products to Colombia would become duty free onenactment, and remaining tariffs would be phased out over the next10 years. For American farmers, the agreement would deliverimmediate duty-free access for high-quality beef, cotton, wheat,soybean meal, and major fruits and vegetables (including apples,pears, peaches, and cherries) and many processed foods, includingFrench fries and cookies. It would improve access for exportedpork, beef, corn, poultry, rice, and dairy products.18

The agreement would also strengthen investment protectionsfor U.S. companies trying to reach Colombian consumers with adirect presence. It would guarantee the nondiscriminatory rightsfor U.S. companies to bid on contracts for a broad range ofColombian government ministries, agencies, and regional governmentsand better access for U.S. telecommunication service providers. Itgoes further than previous bilateral agreements to meet theever-shifting demands of trade agreement critics for enforcement ofcertain labor and environmental standards withinColombia.19

Two-way trade between Colombia and the United States amounted to$15.9 billion in 2006 and was on course to top $17 billion in 2007.That is similar to the value of America's two-way trade with Chile,another FTA country, and nearly double our trade with Peru, whichbecame an FTA partner in 2007.20

Because U.S. tariffs are already low to non-existent on thelarge majority of imports from Colombia, the agreement should notarouse the opposition of domestic special interests. More thanhalf of our $9.3 billion in imports from Colombia in 2006 werepetroleum and coal. Another sixth of our imports from Colombia areagricultural products, with coffee beans and cut flowers dominatingthe trade. Apparel and shoes made up about 6 percent of ourimports, amounting to less than half a billiondollars.21

America's most competitive exports to Colombia in 2006,comprising more than 40 percent of U.S. goods sold there, weremanufactured products such as drilling and oil-field equipment,excavating machinery, computers and computer accessories,telecommunications equipment, and medical equipment. Othermajor categories of U.S. exports were chemicals and agriculturalproducts, with corn being by far the top U.S. farmexport.22 Theagreement would eventually eliminate Colombia's 11.3 percentaverage tariff against U.S. farm goods compared to the average U.S.tariff of 0.1 percent under existing preferenceprograms.23 ADecember 2006 study by the U.S. International Trade Commissionestimated that the agreement would boost U.S. exports by $1.1billion.24With Colombian exporters already enjoying virtually duty-freeaccess to the American market, a trade agreement would deliver the"level playing field" that skeptics of trade are alwaysdemanding.

The Consequences of Saying "No"

A comprehensive trade agreement would also benefit Colombia byopening its market to more import competition, encouraging moreforeign investment, and strengthening its ties to the world'slargest economy. If Congress were to reject such an agreement, itwould inflict real pain on the Colombian economy and workers. Arecent study by the University of Antioquia shows that notapproving the FTA would decrease investment by 4.5 percent inColombia. Furthermore, it would increase unemployment by 1.8percentage points, representing a net loss of 460,000 jobs.GDP would go down 4.5 percent, and the poverty level would rise by1.4 points.25

It is not in the U.S. interest to inflict this kind ofeconomic punishment on an ally in the Andean region. Left-wingpopulism is fueled by poverty and lack of opportunities, ascan be easily seen in neighboring Venezuela, Ecuador, and Bolivia.Strong democratic institutions rely heavily on economicdevelopment. The United States should promote it. This is veryclear to Colombians. Sergio Fajardo, the popular mayor of Medellin,has said, "What do we have friends for? To make the problems worse?Our friends should help us to make things better."26

Then we also have the political significance of rejecting theFTA, which has already been approved by the Colombian Congress andis supported by a majority of Colombians. President Uribe hasalready made it clear that the relationship with the United Stateswould be affected if the FTA is rejected. On a recent visit toWashington, he said that his country will not be part of "arelationship wherein the United States is master and Colombiais a slave republic."27 It is difficult to interpret the realmeaning of Uribe's words, but it is clear that the United Stateswould find a less cooperative Colombian president if the FTAis rejected.

One more point to consider is the institutionalimplications of such a decision. One of the major mistakes ofU.S. foreign policy in the last 60 years is reducing bilateralrelations with nations to personal relations with a specificleader. When that leader is gone, the diplomatic relation with thatcountry starts anew, in some cases for the worse. There is a strongrisk that the United States is making the same mistake in Colombiawith President Uribe. After he is gone, nobody knows who will comeand what his or her attitudes toward Washington will be. It istherefore imperative that the United States institutionalize itsrelations with Colombia through a bilateral commercial agreementthat locks both countries into permanent economic ties.

Conclusion

Colombia has been a strong ally of the United States in recentyears. It has also been a nation torn by civil conflict and viciousviolence. However, under the leadership of President ÁlvaroUribe, the country has gone through remarkable improvements in mostsocioeconomic indicators.

President Uribe has invested a lot of his political capital inreaching an FTA with Colombia's closest ally. However, spurred bythe opposition of organized labor in the United States, theDemocratic leadership in Congress has threatened to thwart theapproval of the agreement under complaints that Colombia is theworld's most dangerous country for organized labor. Though true,Democrats fail to acknowledge that Colombia is a violent country ingeneral and that killings of union members have been significantlyreduced under President Uribe's watch.

Blinded by narrow parochial concerns, the Democratic leadershipin Congress also fails to understand the importance ofColombia in a region where left-leaning anti-American leaders arecoming to power under populist agendas, like Venezuela's HugoChavez. As the Wall Street Journal's Mary O'Grady haswritten, "Either the Democrats have very poor foreign policyjudgment or they have sympathy for the devil."28 However, not allDemocrats share the same miscalculations. An open letter byprominent Clinton administration officials and former Democraticmembers of Congress states that "it would be the height of ironywere we to talk of 'losing' Latin America while refusing to takeactions that would directly support fundamental relationships andinterests in the region."29 Canada's prime minister Stephen Harper offeredfriendly and wise advice when he stated, "If the U.S. turns itsback on Colombia, it will set us back more than any Latin Americandictator could hope to achieve."30

In a comprehensive study last November, the Center for Strategicand International Studies in Washington concluded that thegovernment and people of Colombia have more than merely avoided adisaster under President Uribe:

They have rolled back the influence of theparamilitaries and insurgents, established a state presence inevery municipality of the country for the first time in history,sharply reversed levels of violence and criminality, improved theobservance of human rights, enhanced the capacity of the state togovern more democratically, and set the economy moving in a verypositive direction.31

Approving a free trade agreement with Colombia is aboutsupporting a market democracy in a region where liberal valuesare under attack. It is about being a reliable partner inturbulent times. It is also about building long-lastinginstitutions for economic prosperity and democracy formillions of Colombians.

Notes


1 The WhiteHouse, "President Bush Delivers State of the Union," Transcript,January 28, 2008, www.whitehouse.gov/stateoftheunion /2008/.

2 Office of theHouse Speaker, "Pelosi, Hoyer, Rangel, and Levin Statement onTrade," June 29, 2007, speaker.house.gov/newsroom/pressreleases?id=0235.

3 AFL-CIO,"Workers' Rights, Violence and Impunity in Colombia," January 9,2008,www.aflcio.org/issues/jobseconomy/globaleconomy/upload/colombia_briefin….

4 "Getting to aColombia Trade Deal," New York Times, Editorial, May 29,2007.

5 David J.Lynch, "Colombia Works to Escape Its Past," USA Today,October 4, 2007.

6 Peter DeShazo,Tanya Primiani, and Phillip McLean, "Back from the Brink:Evaluating Progress in Colombia, 1999-2007," Center for Strategicand International Studies, November 2007, p. 29.

7 ColombianMinistry of Defense.

8 Lynch.

9 DeShazo,Primiani, and McLean, p. 14.

10 ColombianMinistry of National Defense.

11 OttoReich, "Support Colombia with FTA," Latin BusinessChronicle, July 3, 2007, available at:http://www.latinbusinesschronicle.com/app/article.aspx?id=1425.

12 TheEconomist Intelligence Unit, "Colombia Country Report," October 9,2007.

13 R.Nicholas Burns, under secretary for political affairs, U.S.Department of State, Speech to the Council of the Americas, October22, 2007.

14 GustavoCoronel, former member of the Board of Directors ofPetraleos de Venezuela (1976-79), www.lasarmasdecoronel.blogspot.com. For figures updated to 2006, see also Coronel,"Corruption, Mismanagement and Abuse of Power in Hugo Chavez'sVenezuela," Development Policy Analysis no. 2, Cato Institute,November 27, 2006, p. 5.

15 Ibid., p.9.

16 U.S.Department of State, Bureau for International Narcotics and LawEnforcement Affairs, International Narcotics Control StrategyReport, vol. I, March, 2006, p. 123.

17 "Sad PawnSent to Freezer," The Economist, December 1, 2007, p.50.

18 Office ofthe U.S. Trade Representative, "Free Trade with Colombia," TradeFacts, June 2007.

19 Ibid.

20 U.S.Census Bureau, "Trade in Goods (Imports, Exports and Trade Balance)with Colombia," www.census.gov/foreign-trade/balance/c3010.html#2007.

21 U.S.Census Bureau, Foreign Trade Statistics, "End-Use Data: Country by5-digit End-Use Code, Annual totals for Colombia,"www.census.gov/foreign-trade/statistics/product/ index.html.

22 Ibid.

23 Office ofthe U.S. Trade Representative.

24 JamesStamps, "U.S.-Colombia Trade Promotion Agreement: PotentialEconomy-wide and Selected Sectoral Effects," U.S. InternationalTrade Commission, Publication no. 3896, December 2006, p. iii.

25 Jesus A.Botero, et al., "El TLC con Estados Unidos: Efectos de suaprobacian y costos de no aprobarlo," Universidad deAntioquia, June 4, 2007. pp. 78-80.

26 Quoted inLynch.

27 Quoted in"Trade Double-Cross," Opinion Journal, Wall StreetJournal, July 5, 2007.

28 MaryAnastasia O'Grady, "The Democrats' Colombia Agenda," WallStreet Journal, July 9, 2007, p. A14

29 LeonPanetta et al., "Open Letter to Congressional Democrats," LatinBusiness Chronicle, September 24, 2007,www.latinbusinesschronicle.com/app/article.aspx?id=1663.

30 StephenHarper, "U.S. Must Support Colombia," Latin BusinessChronicle, October 1, 2007, www.latinbusinesschronicle.com/app/article.aspx?id=1670.

31 DeShazo,Primiani, and McLean, p. 1.