Colombia's Stock Market and Economy Boom While the Colombia FTA Languishes into A Fourth Year
President Obama recently outlined his plans to "help U.S. businesses double their export sales and add what he said would be 2 million more jobs at home during the next 5 years."
To help increase U.S. exports, it would seem like passing the Colombia Free Trade Agreement (FTA) would be a real no-brainer. It was signed in November 2006 and has now been languishing for 1,209 days waiting for Congressional approval, according to the Latin America Trade Coalition, which has helped to organize support of the FTA from:
1. More than 1,200 American companies, associations, and chambers of commerce.
2. All of the leading U.S. business and agriculture associations, representing literally millions of workers, farmers, and companies in every major sector of the U.S. economy: manufacturing, technology, services and farming.
3. More than 400 state and local chambers of commerce.
4. More than 50 organizations representing producers of agricultural commodities from apples to zucchini.
5. The entire textile and apparel supply chain, from cotton growers and yarnspinners to textile and apparel manufacturers.
6. The editorial boards of almost every major newspaper including the Wall Street Journal, LA Times, Washington Post, Miami Herald and even the New York Times ("We don't say it all that often, but President Bush is right: Congress should pass the Colombian free-trade agreement now. We believe that the trade pact would be good for America's economy and workers.").
As the Colombia FTA stalls into a fourth year with almost universal support from every part of the economy, who or what is holding it up?
Apparently just one group: U.S. labor unions and their Democratic enablers in Congress. With the public support of unions at a 72-year low, it's amazing that they can still exercise such power to withhold thousands of jobs from fellow Americans by stopping FTAs with not only Colombia, but with Panama and South Korea as well.
Take just one example: Illinois-based, and major exporter Caterpillar laid off 20,000 workers last year, at the same time it was pushing for passage of the Colombia FTA. According to IBD, "Without free trade, Caterpillar is stuck paying around $100,000 in tariffs for each earthmover it sells to Colombia, a big mining country that’s one of Caterpillar’s best markets."
The graph above shows Colombia's incredible booming bull market - Colombian stocks have more than doubled in the last year with a whopping 120% annual return, and the market has increased 8-fold since early 2004. This makes the failure to pass the Colombian FTA even more regrettable, since U.S. exporters like Caterpillar (and its thousands of laid-off workers) are missing out on the opportunity to gain from Colombia's booming economy.
If Obama was really serious about increasing both U.S. exports and U.S. jobs he would have pushed the Colombia FTA through already. At least he's been talking more about it lately, let's see how serious he really is about creating jobs (even if they're non-union) by passing the signed FTAs with Colombia, Panama and S. Korea this year. My prediction is a lot of talk, but no action.