President Submits U.S.-Colombia FTA to Congress Under TPA

April 8, 2008

Yesterday, President Bush signed a letter to send Congress legislation that implements the US-Colombia Free Trade Agreement (FTA).  This FTA was concluded and signed in February 2006 and negotiations were initiated in May 2004.  The time taken to conclude this agreement and bring the implementing language to Congress underscores the divisive nature of the agreement.  As the agreement was signed under Trade Promotion Authority, Congress now has 90 days to approve or reject it.

The pact itself is humble – Colombia already gets free access for most of its goods into the United States under the Andean Trade Preference Act, and US exporters are on board with the administration’s efforts to open this sizable market for their goods and services.  However, Democrats and the Union lobby in the United States is strongly opposed to the pact due to their concerns about human-rights abuses in Colombia.  Democrats contend that Colombia does not provide enough protection to labor activists and does not act to demobilize paramilitary organizations.  The administration rejects this assertion and believes that Colombia has been making steady advances to eliminate violence against union workers and considers Colombia an important ally in a region where Venezuela’s Chavez is gaining popularity. 

In the last few weeks, the Bush Administration has taken Congressional members on multiple trips to Colombia.  These trips have aimed to highlight the progress Colombia has made on the human rights front and to urge the members to support a vital ally that fights America’s war on drugs.   This “leveling of the playing field” pact, as Susan Schwab, the United States Trade Representative calls it, may be the ultimate test of bipartisan consensus on the importance of trade for the US economy.  Last year, the Administration signed a trade pact with Congress to include environmental and labor provisions in trade deals, and this led to pro-trade momentum on Capitol Hill which culminated in the approval of the US-Peru FTA and the extension of temporary preference programs such as GSP and ATPA.  On June 28, 2007, the United States and Colombia signed a Protocol of Amendment revising the trade agreement to reflect this bipartisan consensus on trade. 

Colombia, a country of 44 million, has a total output of about $160 billion.  If the agreement passes Congress and is signed into law by the President, 80% of US exports of industrial and consumer good would enter Colombia duty free instantly. Currently Colombia maintains tariffs on many products on those categories that are as high as 35%.  An additional 7% will become duty free within five years.  All remaining tariffs will be eliminated within ten years.  Many products important to the US export industry such as agriculture and construction equipment, aircraft and parts, auto parts, fertilizers and agro-chemicals, information technology equipment, medical and scientific equipment and wood will gain immediate duty free access to Colombia.  Under this FTA, Colombia will join the WTO’s Information Technology Agreement, which removes tariff and non-tariff barriers to information technology products. 

Last week, both House Speaker Nancy Pelosi (D-CA), and Senate Finance Committee Chairman Max Baucus (D-MT) separately warned the White House against sending the implementing bill to Congress.  Baucus’ views on the trade agreement has been widely reported – he would like to move forward only after a new and expanded Trade Adjustment Assistance (TAA) plan is in place.  With the slowdown in the economy, a democratic majority in the House and election year campaigning, the US-Colombia FTA faces an uncertain future on Capitol Hill.