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Obama and Santos in Cartagena, photo AFP

Obama needs to show Colombia some love.

Colombia is the US’ closest ally in South America. But as the country continues to wait – five years and counting – for the US Congress to sign off the Free Trade Agreement, many are asking ‘why is it taking so long, Mr President?’

Earlier this year, the Obama regime promised Colombia that the FTA (TLC in Spanish) would be pushed through Congress in a matter of months. So as US politicians return to their desks this week after their summer vacation, will the breakthrough finally come?

What’s in it for the US?

Colombia is the third most populous country in Latin America, after Brazil and Mexico.

While Europe and the US economies are in the doldrums, Colombia’s GDP expanded 5.10 per cent in the first quarter of 2011 over the same quarter, previous year. Average annual GDP growth over the period 2001-2011 was 4.12 per cent.

The US International Trade Commission estimates that the FTA would increase US GDP by nearly 2.5 billion dollars, and US merchandise exports by 1.1 billion. http://export.gov/FTA/colombia/index.asp

Colombia’s star is in the ascendance.

But…less than 1 per cent of total US trade is done with the Andean country.

What’s in it for Obama?

Most agree, that job creation is the problem that Obama faces (particularly if he is to have a chance of re-election next year). Colombians – and many Republicans on Capitol Hill – argue, what better way to generate employment than a FTA with a successful but unexploited market? An easy win win, you might suggest.

So, what’s the hold up?

The recent delay has been largely due to Democrat resistance – from two positions:

Protectionism – Democrats argue the FTA could threaten American jobs (most argue though that trade liberalisation always generates more jobs than protectionism protects)

Workers’ rights – Democrats claim that not enough has been done by the Colombian government to protect Unions in the face of threats (from as George Miller – House Representative from California put it ‘death squads’).

In April this year, following a meeting with President Santos, Obama revealed that agreement had been reached with Colombia to boost labour rights. There should be no objection by Democrats to the FTA going through, he appeared to argue.Despite this, Obama has been making all the right noises.

Following that meeting, Colombia launched another diplomatic offensive to try to push the FTA over the line. At the culmination of the talks, US Sectary of State Hillary Clinton held a press conference alongside Colombian External Relations Minister Maria Angela Holguin, during which she was unequivocal in her support for the FTA:

“I hope that the people of Colombia do no lose heart in watching the activities of our Congress because there always is a lot of rhetoric and skirmishing between the parties before they finally hit the deadline. I’m absolutely sure we’re going to get it (the FTA) passed.”

So it’s a done deal?

Not yet…Colombian policy makers and business men are watching anxiously as we move into a crucial session of Congress, one that winds up the US legislative year on 8 December.

If the FTA is not pushed through during the next months it could well gather dust for quite some time. 2012 is election year and it’s highly unlikely FTAs will even be on the agenda during campaign season.

The good news is that Obama has packaged up the FTA with Colombia (alongside others with South Korea and Panama) in his growth strategy for jobs. Politically, he will want to see Congress agree them.

The fear is, however, the fierce debate surrounding Nanci Pelosi’s (minority leader of the House) bill sanctioning China for currency manipulation could derail Obama’s plan, scheduling it off the table. http://www.ft.com/intl/cms/s/0/c5f2495c-cbef-11df-bd28-00144feab49a.html#axzz1XCaFqC7k

Will there be sufficient time in Congress for further consideration of the FTA? Santos will be looking for Obama to come good on his promises and ensure that there is.

For full details on what’s contained in the FTA, click here for the 2006 report to Congress: http://www.nationalaglawcenter.org/assets/crs/RS22419.pdf

 

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