Colombia FTA

In his January 27th, 2010 State of the Union address President Obama stated that America needed to aggressively seek out new trade partners and that within five years we needed to double our exports in order to create an additional 2 million jobs in this country by creating fair and enforceable free trade agreements. One of the countries Obama specifically stated that we needed to strengthen our trade relations with in his address was Colombia, (USDOC, p. 2). President Obama has repeatedly addressed the need for the U.S. Congress to approve this treaty, yet Congress still seems reluctant to do so.

The U.S. signed a comprehensive bilateral Free Trade Agreement, (FTA), with Colombia on November 22, 2006. While Colombia’s Congress approved the agreement in 2007, we are still waiting on U.S. Congressional legislation to approve this agreement, (USTR, nod.). President Obama has tasked the USTR to address any remaining outstanding barriers against the agreement. Initial barriers to the trade agreement generally constituting issues with sanitation and other health safety concerns have long since been addressed, as well as other barriers including intellectual property rights and technology, although Obama has voiced some continuing concerns of fair labor policies in Colombia he has continually attempted to move forward on the trade agreement with Colombian President Alvaro Uribe, (Meckler, n.d.).

Once congressional approval is granted, Colombia will remove all tariffs over a ten year period on all American products, no products are excluded, with agricultural product tariffs slated to be among the first removed upon approval of the treaty. Currently, while 99.9% of Colombia agricultural imports to the U.S. are duty-free, virtually all exports from the U.S. to Colombia are tariffed at a rate between 5% and 20%; additionally many of our exports are subjected to trade restrictions, creating an un-even playing field, (USFDA).

While the U.S. is reticent to impose tariffs on Colombian products to avoid a trade war, it is clear that the U.S. Congress is operating in a protectionist fashion regarding approval of the treaty. U.S. Trade Representative Ron Kirk stated in late 2009 that he does not see the Congressional approval forthcoming as the U.S. Congress has been dealing with issues such as health care. However, the Financial Times noted prior to his confirmation that Kirk would have a tough battle ahead of him on Capitol Hill getting Congress to approve the treaty as protectionist politics were running rampant in Washington. In early 2009 54 congressional members of the House of Representatives signed a letter requesting the White House renegotiate NAFTA, cease talks with China regarding a bilateral trade agreement, and to discard any pending Free Trade Agreements, including the one with Colombia, (Beattie, 2009). Until the trade agreement with Colombia is passed, the U.S. producers will not be able to realize their full potential as trading partners with Colombia, while Colombia will continue to reap profits from tariffs imposed on U.S goods, and producers in Colombia and other countries will enjoy a continued advantage from the imposed quotas.

References:

Beattie, A. (2009, March, 10). Tough battles lie in wait for next US trade chief. The Financial Times, 4 Retrieve from PROQuest ABI/Inform Global.

Meckler, L. (2009, April 20). New movement on Colombia trade pact. Wall Street Journal Digital Network. Retrieved from http://online.wsj.com/article/SB124010048395232143.html

Office of the U.S. Trade Representative, (n.d.). Colombia FTA. Retrieved from http://www.ustr.gov/trade-agreements/free-trade-agreements/colombia-fta

U.S. Department of Commerce International Trade Administration, (2010, February -March). National export initiative looks to increase exports and create jobs. International Trade Update. 1-3. Retrieved from http://trade.gov/press/publications/newsletters/ita_0210/itu_0210.pdf

United States Department of Agriculture, Foreign Agricultural Service, (2009, September). Fact Sheet: U.S. – Colombia Trade Promotion Agreement Overall Agriculture Fact Sheet. Retrieved from http://www.fas.usda.gov/info/factsheets/Colombia/ColombiaDetailed09.pdf