Losing out in Latin America
At last, the Obama administration has cut a deal with South Korea, paving the way for congressional approval of a long-stalled free-trade agreement with that crucial Asian ally. Now, what about Colombia and Panama? Alas, the administration's answer still appears to be "not yet." White House spokesman Robert Gibbs announced Friday that the president would not be submitting the Colombia or Panama free-trade deals to Congress anytime soon, ostensibly because they don't command majority support.
This is getting ridiculous. Both of these Latin American countries, longtime friends of the United States - in a region where it's not always easy to be America's friend - made tariff-slashing agreements with the Bush administration in late 2006. Thereafter, the deals languished because of objections from the Democratic Congress. In the case of Panama, the ostensible concerns were the presence of the alleged killer of an American soldier in Panama's national legislature and the lack of transparency in the country's banking and corporate-registry sectors. With a new government in power in Panama City since July 2009, those issues have been addressed. All that remains is to take advantage of new opportunities for U.S. exports in a small country with which the United States already enjoys a $4.5 billion annual trade surplus.
As for Colombia, free trade would also be lopsided in favor of the United States. Colombia already enjoys duty-free access to the U.S. market under existing laws benefiting Andean nations threatened by drug traffic. The trade agreement would give U.S. exporters similarly free access to Colombia's market. The argument against congressional approval has been Colombia's purported neglect of human rights, specifically for trade unionists. In truth, though the record is not perfect, there has been dramatic improvement across the board on human rights in Colombia over the past decade. Only 27 union members have been killed in Colombia this year - in contrast to 196 in 2002 - and it is not clear that they were killed for political reasons. Meanwhile, homicides in general have fallen from nearly 29,000 in 2002 to under 11,500 this year.
The Obama administration, however, has continued to drag its heels on Colombia and Panama free trade, in deference to U.S. labor unions - for whom the very phrase "free trade" seems to be anathema, regardless of the economic merits of any particular deal. Meanwhile, Colombia has approved free-trade agreements with the European Union and Canada, putting the United States at a competitive disadvantage - and raising the question of why the United States, but not these democratic powers, should scruple about trading with Colombia.
Indeed, Colombia is in danger of losing its usual preferences in the United States; they may lapse at the end of this year amid partisan wrangling in Congress over extraneous trade matters. Recent floods have killed 300 Colombians, left 2 million homeless and caused $5 billion in damage, adding a humanitarian argument to the already convincing economic and strategic case for stronger U.S.-Colombian ties. The Obama administration, supposedly intent on boosting exports and the domestic jobs they create, must stop equivocating and add Panama and Colombia to its free-trade priorities in the new Congress.