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US agrees to revise 'free trade' treaty with Colombia (officials)

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The governments of Colombia and the United States will negotiate revisions to their controversial “free trade” agreement, the commerce minister confirmed on Tuesday.

According to Colombia’s Ambassador to Washington DC, Luis Gilberto Murillo, bilateral talks on possible revisions to the so-called “US-Colombia Free Trade Pact” (FTA) are scheduled for May.

Murillo said in December that the government of President Gustavo Petro discussed with different organizations the revision of the 2012 treaty after it took office in August last year.

During the same period, the government has involved more than 50 regional organizations in the formulation of its economic development plan which will be presented to Congress next month.

Trade Minister German Umaña stressed that the government was not seeking to “renegotiate” the FTA, but to negotiate mutually beneficial “adjustments” in “friendly talks”.

The allegedly planned trade talks are the result of widespread criticism of the FTA, which has been followed by a 50% drop in exports to the United States that were supposed to benefit from the deal.

Exports to the United States

The US Congressional Research Service (USCRS) said in May last year that the treaty would also “increase foreign direct investment in Colombia”, which never happened.

In fact, US investment has grown from $2.2 billion in 2011 to $1.9 billion in 2021, according to the central bank.


Colombian farmers say government lifting of import tariffs endangers domestic food production


The FTA is especially hated in rural areas where farmers cannot compete with US food imports due to a lack of infrastructure and US agricultural subsidies.

The USCRS confirmed that some 200,000 farmers rose up in 2013 after being displaced by large agribusiness corporations.

Before the treaty, the Colombian Ministry of Agriculture warned that eliminating tariffs on staple crops could condemn farmers to “migration to cities or other countries (especially the United States) , to work in drug-growing areas or to join illegal armed groups”.

Between 2011 and 2021, the agricultural land used to grow coca grew by 219% and Colombia’s potential cocaine exports increased by 569%, show statistics from the national police and the United Nations Office against drugs and crime.

Government statistics further show that US companies have transferred more than $30 billion to Colombia since 2012 for goods that DANE says have never been exported.

A former U.S. Attorney confirmed in 2020 that “illegal drug trafficking depends on shadow financial networks to funnel the profits of drug traffickers into our banking system and beyond our borders.”


How Money Laundering Inflates US-Colombia Trade Statistics


Excerpt from the 2017 indictment of a banker whose office was used to launder money from the United States.

Despite evidence that the FTA destroyed Colombia’s agricultural sector and boosted cocaine exports to the United States, neither Washington DC nor Bogota want to renegotiate the FTA.

The fact is that the agreement has also allowed American companies to increase their exports to Colombia by more than 47% since 2011, according to the US Census Bureau.

Colombian President Petro needs the US trade deal and his US counterpart Joe Biden to implement his National Development Plan (NDP), which aims to reverse the negative effects of the FTA.

We are not doing a renegotiation, what we are doing is a friendly conversation with our partner with terms that each chapter of the free trade agreement talks about, in order to improve conditions for both countries…in the sense that the trade and investment will be more transparent, agile and convenient.

Minister of Commerce German Umaña

Murillo has lobbied Washington DC to hold FTA talks before the end of May, as that is the deadline for the Colombian Congress to approve the PND.

What is PND

The National Development Plan is arguably the most important proposal of every Colombian government as it defines its socio-economic strategy for the next four years. Petro’s PND is particularly ambitious because it includes sweeping economic reform that aims to end Colombia’s armed conflict through economic development in areas ravaged by violence for decades. According to the government, the pending NDP was formulated with input from more than 50 rural communities that are most affected by armed conflict and organized crime. These communities have generally been the most critical of the FTA, saying the trade deal primarily benefits US corporate interests at the expense of economic development and peace in the Colombian countryside.

Coffee plantation (Image: Ministry of Agriculture)

Petro’s PND is particularly ambitious because it wants to invest in the economy in a way that would allow rural communities to participate in the legal economy instead of the illegal economy, which thrives primarily on drug trafficking and illegal mining.

To achieve this, the government wants to create improved trade networks that would boost domestic consumption, create jobs and improve Colombia’s competitiveness in the global market.

This economic development, according to Petro, would allow Colombia to gradually become less economically dependent on the ups and downs of the oil and mining industry, and preserve the country’s natural resources and water supply.

The economic reform proposed by Petro echoes suggestions made earlier by international institutions such as the United Nations, the International Monetary Fund and the World Bank.


IMF urges Colombia to diversify its economy while seeking oil


A truck was reportedly incinerated by the paramilitary organization AGC (Screen capture: YouTube)

The government’s ambition proposals were made against a backdrop of extraordinary economic volatility caused by the COVID 2020 pandemic and the war in Europe that began early last year.

This drove up inflation in Colombia, causing a major devaluation of the peso and soaring inflation throughout 2022.

On top of that, illegal armed groups for years have increased their ability to sabotage urban and rural economic development and weaken the state.

According to the President, the negotiated dismantling of these criminal structures combined with his economic development plans would reduce this risk.

This is anything but certain, however. On several occasions in Colombia’s history, failed peace efforts have ended up further destabilizing the country.

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