US Relations

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U.S. media washes hands of Colombian free trade criticism

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Now that the damage is done, the Free Trade Agreement (FTA) is signed, and up and running, the United States has been conspicuously absent from the conversation about Colombia’s agricultural strikes.  Although newsworthy in England, Spain, Germany, and other European countries, most mainstream U.S. media outlets failed to take note of the manifestations until President Santos deployed 50,000 troops in Bogotá last Friday after protests got out of hand.

While The Guardian and the BBC published detailed accounts of the strikes, coverage in The New York Times and other U.S. publications has been limited.  The New York Times reprinted a short Associated Press piece on the militarization of Bogotá eleven days after the strikes began, but failed to mention Colombia’s FTA with the U.S.  With the exception of Reuters and The Huffington Post, coverage in other mainstream media outlets has mainly focused on President Santos’ response to demonstrations in the capital.

Although you wouldn’t know it from U.S. newspapers, there have been many newsworthy aspects of the now 19 day agrarian strike in Colombia.  For one, farmers in several regions of the country have managed to block major highways for close to two weeks, defying soldiers and riot police.  Tens of thousands of people across the country have gathered to bang pots and pans in a show of solidarity with the campesinos that has been remarkably widespread.  Their demonstrations have been met with excessive force on the part of Colombia’s riot police, prompting Archbishop Luis Augusto Castro Quiroga and local government officials in the department of Boyacá to publicly denounce the abuses.

Even more noteworthy, in terms of U.S. government and business interests, is the relationship between the FTA implemented in May of 2012 and current protests.  Considering the fact that this agreement is partly to blame for the farmers’ worsening economic conditions in Colombia, you would have thought it worth at least a passing mention.  Among other petitions, the striking farmers are asking the government to stop the importation of various agricultural products and demanding the immediate suspension of free trade agreements with the U.S. and the European Union.

Since the FTA between the United States and Colombia has gone into effect, both governments have touted the deal as a harbinger of economic growth.  A message on the website of Colombia’s U.S. Embassy reads, “With the FTA in place, U.S.-Colombia trade partnership is stronger than ever and the highly complementary U.S. and Colombian economies are reaping the benefits.”

The attached report goes on to highlight the fact that in the sixteen months the FTA has been in effect, U.S. agricultural exports to Colombia have increased by an astounding 68 per cent.  Barley, corn, cotton, wheat, and soybean farmers in the U.S. are enjoying the immediate elimination of tariffs, and poultry and pork producers are sure to benefit over the next five to ten years as their products become tariff-free.

The Colombian Embassy website proudly points out that U.S. farmers “are active in [their] support of the FTA.”

And why wouldn’t they be?  In 2012 U.S. farmers received $15 billion in agricultural subsidies from the U.S government.  They are now enjoying the elimination of tariffs on more than 70 percent of their exports to Colombia.  The International Trade Commission predicts that the FTA will increase U.S. GDP by a total of $2.5 billion.

For farmers in Colombia, however, the Free Trade Agreement has brought nothing but misery.  With small plots of land and limited technology, most farmers can’t compete with the sudden influx of agricultural and dairy products from the U.S. and Europe.  Coupled with the rising costs of production, free trade agreements have created an untenable situation in which farmers can’t make ends meet.

Before the FTA, potato farmers from the departments of Boyacá and Cundinamarca were protected by a 5 to 20 per cent tariff leveled on U.S. tuber imports. Now there is nothing standing between them and financial ruin.

Farmers of other agricultural products have met the same fate.  Oxfam International estimates that the average income of 1.8 million small farmers in Colombia will drop 16 per cent as a result of the FTA.  According to a 2011 Oxfam report, 400,000 farmers who were living on less than minimum wage before the FTA was implemented will lose between 48 and 70 per cent of their earnings.  They will undoubtedly join Colombia’s massive internally displaced population—the largest of any country in the world.  In fact, these farmers are likely part of the reason the number of internally displaced people increased by 46 per cent in 2012 in comparison with the previous year, according to a report published by the Consultoría para los Derechos Humanos y el Desplazamiento (CODHES).

In response to protester demands, the Colombian government announced the suspension Thursday morning of a controversial resolution regulating the seeds Colombian farmers are allowed to plant in their fields.  Resolution 970 of 2010, which applies intellectual property laws to seeds, prohibits farmers from reusing patented seeds for commercial purposes.  Instead of continuing their tradition of recycling seeds from year to year, farmers must buy new seeds after every harvest or risk paying fines and spending time in jail.

Although the Instituto Colombiano de Agricultura claims that similar regulations have been in place since 1976, renewing this type of agreement through Resolution 970 was a requirement for U.S. approbation of the FTA.

It remains to be seen whether or not the mainstream U.S. media and the U.S. government will start to pay attention now that Monsanto and other genetically modified seed corporations are at risk of losing money.

Category: Comment, US Relations
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Plan Colombia and the FARC

farc group

 

Plan Colombia’s success reducing coca cultivation and strengthening Colombia´s democracy was tackled in two earlier articles, here I ask how it helped the fight against the FARC guerrillas.

When Plan Colombia started in 2002 the terrorist group stood 18,000 strong. Today they are a much smaller, more dispersed, yet still dangerous guerrilla group, currently in negotiations with the Colombian government to end their near 50 year fight.

While Plan Colombia originally focused on stemming the flow of illicit substances into major American cities, the events of 9/11 and the election of President Uribe, who campaigned for hard line measures against guerrilla groups, changed the rhetoric. And over 75% of Plan Colombia’s funding has been devoted to military and police assistance.

A success?

But despite this spending and while there have been high profile successes against the FARC throughout this period, the illegal group´s ability to adapt, innovate and remain a significant threat is notable.

When Plan Colombia began, Colombia was considered a failing state, and there were those who saw the FARC as a serious challenge to the authority and longevity of the Colombian state. The ability of the armed forces to halt the guerrilla´s progress was far from guaranteed. They were fighting against a well oiled and well funded military machine in the FARC.

Academic Jim Rochlin explains Plan Colombia´s work as a process to transform the Colombian military from an immobile, vulnerable and predictable force into a rapid, all terrain military machine capable of defeating a highly successful and well funded guerrilla group.

Plan Colombia sought to provide the Colombian military with a better level of equipment, training and intelligence capabilities. It was essential the military were trained for fighting in difficult terrain; high mountains and rivers.

Plans Patriota and Victoria

In 2004, President Uribe responded by enacting Plan Patriota which saw the deployment of 17,000 soldiers in an effort to debilitate the FARC. Plan Patriota´s success was mixed. During the operation of this plan, the FARC´s military capacity was shown with devastating effect. A 2006 attack on a bus full of innocent civilians in southern Colombia became an emblem of the group´s ability to strike at the heart of the nation.

Plan Victoria however, had far greater success. A key factor in this success was the role of intelligence and surveillance. A long standing problem in the Colombian military´s fight against the FARC was their inability to locate and target the guerrilla’s group’s senior leadership.

Colombian officials would often use the ‘impenetrable jungles’ as an excuse for such limited action where raids were impossible and bombing attacks too indiscriminate. Under Plan Colombia however, real time surveillance equipment was available to the Colombian military and included the use of heat sensors capable of detecting human activity, land radar systems, command and control systems for radar, the translations of intelligence analyses, improved logistical support and night vision goggles.

Such increased capabilities came to fruition in 2008, a year in which the FARC suffered numerous losses. An attack by the Colombian military on a FARC camp in Ecuador of that year saw the killing of the group´s second in command, Raul Reyes. The attack relied heavily on Plan Colombia’s heightened intelligence and surveillance capabilities and remains one of the msot successful hits against the rebel group.

The FARC suffered further serious setbacks in March 2008 when the group’s leader, Manuel Marulanda died of natural causes and the secretariat’s youngest member, Ivan Rios was murdered by one of his own bodyguards in exchange for a monetary award offered by the Colombian government.

The Santos regime has continued where the Uribe administration left off in terms of hitting the FARC secretariat. In September 2010, top military chief Mono Jojoy was killed in one of the first acts of the new government, and a year later Alfonso Cano, then leader of group was also taken out by the army while many assume Santos was negotiating in secret with the FARC to establish the talks today ongoing in Cuba.

The FARC’s control and command communications has also been weakened as a result of Plan Colombia, and the FARC’s declining membership can be attributed to this, along with demobilisation programmes. In 2002 for example, FARC soldiers numbered approximately 18,000 while today they are estimated at 8,000.

Despite such a drop in numbers, and a four year period in which the FARC suffered severe military setbacks, the guerrilla group still pose a significant threat (if not to the state itself as they once did). They have adapted to the increasing capabilities of the Colombian military and continually launch counter attacks due to their weaker position. (i.e. they are less able to launch military offensives).

This is highlighted by their response to the military’s successes of 2008. The FARC adapted, dispersing into smaller units in an effort to avoid surveillance and initiating more defensive, guerrilla like attacks. These include multiple pipeline bombings in the Putumayo municipality immediately after the death of Raul Reyes, and the execution of Luis Francisco Cuéller, the governor of Caquetá in December 2009.

In 2010, the FARC were responsible for the killing of 460 members of the security forces – and alarmingly – 2011 produced more casualties than 2002, when their membership was at its height.

Such attacks included a bomb blast in Antioquia, the use of mortars at a police station in Cauca and the continued use of mine’s throughout rebel controlled areas. In February of this year, seven members of the Colombian military were killed by the FARC and only this week, the FARC are accused of kidnapping two Spanish nationals, although they deny this.

What next?

The topography offered by Colombia is a key reason that the FARC have been able to successfully adapt their tactics in the face of Plan Colombia, and remain a live threat. Despite significant funding, the Colombian military have found it very difficult to control the remote and sparsely populated regions.

As such, despite the FARC being the military weaker side, Colombia´s geography mitigates the government’s advantage somewhat, thus making the rebels able to endure for longer periods. The rugged terrain of Colombia, with its high mountains, dense forests and other inaccessible landscapes, favours smaller guerrilla units as they are harder to detect and defeat. They can retreat to such terrain where they are protected from an enemy with increased capabilities and thus find it easier to regroup, rearm and continue fighting.

The FARC´s current leader, Timochenko has taken the rebels into negotiations with the Colombian government (although it is understood Cano himself initiated these talks) in an apparent effort to bring an end to a conflict that stems beyond the FARC’s inception in 1964.

That this is a sign of weakness by the FARC or by Santos himself is arguable, yet while negotiators mediate in Havana, the FARC and the Colombian military continue to battle back home. There is a long way to go before Plan Colombia objective of defeating the FARC can be realised. Many see the current state of play as a form of stalemate in which a negotiated end to the conflict is the most effective way out.

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Plan Colombia: A success?

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Plan Colombia has seen the United States provide approximately $8 billion worth of aid to Colombia since 2000.

Over the course of three articles I will look at how (and the what extent) Plan Colombia has worked to strengthen democracy, combat the Revolutionary Armed Forces of Colombia (FARC), and in this first piece, reduce  coca cultivation and trafficking.

When President Pastrana presented Washington the original version of Plan Colombia in 1999, the Colombian state was at a breaking point. The internal conflict had pushed the economy into crisis with the unemployment rate at a staggeringly high 18.2% and GDP retreating by 4.2%. The worst figures this side of the Great Depression.

Pastrana saw Plan Colombia as a way of reviving Colombia and issues such as coca cultivation were secondary concerns that would resolve themselves after peace had been achieved. The American Congress however had a different idea and  reformed Plan Colombia into an anti narcotics initiative, focusing aid on reducing the production and trafficking of cocaine from Colombian fields into major American cities.

Has it worked?

There are inconsistencies between the figures the United States and the United Nations have on coca cultivation but it´s clear Plan Colombia has reduced cocaine production. The UN shows that in 1999, 680 tonnes of cocaine were produced in Colombia; by 2011 (the latest figures available) this had reduced almost 50 per cent, to 345 tonnes. The US reports even more favourable results, suggesting a reduction from 520 to 195 tonnes over the same period.

Despite these positive results, initial efforts to stem cocaine production were not so successful. When Plan Colombia began, aerial eradication campaigns saw over 380,000 hectares of coca fields fumigated between 2000 and 2003.

The strategy was successful in reducing the hectares of land cultivated with coca crops, yet it  failed to stem cocaine production throughout this period. In 2007 for example, after seven years of continuous spraying increases, the UN statistics showed that cocaine production had risen to 600 tonnes per annum.

Why? Colombian coca farmers played the game and knew how to compensate for the effects of the aerial eradication campaign – they reduced the size of their fields, made their plots harder to find, and increased their per hectare crop yield. In short, innovation delayed the success of aerial eradication.

Farmers were forced to innovate, as for many there was no viable economic alternative to coca production. Worse, the attempts to resolve these economics have been weak, and played second fiddle once Alvaro Uribe was elected in 2002. Uribe undeniably achieved great success using Plan Colombia in his fight against the FARC,  but his relentless focus on tackling the security issues meant economic development plans were something of an after thought. Military funding and action eclipsed efforts to resolve the socio-economic factors behind illicit crop production.

Positive inducement schemes were introduced by Alvaro Uribe however, and ran from 2005 -2009. The objective was to create jobs with economic potential for rural families in conflict prone areas.

Despite the USAID mission in Colombia reporting ‘significant progress’ through 2010, the scope of the success has been limited by both the (restricted) size of the programme and security concerns.

In 2008, the Government Accountability Office (GAO) found that the alternative development programmes were – unhelpfully – not located in areas where the majority of coca is grown. And US experts, Jason Spellberg and Morgan Kaplan argue coca farmers have not been taught how to generate wealth independently.

But production has reduced in more recent years

Yes; analysts attribute this to a switch in focus from aerial eradication campaigns to more intensive, manual eradication. This strategy is more effective than aerial fumigation as it both kills the plant directly, and has the knock on effect of building a more significant government presence on the ground.

Risks, are however, higher as the military are more exposed. FARC and ELN guerrillas work to sabotage efforts, routinely laying mines and IED’s in coca fields. Such dangers may explain why manual eradication has been on a downward trend since 2010, despite its proven success.

Production is also down because of the increase in the presence of the security forces and the fact the guerrilla groups have been pushed back from areas they once controlled.

Statistics compiled by the US and the UN suggest Plan Colombia has been effective in reducing the production and trafficking of cocaine. The discrepancy in figures between the two bodies  however, troubles us. To understand the full success a more transparent and detailed methodology for data collection is needed.

Of course Plan Colombia has other aims too…We´ll look at those over the coming days.

Photo, Open Briefing

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Another Obama speech that didn’t mention Latin America

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A guest piece by Silvio Canto JR.

It is getting harder and harder to take President Obama seriously.  Can someone explain to me how last week’s “campaign speech” contributed to fixing our problems, or even understand them?

I agree with The Dallas Morning News: President offers programs but no debt solution 

He wants Congress to vote but forgets to tell us that the Senate Democrats have not passed a budget or even brought any of the Obama proposals to a vote. Does anybody remember the last time that the Senate Democrats put a serious issue to a vote?

Am I the only one who feels insulted by this man’s total lack of seriousness or disregard for reality?

Tuesday night, President Obama continued his disregard for Latin America. I guess that President Obama must think that Latinos just spend the whole day thinking about “immigration reform” or anticipating “5 de Mayo” speeches.

Down under, and I mean south of Texas, we see violence exploding in Central America. The cartels are getting crushed in Mexico so they are finding fertile terrain in little countries like Guatemala and Honduras.

We spoke yesterday on my show with Ray Walser of The Heritage Foundation & Juan Gutierrez, a businessman who ran for president of Guatemala. They are both alarmed by what is happening in the region.

Even more dangerous, we see growing signs of Iran’s influence in Latin America.

Benny Avni reminds us of the Caracas-Tehran romance that will not promote US interests in the region:

“Western intelligence agencies have been watching Venezuela’s dealings with Iran with increasing alarm. Iran and its allies (including Syrian President Bashar Assad) get gasoline from Venezuela, which in return buys Iranian know-how – perhaps in housing, but surely in arms and other sinister stuff.
Trade between Iran and Latin America rose to $3.6 billion in 2011. With the exception of Brazil, the largest trading partners (Argentina, Ecuador, Bolivia and Venezuela) were largely motivated by anti-Americanism.” (Avni)

This is happening 3 hours south of Miami!

President Obama’s indifference has divided Latin America into two blocs: The leftists who love preaching socialism and doing business with Iran; and the success stories, like Colombia, Peru, Chile & Mexico, who must be wondering if President Obama understands what is happening south of the border.

Frankly, it’s frightening to watch how President Obama has mastered the art of pandering, from calls for minimum wage & telling “hispanos” what they want to hear.

At the same time, it is even more frightening to see how Latin America is getting away from us because we have a leader who does not understand that “leadership” is also part of the job description.

Silvio Canto JR is author of the book, Cubanos in Wisconson, runs the US/Latin American talk radio show and writes here 

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Romney, Obama neglect Latin America

USA Presidential candidates Mitt Romney and Barack Obama Monday night debated head to head for the final time before polls open on Tuesday 6 November, barely touching on the continent that sits on their doorstep.

In fact Latin America has gone virtually unmentioned throughout the campaign.

What do we expect? US elections are historically policy light, and almost foreign policy free. Add to this the crises in the Middle East and many will conclude that Latin America is, frankly, not a priority for the two men fighting to become the leader of the free world.

However, the cultural ties, the growing middle class and the rapidly expanding economies of the US´ southern neighbours – not to mention the ideological war between the liberal and authoritarian socialist states that splits the region – mean that now more than ever Latin America DOES matter.

So it was predictable but disheartening that in the 90 minutes of debate last night – a debate on the international relations – Latin America featured for little more than 20 seconds.

Mitt Romney, as he has done in previous debates, mentioned his promise to boost trade with the countries south of the border, likening the size of the ´Latin American economy´ to China´s. Obama failed even to respond, ignoring the latino voters who polls suggest in their majority side with the current Commander in Chief.

Obama´s advisers argue that his record speaks for itself. He has signed free trade agreements with Panama and Colombia, and has visited the region more than most other US Presidents, they point out.

Fair enough, but the trade agreement with Colombia was virtually done before he got into office and he took three years to get it through Congress.

And ok, Obama has indicated that he is at least willing to let the discussion about changes to drug prohibition policy to take place, but how involved he will become in this discussion we will have to wait and see).

It is also probably – on balance – a good thing for regional security that Obama has toned down the rhetoric on Chávez. The US is better served through soft diplomacy; quietly working with allies, supporting trade and democracy.

So we know Obama´s record and whilst it hasn´t been bad,  it hasn´t been good either; a 5 out of ten, perhaps.

If Obama is re-elected we should expect more of the same, a cool disinterestedness.

Should the polling momentum continue with Romney and should the US wake up on the 7 November with a new president, however, what will we get from a Romney administration? What do we know about his views on Latin America?

Well, not much. The Latam page on the Republican candidate´s campaign website could be condensed into two phrases ´socialism bad´ ´trade good´, and that´s about as much as we get.

The Governor has promised to sign more trade agreements, but the US has trade agreements with pretty much every country that wants one.  As ABC news said today:

The countries without U.S. trade agreements like Ecuador, Bolivia, Venezuela, Brazil, Argentina, Paraguay, Uruguay and Cuba are not very interested in entering into one.

Colombia Politics does not doubt Romney´s comitment to trade and perhaps he will pursue a more dynamic approach to the issue through his promised Campaign for Economic Opportunity in Latin America (CEOLA).

But on the issue of drugs, there is very little to suggest Romney has the will or the authority to take on those in his party who fail to see beyond the status quo.

For this reason alone, the prospect of a Romney presidency is perhaps the less desirable outcome for Colombia. The debate on narco-trade and the total failure of the war of drugs is not something we can wait four more years to discuss.

Whoever wins. however, there is little to suggest a real and positive change in relations.

Washington, like much of Europe, has failed to grasp the opportunities Latin America presents. Neither Obama nor Romney appear to care – they should.

Category: US Relations
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Colombia US trade agreement – it’s the politics, stupid!

After years of procrastination, the US Senate is expected finally to sign off the Free Trade Agreement with Colombia – the House has already voted in favour.

Don’t listen to the misguided voices against it, the FTA is an important and necessary step – both for Colombia and for the US.

While for Colombia the advantages of privileged access to the largest market in the world are obvious, the FTA is – for this website – of even greater importance to the US.

Failure to sign the agreement on the part of the US would represent an economic and diplomatic retraction in a key emerging market in a region of strategic geopolitical importance.

Economically the US is already in retreat in the continent. Chinese investment in Latin America continues to rise – exponentially. If the US doesn’t act China will soon become the major economic force in the region.

But the agreement is about more than just trade and the economy. The FTA is also crucial for US foreign policy. There are signs the US’ influence in the South is on the wane. Given Colombia is the US’ closest ally in the region, the failure to deepen ties with the country would represent extreme negligence, and accelerate its diplomatic decline.

This is not a time for the US to rest on its laurels.

The economic necessity

The FTA will increase US exports by over 1 billion dollars. It will create thousands of new jobs, and help stimulate an economy in the doldrums.

Colombian is one of Latin America’s fasting growing import markets. In 2010 imports rose to 41 billion dollars.  But the US is not taking advantage of this. In fact the US’s share of this market is retreating, and fast. In 1999, US products represented 37 per cent of the total imports to Colombia. But by 2010 this had fallen to 26 per cent.

This while China’s imports have risen six fold over the last ten years – and 47 per cent in the last year alone. China is now Colombia’s second largest trade partner; it is threatening in the coming years to overtake the US.

Colombia’s economic star is rising. As reported on this website last month, the World Bank and the IMF have both given the country glowing reports, while the credit rating agencies have awarded it investment grade status.While economies across the world struggle, Colombia’s GDP will increase by over 5 per cent this year.

So it’s little surprise that the competition to invest in the country is heating up – free trade agreements with the EU and with South Korea should be in force next year, while the agreement with Canada is already active.

The US economy is retreating. Sitting back and watching others benefit from privileged access to the emerging markets on her doorstep is a luxury Washington cannot afford. The US will act today out of necessity.

The political necessity 

Latin America has endured a history of instability. Democracy is has not been ubiquitous, dictatorships and military leaders have been as visible as elected presidents. Colombia is a stable democracy, representing the values the US wishes to project. She must be supported.

Two of Colombia’s neighbours, Venezuela and Ecuador represent an anti-American socialism that seeks to replace the free-market and individual liberalism of the Washington consensus with a distorted idea of state-control Bolivarianism.

Should the US’ – and other Western democracies’ – influence continue to decline, the authoritarian regimes of Chavez and Correa, emboldened, will see their potency to tip the balance of power in the region in favour of the Bolivarian revolutionist movement increase. Chavez has cultivated friendships with Iran, China and Russia – Latin American democrats will not forgive the US for allowing Chavez’s attempts to replay the Cold War to bear further fruit.

Colombia – alongside Chile and Peru – are the standard bearers for a more liberal politics in South America (the election of Humala earlier this year in Peru has put the future of that country in doubt, however). Promoting the principles of free-trade through active agreements reinforces the liberal democratic counterweight to threat of a potential Caracas consensus.

FTA – an unavoidable decision

The FTA to be signed today is part of Colombia’s emergence as an important world economy. It will create new jobs and business opportunities as well as increase the spending power of the average family.

But the reality is Colombia is no longer reliant on the US. While the US has been inexplicably coy – taking years to consummate the trade marriage to one of her closest allies – Colombian President Santos has been busy forming other economic alliances. He has successfully positioned the country as an attractive investment opportunity for Europeans and Asians alike.

Despite concerns about the protection of union workers in Colombia, despite protectionist views in the US Democrat party, and despite the fear in Colombia that certain parts of the economy are not ready to trade on an level playing field with the US, the FTA is ultimately an opportunity the US can not afford to allow pass by – economically and politically.

Category: Economy, US Relations
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Obama shows Colombia some leg

The holy trinity? Photo, President´s Office

Was tonight the night Obama answered Colombia’s call?

As predicted on this website on Tuesday, President Obama placed the US-Colombia Free Trade Agreement at the heart of his jobs plan, delivered this evening to Congress. Obama demanded that Congress approve the measures therein – immediately.

Obama has shown Colombia some serious leg. Congress must now, finally, consummate the marriage.

How was the plan received?

Unsurprisingly given where we are in the electoral cycle, critics began to circle almost as soon as Obama stepped down from the podium. As I write, they are taking to the airwaves to tear his plan apart.

What’s the problem? Well, simply put, Republicans view the plan as yet further proof that Obama is a spend spend spend President. Obama’s jobs package is estimated to cost the US 450 million dollars to implement. Where will this money come from? Well, Republicans like this answer even less as the plan is to be financed in part through tax rises on the wealthy.

The good news for Colombia is that just about the only thing the Republicans and the President do agree on is the need to push through the FTAs. Colombia must hope that the FTA now be sworn in as an early win (for both sides).

Category: Economy, US Relations
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Colombia – Time for American TLC?

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

 

Category: Comment, US Relations