November 24, 2009

November 24, 2009 | Commentary on Free Trade Agreements

U.S.-Colombia FTA: American Workers Wait as Congress Dithers

In October, the unemployment rate in the United States reached 10.2 percent, the highest in a generation. Yet even with millions of Americans scrambling for a job, Congress refuses to take a simple step that could put many back to work: approving a Free Trade Agreement with Colombia.

Lawmakers have been dragging their feet on this FTA since it was signed in late 2006. In that time, thousands of U.S. workers may have lost their jobs in export industries. Instead of the "jobs saved or created" President Obama boasts about when he discusses his so-called stimulus plan, these are just the opposite -- jobs lost or destroyed. And many of them could have been saved if Congress had just approved the FTA.

What's the holdup? Unfortunately, congressional leaders are taking their orders on the FTA from protectionist U.S. labor unions and U.S. anti-globalization groups. They're joined internationally by far-left allies in the region, such as Venezuela>, Bolivia and Nicaragua.

The cost of delay is real. So far, according to the Latin America Trade Coalition's "Colombia Tariff Ticker," U.S. companies have paid $2.3 billion in unnecessary duties to the Colombian treasury in the 1,086 days since the FTA was signed.

That $2.3 billion has translated into higher prices in Colombia for U.S. goods and services, putting them at a competitive disadvantage there. It also means reduced profits for U.S. companies and lost jobs at home. What's especially galling is that Congress has already given Colombia duty-free access to the U.S. market through the Andean Trade Preference Act, so its failure to approve the Colombia FTA hurts only U.S. workers.

Union leaders in the U.S. claim they oppose the FTA on humanitarian grounds. They say there's a history of violence against leaders of Colombian trade unions, and allege the Colombian government has tolerated or even sanctioned that violence, which should forever disqualify Colombia from enjoying an FTA with the United States.

However, these opponents conspicuously ignore the historical context of the violence (both within Colombia and in the region) as well as the considerable progress the Colombian government has made in reducing it.

The Colombia FTA is much more than just a simple trade agreement. It would help the United States complete a contiguous free-trade zone along the Pacific Rim from Canada to Chile and would further stabilize many Latin nations from Mexico through Central America and into the Andes. These countries are struggling against both extreme poverty and the malignant effects of narco-terror on their societies.

Importantly, the FTA would also seal a deeper partnership between two nations that are long-time friends and great defenders of market-based democracy. The FTA would fortify a bulwark against the rising tide of Chávism that nearly surrounds Columbia and is threatening to undermine U.S. hemispheric interests in Honduras, Ecuador>, and elsewhere.

Trade liberalization has opened markets worldwide to U.S. goods and services. It also has created a level of competition that leads to innovation, better and less expensive products, higher-paying jobs for Americans, and the investment needed for long-term economic recovery, growth and continued prosperity.

The best way to ensure that America continues to reap the benefits of international commerce is for our government to recommit to advancing trade liberalization. That goal that would be aided by passing and implementing pending trade agreements with Colombia, Panama and South Korea.

Delay in approving the FTA could force a reluctant Colombia closer to Venezuela>, which is already Colombia's second-largest export market after the U.S. Meanwhile, President Hugo Chávez dangles petroleum carrots that the Colombians cannot ignore indefinitely. Colombia will also continue to seek trade agreements with many other countries (e.g., Canada and Mexico) and trading blocs, such as the EU, the European Free Trade Association (EFTA), and MERCOSUR (Southern Common Market). This would further isolate the U.S. and hurt the competitiveness of U.S. industries.

A failed FTA will eventually convince Colombia and other Latin American countries the U.S. isn't a reliable partner. It could also fuel a return to narco-trafficking and other illicit activity by the urban and rural poor, who aren't benefiting from the many jobs that would be created by the legitimate alternative economic development that will flow from the Colombia FTA.

Congress should quickly approve the pending trade agreement with Colombia -- and start tallying jobs that have been truly "saved or created."

James M. Roberts is Research Fellow for Economic Freedom and Growth in the Center for International Trade and Economics (CITE) at The Heritage Foundation.

About the Author

James M. Roberts Research Fellow For Economic Freedom and Growth
Center for Trade and Economics (CTE)

First Appeared in Human Events