| Preferences Are Not Preferable
The Trade Promotion Agreements with Peru, Colombia and Panama
are far superior to existing tariff preferences
Large bipartisan majorities in Congress have voted repeatedly in recent decades to give Peru, Colombia, Panama and some of their neighbors improved access to the U.S. marketplace through temporary cuts in U.S. tariffs. These preference programs have been successful by many measures, but their benefits pale beside those anticipated under the bilateral Trade Promotion Agreements (TPAs) the United States has negotiated with these three countries:
Preferences do nothing for U.S. farmers and ranchers, and they provide no new market access for U.S. manufacturers. The TPAs will boost exports and create jobs in both these sectors:
- U.S. farm goods entering Peru, Colombia, and Panama face applied tariffs as high as 50%. U.S. manufactured goods face average applied tariffs of 11-12% in Peru and Colombia and 7% in Panama.
- The preferences leave these foreign tariffs intact, but the TPAs will eliminate most of them immediately.
- Upon full implementation, the TPAs will increase farm exports by $1.4 billion per year according to the American Farm Bureau Federation.
- Within five years, the TPAs will boost U.S. exports of manufactured goods by $4.4 billion per year according to the U.S. Chamber of Commerce.
Preferences do nothing for U.S. service providers, but the TPAs will open markets and provide a fair and transparent regulatory environment for services, investment, and intellectual property:
- Unlike the preferences, the TPAs offer legal protections for U.S. investments and recourse to impartial arbitration.
- They lock in transparency and accountability in business and government, for instance, by requiring fair and open bidding for government contracts.
- The TPAs' strong intellectual property and related provisions against trafficking in counterfeit or pirated products will help combat organized crime.
The governments in Peru, Colombia, and Panama insist that extension of the preferences is a poor substitute for the TPAs:
- In June 2006, Peru's Congress ratified the U.S.-Peru TPA by a 79 to 14 vote, showing broad support for the agreement.
- Legislators of diverse political parties in Colombia and Panama are likewise expressing support as they begin legislative procedures.
- The business and agriculture communities in the three countries and the United States are overwhelmingly in favor of moving to the more robust commercial relationship offered by the TPAs.
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|  | |  | | Did you know?
| | | Peru, Colombia, and Panama have ratified all eight ILO core conventions on worker rights. The preference programs only require that countries ''take steps to afford internationally-recognized worker rights.'' In contrast, the TPAs will require all three to enforce the ratified ILO core conventions.
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| | | | Overheard
| | | ''...the government of Colombia and the social partners have worked in close collaboration with the ILO to promote and defend the fundamental worker rights, specifically their physical integrity, freedom of association and collective bargaining...we are pleased to refer to the developments in Colombia as a case of progress.''
--Statement by the European Union and several other countries, March 20, 2007
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