Canada’s New Trade Agreement With Colombia Turns Up the Heat on the U.S.

On June 14, Canada’s House of Commons approved a free trade agreement with Colombia. Questions should now be flying around Washington, coming from US exporters, why is the US Congress still sitting on its hands? This article is a passionate argument that times have changed in Colombia, policies must keep up, that human rights activists must be heard and engaged seriously, and that trade normalization is vital for improvements in Colombia and to keep the US from losing significant exports to and influence in Colombia.

1.

This Canada agreement is, no doubt about it, a personal triumph for Trade Minister Luis Guillermo Plata and his Canadian counterparts, and therefore an example to follow.  The Canada agreement is the result of Minister Plata’s tireless personal diplomacy, in particular, and his ProExport team’s business-like trade promotion efforts, in general. Minister Plata’s personal efforts included directly engaging with the Liberal Party’s parliamentary leadership, in the person of Liberal MP Scott Brison. Plata and Brison rolled up their sleeves to tackle Canada’s human rights and export concerns. They worked hard and, famously, were out late one night in Bogotá, dancing with Plata’s wife and Brison’s partner, cementing their countries’ relationship in a symbolic way. Rather than retreat to opposite corners and mouth platitudes, they engaged in active dialogue and negotiation. As a result, they reached both their respective countries’ interests.

2.

They also reached a deeper truth that lies near the core of current arguments on the US-Colombia Trade Promotion Agreement. Plata and Brison’s work builds directly upon the fact that the situation in Colombia is improving, not worsening as some demagogues still repeat.  The practical answer to Colombia’s violent past is to take action to produce real economic improvements:

For his part, Minister Plata acknowledged that Colombia comes “from a very, very violent past.”

He said, however, his country has made progress over the past few years, noting that its homicide rate is now below that of Mexico City, Rio de Janeiro and even Washington.

And he defended his government’s actions in trying to protect union members and to prosecute those who harm them.

“Violence stems obviously from lack of opportunity and poverty,” Mr. Plata said. “So the way we see these trade agreements is that we are not asking Canada for aid or help. We are asking for opportunities for business and trade.

“And we believe the more trade we have … that’s the way we create more jobs … and that’s the way to really fight the violence.”

That is right. To improve human rights, improve living conditions. If you don’t improve living conditions and the economy, you don’t reduce the power of kidnapping and murderous Marxists and paramilitaries and other narco-traffickers. But, if you do improve the economy and living conditions, you also improve human rights by increasing basic living standards and bringing more of the desperately poor into the formal economy.  Withholding the trade agreement is therefore the surest way to hold back improvements in human rights. No one argues the need to reduce extra-legal behavior, but how can it be rational to think it will be reduced by keeping Colombia out of the mainstream of development?

3.

One major human rights leader recently confided to me that, for these very reasons, he would like to be able to support the US-Colombia Trade Promotion Agreement — better jobs, more formal economy employment, a higher living standard.  All contribute to building a society that rejects criminal impunity and supports a robust and constructive business and organized labor environment.

The imminent election of a new Colombian President gives US Congressional leaders, human rights organizations, and labor leaders a chance to “press the re-set button” on the US-Colombia relationship. They should swiftly re-examine their opposition to the US-Colombia Trade Promotion Agreement.  Their opposition is based on stale evidence and arguments. The real effect of their policy is to hurt, not help, improvement for real Colombians rising out of decades of deep poverty and intractable violence. 

As the same human rights leader also told me, opposition to the Trade Promotion Agreement was based upon the principle of leverage — withholding approval to coerce reductions in human rights violations. Leverage is all we have, he told me, referring to rights organizations. They should have leverage but it must be exercised in a constructive fashion.

It must be acknowledged by al that the work of reporting and condemning atrocities by the army, the intelligence services, the paramilitary, and the guerillas, is vital and must be strengthened. Human rights leaders must not be opposed, not even merely tolerated, but welcomed in Bogotá as in Washington. Their information must be taken seriously.  All serious reports converge on one central fact: that the human rights violations in Colombia are directly related to the war with the FARC, the paramilitary, and the drugs traffickers. Human rights organizations provide much-needed ammunition in the war on these lawless criminals.

Information about human rights violations not only exposes the miscreants, it spurs on Colombia’s people, who are overwhelmingly dedicated to ending the atrocities of the expiring internal struggle and global-level narco-wars.  Why? They are sick of it, sick of the bloodshed, sick of the kidnapping, sick of the extortion, the lack of freedom of movement and the dim future for their children. They are sick of it, and that is why they went on the offensive against the FARC, demanded that the paramilitaries demobilize, and increasingly will not tolerate impunity for atrocities. To keep it up, they have earned our loyalty by being our most loyal hemispheric ally and by putting our resources to effective use. The US should now focus on capitalizing on the success, and improve economic conditions.

The answers do not lie in weakening the human rights advocates, but strengthening them, and that will not happen if they are discredited for clinging to the ill-informed and counter-productive policy of opposing trade normalization.

4.

Clearly well-intentioned, some who advocate the “leverage” approach are nevertheless ill-informed. Their logic is that the rate of union leader killings (though falling rapidly) remains the highest in the world, so “let’s hold back the ‘carrot’ of normalized trade relations, and, since access to the US market is so vital, it will stimulate good behavior.”  Some advocates don’t understand that Colombia already has basically free access to the US market (and that Colombia is replacing US exports). The policy of “holding back” holds almost nothing back.

The law that is current US trade policy with Colombia is called ATPDEA (Andean Trade Preference and Drug Eradication Act). Congress, however, annually has to renew the law, and annually, at the last, humiliating moment for Colombia, Congress does it.  So we have this Lucy-and-Charlie-Brown-with-the-football exercise, but every year, Colombia gets the US market access some think is being held back. 

America’s exporters, though, get nothing.

 5.

US exporters are directly threatened by the Canada-Colombia agreement (and there is a European Union-Colombia agreement imminent). ATPDEA is bad for US interests in terms of change in Colombia, as I argued above, but also for the US exporters and their workers, especially agribusiness.

Colombia is the regional hub for Central and northern Latin America business strategy because of its natural resources, developing economy and population, strong pro-business policies, skilled work force, and central/bi-coastal location. Where will Colombia-based manufacturers of consumer foods, which are re-exported all over the region, buy their corn, wheat, sophisticated machines, packaging, etc.?  Colombia’s petrochemical business is flourishing while Venezuela’s languishes. Where will Colombia-based hydrocarbon firms acquire their oilfield services and equipment?  Where will Colombia-based manufacturers of industrial equipment buy their tractors and specialty vehicles?  Where will the modern agribusiness developing in the vast Eastern plains (or llanos) source their knowledge and equipment? Which investors will reap the profits of underwriting these successes?

Canada’s trade agreement puts U.S. exporters, their workers, and investors at a decided disadvantage. The U.S. policy of withholding the trade agreement is an own-goal, a self-inflicted wound.

The U.S. Chamber of Commerce’s Chamberpost blog got it right: “Too late!” it said. “Canadians eat our lunch in Colombia.”  The U.S. has frittered away a multi-year advantage in trade negotiations, during which the U.S. would have had an average 12.5% advantage on Canada. Now the U.S. faces the same 12.5% disadvantage. Take for example wheat:

U.S. manufacturing and agricultural industries pay the price. Take wheat, for example. U.S. Wheat Associates, an industry association representing U.S. growers, has said, “Colombia is traditionally the largest market for U.S. wheat in South America with market share of up to 70 percent. However, U.S. wheat market share could easily drop to 30 percent or lower if Canada and the European Union implement their own agreements with the Colombian government allowing their wheat to enter Colombia duty-free. About $100 million in annual sales are at stake.”

As the press has already been reporting, the U.S. is the clear loser as a result of the Canada-Colombia arrangement.

6.

America’s new foreign policy wisely calls for people-to-people, whole-of-government, public-private partnership, and export-doubling policies and programs.  That is not a symbolic policy. That call must take an active, productive form.  There are literally dozens of wonderful people in the U.S. Embassy in Bogotá working on trade with the U.S., ready, willing and able to help. U.S. institutions could learn a lot by mirroring the business-like attitude of engagement and competitiveness shown not only by Colombia’s ProExport and Minister Plata but Canada’s Liberal MPs too.

They got off the dime, secured an improved trade deal, and gave their country a competitive advantage for its exports. Secretary Clinton’s much-heralded night out with former President Bill Clinton in a Bogotá steakhouse last week produced a wave of news recognizing how much Colombia has changed. Hopefully, it will also lead to the kind of real progress that MP Brison’s and Minister Plata’s night out in Bogotá did.

There is a broad coalition of Senators and Representatives of both parties who want the US-Colombia Trade Promotion Agreement.  They want it because it will increase US exports and maintain the US’s historical leadership in the gateway Colombian market. It will also lock in the gains produced by the US investment in Colombia’s security.  Many members of Congress — 25% in the Senate and 33% in the House — have yet to take a position, and can be expected overwhelmingly to support Colombia’s transformation and to back US exporters. 

In bipartisan solidarity, this coalition should deliver on the US-Colombia Trade Promotion Agreement now.