Foreign trading partners who have had to endure the American view that a free-trade agreement with the United States is worth waiting for have a message for the US: Your glacially slow pace of ratifying FTAs is costing you exports, and jobs.
The latest warnings from a would-be free-trade partner come from Colombia. Its free-trade agreement with the US has languished since 2006, awaiting congressional approval.
Armed with a raft of trade statistics, Colombia’s trade and tourism minister, Luis Plata, is in Washington to broadcast a three-pronged warning:
- US exports to Colombia are falling.
- Neighbors in the hemisphere – from Canada to Brazil and Argentina – are happily taking up the slack.
- Once market share is lost, experience shows, it becomes difficult to regain.
“The landscape is changing, with displacement of the US from our markets by new trade partners who are coming in,” said Plata, who met with reporters at Washington’s National Foreign Trade Council,Wednesday. “We’re taking that message to the Obama administration and the Congress.”
As recently as Monday, President Obama repeated his desire to see the accords take effect, having earlier linked them to his plan for doubling US exports in five years. But efforts to get congressional approval have stalled. One reason is the economic recession’s unfavorable climate.
But specific objections have been raised n the case of each FTA. Some Democrats question Colombia’s human-rights record, while auto sales have been a sticking point with South Korea.
In the case of Colombia, the losers are primarily American farmers.
A case in point: yellow corn. In 2008 the US held 80 percent of the Colombian market – more than 100 million bushels. But last year, under Colombia’s trade agreement with Brazil and Argentina, tariffs on yellow corn from those countries fell to zero (compared to a 15 percent tariff on US corn). The US share of Colombia’s market plummeted by more than half.
The story is similar for US wheat and soybeans.
Colombia’s imports from Canada are also growing, Plata says, as Colombians prepare for a free-trade agreement moving through the Canadian government.
“When we started negotiations with Canada, the FTA with the US had already been signed,” says Plata. “But unless something happens here in the next few months, it’s more likely the FTA with Canada will enter into force before the FTA with the US.”
That scenario, multiplied across the globe, could spell more trouble for US exporters. In addition to Canada, the European Union is also pursuing a number of new FTAs, including with South American countries.
Trade experts note that in the 1990s, Chile ended up entering into an FTA with Canada before one with the US was approved by Congress. The US lost market share to Canada in the interim period, and its producers found it difficult to win markets back after the US-Chile FTA finally took effect.
Despite his focus on what the US has to lose, Plata is also mindful of the lingering objections to Colombia’s FTA over its human-rights record. Much of that congressional resistance centers on decades of violence against Colombia’s labor unions and union organizers.
But there, too, Plata comes bearing statistics. In the eight years of President Alvaro Uribe’s presidency, he says, killings of union members fell dramatically: from 196 in 2002, to 28 in 2009. And convictions in those murder cases have risen from just two in the decade preceding Mr. Uribe’s tenure, to 234 under Uribe.
That fall in violence has translated into a near doubling in union membership, Plata says – to 1.5 million last year, up from 850,000 in 2002 .