Colombia’s FTA : What is really at Stake?
When I started to write this week’s blog on Monday’s afternoon, I was very optimistic to see Congress finally voting an agreement that has been pending since 2006 and that should pass on its merits because of the economic and national security benefits for both Colombia and the U.S.The significance of this agreement goes beyond the traditional benefits of free trade. This is also an agreement to back the closest U.S. ally in the hemisphere and a statement of support for democracy in the region.After being very close to collapse ten years ago, something that as a Colombian/American I had an opportunity to witness first hand, Colombia has transformed to an increasingly prosperous and peaceful democracy. The FTA will help Colombia to continue its path to peace and prosperity, by strengthening its economy, while at the same time -according to the U.S. International Trade Commission- will allow U.S. to increase its exports to Colombia by 1.1 billion, benefiting 9,000 American businesses of which 8,000 are small businesses.Unfortunately, my optimism from earlier this week did not last long. On Thursday, it was clear that the vote would not move forward, leaving the agreement indefinitely postponed.What is at stake?The consequences of the recent developments go well beyond the Colombia FTA. The U.S. credibility in negotiating and implementing trade agreements and the competitiveness of the U.S. industry are at risk.Colombia, as well as many countries in the world are opening markets to reap the benefits of international trade. These countries will sign trade agreements with major Asian countries that have industries that compete directly with U.S. industry in every single line of the economy. -As other countries’ FTAs move forward, U.S. industry will be at disadvantage. Foreign companies would have significant price advantages because of the lower tariff and non-tariff barriers they would enjoy. Furthermore, the increased employment that could have been created in the U.S. as a result of trade would not be realized.There is no doubt that among certain groups trade is a complex and sensitive issue, in particular in an election year. However, the stakes are too high to let short-term policy interests interfere with the future of our economy and the hemisphere.