Colombian Trade Deal On The Ropes

Congressional wrangling over a potential bailout of the American automotive industry currently dominates the legislative agenda in Washington. Still, many analysts are eager to see how lawmakers will handle the proposed Free Trade Agreement (FTA) between the US and Colombia. The Bush administration has orchestrated trade deals with Colombia, South Korea, and Panama this year, but it seems likely that representatives will adjourn for the year without voting on these measures.

Back in April, President George Bush attempted to sidestep delays in the legislative process. The administration invoked the fast-track law, which prevents Congress from amending a trade deal, limits floor debate, and prevents a Senate filibuster. In effect, fast-track would have forced Congress to vote on the FTA within 90 legislative days. It proved a costly mistake, however, as House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid lined up against the bill and the President's brash political maneuverings.

The agreement would eliminate tariffs between Colombian and American markets, and encourage foreign direct investment in Colombia. Proponents of the trade deal argue that the agreement would provide much-needed economic stimulus for both countries, through expanded export possibilities. The most vocal critics are organized labor and human rights advocates. These officials are worried about widely reported violence against union workers in Colombia. According to media outlets, 26 union organizers were murdered in 2007, reinforcing skepticism about the country's human rights record.

Colombian President Alvaro Uribe recognizes that his economy desperately needs this agreement. In an effort to compete with China in supplying Western markets with low-cost labor, Mr Uribe needs to attract major firms to set up shop in Bogotá, Calli, and Medellin. Officials within the country are pointing to massive reductions in violence (albeit from frightening levels) and improved governance as signs of the country's commitment to a viable trade relationship.

In an April press conference, Secretary of State Condoleezza Rice claimed that "Colombia has not only come back from the brink of being a failed state, but it is increasingly one of the most successful states in Latin America." Indeed the administration has repeatedly stitched the FTA together with US concerns for economic and political stability in the region. It is no surprise that the administration is deepening ties in Colombia as countries like Venezuela and Bolivia ramp up their anti-Americanism. 

There is an important economic backdrop to this discussion. Colombian goods already receive duty-free access to US markets as part of a trade preference plan. As a result, the new agreement would only eliminate tariffs for American producers looking to meet demand in Colombia. Such realities seem to point to an obvious resolution: pass the FTA. Nevertheless, Washington is no simple town. Democrats are still smarting from Mr Bush's end-run, and are in no hurry to give the President his final wish.

It's all rather unfortunate. The global economy is in need of serious rehabilitation, but protectionist policies will only exacerbate the coming recession. President-elect Barack Obama was a lukewarm advocate for free trade on the campaign trail, but his tune may change in the White House. At least, one would certainly hope so.