| Colombia Deserves a Vote!
Canada-Colombia Trade Deal is Good News for Workers... in Canada
While Congress hasn't scheduled a vote on the U.S.-Colombia Trade Promotion Agreement, countries around the world are eyeing the opportunity to secure a competitive advantage in the booming Colombian market.
On June 7, the Canadian government concluded negotiations with Colombia for a package of free trade, labor and environment agreements, thus seizing a potential advantage for Canadian workers over their U.S. counterparts. According to news reports, Russia and the European Union are not far behind in negotiations with Bogota.
What are the stakes in the trade chess game? If Canada embraces free trade with Colombia but the United States doesn't, American workers could find themselves at a disadvantage:
- A U.S.-made motor grader faces a 10% tariff in Colombia today. If a Canadian-made equivalent faces no duties, it will enjoy a significant advantage. Since heavy equipment of this kind usually costs hundreds of thousands of dollars, even a 1% tariff can make a difference.
- Last year, the United States sold more than $500 million worth of corn to Colombia despite a 57% tariff. If the Canada-Colombia trade agreement gives corn farmers in Ontario duty-free access to the Colombian market, corn farmers in Iowa may find their crop priced out of the market.
- The Canada-Colombia trade agreement will provide ''enhanced market access for Canadian service providers in areas such as financial, professional (engineering), environmental, mining, oil and gas, and construction services,'' according to the Canadian government. The U.S.-Colombia agreement would provide similar benefits for U.S. service providers, but not if Congress fails to approve it.
More generally, U.S. manufactured goods exports to Colombia grew by 25% in 2007 and have grown by 134% over the past five years, according to the National Association of Manufacturers. With the Canada-Colombia trade agreement in place, the NAM expects U.S. exports of manufactures will stop growing, while Canada will be able to export their similar manufacturing products to Colombia without facing today's 14% tariff on machinery and equipment.
U.S. business offers no criticism of the Canada-Colombia trade agreement - in fact, we respect Canada's legitimate pursuit of its commercial interests. But while the rest of the world is racing to do business in the Colombian market, American workers, farmers, ranchers, and small and medium-sized businesses could be saddled with a sharp competitive disadvantage - unless Congress reverses course swiftly.
Colombia Deserves a Vote!
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|  | |  | | Did you know?
| | | Colombia's unemployment rate has fallen from 20% in the late 1990s to single digits
in recent months. Three million jobs have been created since 2002, when the U.S.
Congress further opened the U.S. market to Colombian exports through the Andean Trade
Promotion and Drug Eradication Act - underscoring the power of trade as an effective
alternative development program.
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| | | | Overheard
| | | ''Time is of the essence if we hope to retain a strong and economically vibrant textile and apparel industry in this country by ensuring a strong trade relationship with our partners in Colombia.''
From a letter sent to Congress on the behalf of textile and apparel associations.
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