Colombia Free Trade Agreement (FTA)

1. Adam Boltik, Melissa Brown, Peter Cassell Colombia Free Trade Agreement (FTA)

2. COLOMBIA FTA OVERVIEW • The United States-Colombia Trade Promotion Agreement • Signed November 22, 2006 • Approved by Colombia’s Congress in 2007 • Colombia’s Constitutional Court reviewed and accepted in July 2008 • U.S. Trade Representative tasked with resolving outstanding issues

3. COLOMBIA FTA OVERVIEW • Colombia will immediately eliminate most tariffs on U.S. exports • Remaining tariffs will be phased out • Better access to Colombia’s services sector than other WTO members • All service sectors are covered except where specific exceptions are outlined

4. COLOMBIA FTA OVERVIEW • Other areas: • Customs administration • Trade facilitation • Technical barriers to trade • Government procurement • Investment • Telecommunications • E-commerce • IPRs • Labor protection • Environmental protection

5. COLOMBIA FTA LEGISLATION • Legislative history: • Formed from failed multilateral negotiations between the US, Colombia, Peru and Ecuador • Began talks with Colombia in 2004 • Not enacted yet

6. COLOMBIA FTA LEGISLATION • Key parties involved: • Colombia • Colombia Agriculture sector • Colombia Big Business • United States • The Obama Administration • U.S. Congress • U.S. Agriculture sector • U.S. Business sector – mainly, Big Business

7. COLOMBIA FTA LEGISLATION • Obama Administration • U.S. Big Business • U.S. Agriculture • Colombia Big Business • Congressional Democrats • U.S. Medium and Small Business • Colombia Medium and Small Business • U.S. Labor Unions • Colombia Agriculture

8. COLOMBIA FTA LEGISLATION

9. COLOMBIA FTA LEGISLATION • Key provisions: • Increased market access for U.S. consumer and industrial products • Expanded market access for U.S. farmers and ranchers • Market access for textiles and apparel • Opened services market • Opened telecommunications market • New protections for U.S. investors

10. COLOMBIA FTA MAJOR ISSUES • Purpose of the Colombia FTA • Opening up new markets • Two way trade at $18 billion (2007) • Level the playing field • We see up to 80% tariffs on goods • Strengthen peace and democracy • US aid helps keep paramilitary down • Promoting economic growth • Rule of law, transparency, fight corruption • Anchoring ties with a vital ally • Ties with the US keep Colombia secure

11. COLOMBIA FTA MAJOR ISSUES • Numbers You Need To Know: Support To the Colombia FTA • 502 days as of April 7, 2008 since passage • 0 Congressional Hearings on Colombia FTA • 28th Largest Exporter to the US • 31st in Imports to the US, US is largest export partner • 90% of goods from the Andes receive duty free access to the US Market

12. COLOMBIA FTA MAJOR ISSUES

13. COLOMBIA FTA MAJOR ISSUES • Time Line of Major Issues: • May 10, 2007 – Bipartisan deal on labor and environment additions • June 27, 2007 – ATPA Renewed (365 yes) • June 28, 2007 – Agreement Revised • July 22, 2007 – Dems issue statement on violence in Colombia • October 30, 2007 – Colombia Ratifies • February 2008 – ATPA Renewed • April 2007 – April 2008 – 400 Members Contacted for CODELS • April 7, 2008 – Colombia FTA Introduced under TPA • April 10, 2008 – House removes Colombia from TPA (224-195)

14. COLOMBIA FTA MAJOR ISSUES • Bush Administration Stance: • 95% of consumers live outside the US • 42.6% of US Exports to FTA Countries (2006) • Strong Free Trade Proponent • Obama Stance (current) • Critical during election • Asked USTR to Review

15. COLOMBIA FTA MAJOR ISSUES • Democratic Response: • Congressional Dems opposed legislation • Original problem with environment/labor • Reminder – reached bipartisan agreement and edited FTA in October 2007 • Backlash Came from AFL-CIO Visit • Unionists/labor protections were not sufficient • Bad for trade deficit and will cause jobs • Reminder – Colombia exports duty free into US since 1991 • AFL-CIO encouraged that there was no support in Colombia • Gallup Poll – 56% of Colombians supported agreement

16. COLOMBIA FTA MAJOR ISSUES

17. COLOMBIA FTA MAJOR ISSUES • Number One Problem: Political Climate • “they don’t have the votes for it, it’s not going to come on the floor,” adding that “what they [the White House] don’t understand it’s not the facts on the ground, it’s the politics that’s in the air.” (Charlie Rangel to Congress Daily) • Congress was given 90 days exactly before recess to vote on the agreement • Used issues like unionist deaths as excuse • Democrats campaigning for office • Both Clinton and Obama compared it to NAFTA

18. COLOMBIA FTA MAJOR ISSUES • Colombian Reaction: • Colombians were outraged • Ambassador spoke out in DC • Colombian Speaker wrote to Speaker Pelosi • “Fatal Blow to the Economy” • El Mundo and El Tiempo published 15 editorials the day after the house vote • El Tiempo calls Pelosi “Dr. No”

19. COLOMBIA FTA: What’s Next? • Pass Legislation to implement U.S.-Colombia Trade Promotion Agreement. Source: New York Times.

20. COLOMBIA FTA: U.S. Impact • U.S. International Trade Commission estimates a 10% boost in exports to Colombia. • Would create a “fairer” playing field for U.S. and Colombian goods by creating a “two-way” duty free street.

21. COLOMBIA FTA: U.S. Impact • FTA has potential to reverse trade deficit with Colombia (deficit since 1999).

22. COLOMBIA FTA: U.S. Impact

23. COLOMBIA FTA: U.S. Impact • 80% of tariffs reduced to zero immediately. • Given U.S. exports in 2006, U.S. exporters lose nearly $2 million per day in duties.

24. COLOMBIA: Int’l Impacts • Little evidence of lasting international implications given other FTAs of similar scope. • Possibility of trade diversion in favor of the United States (since duties on U.S. goods will be reduced relative to other Colombia trade partners).

25. Sources “Baucus Warns White House of Sending Colombia Deal.” Congress Daily. 7 March 2008 <http://www.nationaljournal.com/congressdaily/am_20080307_1.php?related=true&story1=null&story2=null&story3=null> (20 Nov 2009). “Center for International Policy: Colombia Program.” 1 June 2007. < http://www.ciponline.org/colombia/aidtable.htm> (20 Nov 2009). Gutierrez, Carlos. “U.S. National Export Strategy.” Washington; Dept. of Commerce, 2007. “Colombian Speaker Criticizes Pelosi.” The Hill’s Blog. 17 April 2008 <http://briefingroom.thehill.com/2008/04/17/colombian-speaker-criticizes-pelosis-colonial-treatment-of-colombia/> (20 Nov 2009). Pelosi, Nancy. Speech to LA Chamber of Commerce. 16 April 2008. “Trade Agreements.gov.” <www.tradeagreements.gov> (20 Nov 2009). “US Democrats Vote To Indefinitely Suspend TPA.” ITCSD Weekly Trade Digest. 11April 2008 <http://www.ictsd.org/weekly/08-04-11/story2.htm> (20 Nov 2009). United States Trade Representative. “Colombia FTA Briefing Materials 2008.” Washington; USTR, 2008. “US-Colombia FTA.” AFL-CIO <http://www.aflcio.org/issues/jobseconomy/globaleconomy/colombiafta.cfm> (20 Nov 2009). “US-Colombia FTA.” Americas Society <<http://as.americas-society.org/article.php?id=978>> (20 Nov 2009). United States Trade Representative. “How Trade Promotion Authority Works.” Washington; USTR, 2008. United States Trade Representative. “Numbers You Need To Know.” Washington; USTR, 2008. United States Census Bureau, Foreign Trade Statistics. http://www.census.gov/foreign-trade/data/index.html (22 November 2009) United States Department of Commerce, International Trade Administration. “US-Colombia Trade Promotion Agreement” http://export.gov/FTA/colombia/eg_main_017621.asp (24 November 2009)