A bilateral free trade agreement between Colombia and the United States came to life today with the Miami arrival of 4,200 boxes of fresh-cut Colombian roses, carnations, astromelias, and the delivery of a high-end Harley-Davidson in Bogota.
Six years after the agreement was first signed, both the flowers and the motorcycle entered the countries tariff-free under the bilateral pact, which is heralded by US and Colombian officials as the start of a new era in US-Colombian relations. It is expected to boost both countries' economies.
The "FTA will be a formula for growth," said Colombia's Trade Minister Sergio Diaz-Granados in a statement today.
But celebrations were dampened when a bomb exploded on a busy commercial street in downtown Bogota this afternoon. Though the bombing is believed to be unrelated to the free trade agreement, it is a reminder that Colombia remains a nation trapped in the middle of an internal conflict, home to some 20,000 leftist rebels, paramilitary fighters, and drug traffickers. In light of the explosion, President Juan Manuel Santos cancelled a planned trip to the Caribbean port city of Cartagena. He had planned to attend the official send-off of a container of clothing and textiles headed for the United States – a long-awaited, and symbolic event.
The long journey toward free trade
The free trade agreement (FTA) was signed in 2006 but was not brought to the US Congress for approval until last year, caught up in political wrangling between Democrats and Republicans in the US, and human rights groups in both countries. President Obama sent it to lawmakers in October 2011 and on Monday signed the decree that put the long-stalled trade agreement into effect.
American exports such as machinery, textiles, soybeans, beef, bacon, cotton, and nearly all fruits and vegetables can now enter Colombia duty-free. Most Colombian products such as oil, flowers, gold, coffee, and bananas, already enjoyed duty-free access to the US market under the Andean Trade Promotion and Drug Eradication Act (ATPDEA). The new trade pact extends those benefits to other products to cover nearly 100 percent of Colombian exports.
The pact also opens the door to more investments in Colombia both by US companies and by businesses from third nations who may want to take advantage of the trade benefits. “Colombia is the perfect platform from which to export to the United States,” said President Santos.
Not everyone is happy
Today’s bombing left two people dead and injured 24, including former interior minister Fernando Londono who was believed to be the target of the bomb. Bogota Mayor Gustavo Petro told reporters at the scene that the attack was an attempt to "sully the city on the day the FTA is inaugurated."
Initial speculations suggested the bombing was related to student protests against the trade agreement at universities in the city, which highlights the reality that not all parties are happy with the trade pact.
Human rights groups have been largely outspoken throughout the FTA process. Human rights advocates in Colombia and Washington effectively lobbied the US Congress to use the passage of the FTA as leverage to demand Colombia address labor and human rights violations against union leaders.
It was only after Colombia agreed to a Labor Action Plan in April 2011 in which the South American nation pledged to strengthen protection for organized labor leaders that the FTA moved forward. But according to the National Labor School (ENS), a labor union research center, the Colombian government has only implemented 28 out of the 37 commitments included in the labor plan, and many of those only partially.
Labor unions now have a “post-FTA agenda,” says ENS president Luciano Sanin. This includes monitoring the application of the action plan and the labor practices of American companies that set up shop in the country.
Some Colombian businesses are also worried about the FTA. Poultry producers are some of the most vulnerable to American imports since industry leaders say American chicken could come in at half the price of the Colombian product. While whole chickens, breasts, and wings are immediately tariff-free, leg quarters – which American consumers generally reject – are subject to quotas which will be gradually expanded as tariffs drop. But the protections are not enough, says Jorge Quintero, general manager of poultry producer Quinsagro in Bucaramanga, the unofficial chicken capital of Colombia. He says he sees a “sad panorama” for the industry.
A study of the FTA’s impact on small farmers paints an equally grim picture. As much as 70 percent of Colombian peasant farmers could see their income drop by 16 percent as an effect of the FTA. The study predicts that rice imports could decrease rice cultivation in Colombia by 31 percent. “The negotiation of [the] agricultural part of the FTA with the United States was very bad,” says Fernando Barbieri, one of the co-authors of the study.
Despite the dire predictions for small-scale farmers, Colombia expects its overall exports to increase by at least 10 percent this year under the FTA. The US International Trade Commission calculates the value of US exports to Colombia could rise by $1.1 billion, while Colombian exports could grow by $487 million. Trade between Colombia and the US last year was valued at more than $35 billion.