Labor issues stymie Colombia FTA

By: | at 08:00 PM | Channel(s): International Trade  

Is progress on the horizon or will agreement remain in limbo?By Peter A. Buxbaum, AJOTIt has been well over four since the United States and Colombia signed a free trade agreement. Yet the accord is still not on the books, having been stalled in Congress.
The main stumbling block to the ratification of the FTA has been the record of Colombia’s government in ensuring labor rights and suppressing anti-trade unionist violence. This has led organized labor in the United States to oppose the agreement, and Democrats in Congress have followed that lead.
The Republicans, now in control of the House of Representatives, are pushing for immediate ratification of the Colombia FTA, along with other pending agreements with Panama and South Korea. But they accuse the White House of dragging its feet on free trade, by failing to push Congress towards ratification.
An administration official essentially confirmed that diagnosis on March 17 in testimony before the House Ways and Means subcommittee on trade. Deputy United States Trade Representative Miriam Sapiro, after extolling the many virtues of the agreement, added that “the President has made it clear that we will not adopt agreements for agreements’ sake. They must be enforceable, reflect high standards, and be in the clear interests of our workers, farmers, ranchers, and businesses.”
Sapiro went on to say that “there remain serious issues to be resolved before the agreement can be submitted for Congressional consideration.” All of these outstanding concerns revolve around labor rights and violence against labor leaders.
No one disputes Colombia’s importance in Western Hemisphere trade and politics. In 2010, the U.S. exported $12 billion of goods to Colombia, an increase of $2.6 billion, or 27.6 percent, from 2009. The country has a democratic form of government and has emerged as a leader among South American countries. The U.S. and Colombia formalized an alliance called the Defense Cooperation Agreement a year and half ago which gives the United States access to Colombian bases from which to carry out counter-drug surveillance flights over the Pacific. In recent years Colombia has signed free trade agreements with Canada and the European Union, providing Canadian and European exporters advantages denied to their U.S. counterparts.
Proponents of the FTA point to progress being made by the government of Colombia to protect labor rights. One aspect of Colombia’s labor laws that has been a source of concern is the provision that allows employers to hire workers through cooperatives with lower payroll contributions for social security, according to Mauricio Cárdenas, director of the Latin America Initiative at the Brookings Institution, a Washington think tank. “In response to some of these concerns, the Colombian Congress recently passed a law ensuring that employees hired through workers’ cooperatives comply will all labor protection clauses, including the right to form unions,” he said. “This piece of legislation corrects one of the primary reasons some Democrats had rejected the FTA in the past.”
Perhaps the best argument FTA boosters have advanced is that the agreement would simply level the playing field for U.S. exporters, since Colombia’s exporters already enjoy preferential treatment under U.S. law. Over 90 percent of Colombian exports enter duty-free into the U.S. under the Andean Trade Preference Act (ATPA) and the Generalized System of Preferences. Meanwhile, the current average tariff faced by U.S. exporters to Colombia is over nine percent.
“Americans saved more than $16 million on roses last year thanks to U.S. trade policy toward Colombia,” noted Bryan Riley, an analyst at the Heritage Foundation, a conservative Washington think tank. “Colombia is the biggest supplier of cut flowers to U.S. consumers, and the Andean Trade Preference Act exempts Colombian roses from the 6.8 percent U.S. tariff.”
The current ATPA also requires periodic reauthorization by Congress. “This introduces an element of political

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Peter Buxbaum has been writing about international trade and transportation, as well as security, defense, technology, and foreign policy, for over 20 years. Besides contributing to the AJOT, Buxbaum's work has appeared in such leading publications as [em]Fortune, Forbes, Chief Executive, Computerworld, and Jane's Defence Weekly[/em]. He was educated at Columbia University.