Colombia is the World's #1 Stock Market; Maybe It's Time for Obama to Push the U.S.- Colombia FTA
YTD: 43.4%
One-Year: 67.2%
Three-Year: 25.1%
Five-Year: 25.8% (second to Indonesia's at 27.6%)
Ten-Year: 38.1%
It's now been 1,382 days since the U.S.-Colombia free trade agreement (FTA) was signed in 2007, and it is now languishing into its fourth year awaiting Congressional approval. The Latin American Trade Coalition estimates that almost $3 billion in tariffs have been imposed on U.S. exports since the FTA was signed. Especially now that Colombia's stock market is booming, the failure to pass the Colombian FTA is especially inexcusable because it means that U.S. exporters are missing out on a golden opportunity to gain from Colombia's thriving economy.
The Colombian FTA has support from 1,200 American companies, associations, farm and ranch groups, and chambers of commerce, as well as support from the editorial boards of almost every major U.S. newspaper including the Wall Street Journal, L.A. Times, Washington Post, Miami Herald, Chicago Tribune, Detroit News, and even the New York Times, which wrote in 2008, “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.”
With incredible export opportunities awaiting U.S. manufacturers in booming, emerging markets like Colombia, with the huge potential to create much-needed jobs for America’s workers, and with universal support from almost every sector of the economy, what could possibly be holding up the FTAs with Panama, Colombia and Korea? Apparently just one group: U.S. labor unions and their Democratic enablers in the White House and Congress.
If Obama was really serious about supporting free trade, doubling U.S. exports, creating jobs and stimulating the economy, he could easily and costlessly accomplish all four by pushing Congress to approve the signed FTAs with Colombia, Panama and Korea.
13 Comments:
http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/andean-andin/can-colombia-colombie.aspx
Canada took 2 years to pass the FTA with Colombia. I find that too long, even for bureaucratic Canada.
http://philosophyofnonintervention.blogspot.com/
The only thing standing in the way of free trade between the US and Colombia is tariffs imposed by Colombia. The last time we made a trade deal with them we agreed to remove tariffs without requiring them to do the same for us. Our trade negotiators gave up real tariffs in return for a promise from Colombia to talk about giving up their tariffs. Colombia could unilaterally bring about free trade without this agreement.
But in truth Colombia’s tariffs are not large enough to be a large impediment to trade. Using the numbers quoted here $3 billion in tariffs over 1,382 days works out to a tariff of under $2.2 million a day. According to trade data at http://www.census.gov/foreign-trade/balance/c3010.html#2009 total exports to Colombia in 2009 were $ 9.45 billion. On a 365 day year that is $25.9 million a day. That works out to an average tariff of under 9 percent. That, of course, assumes that the tariff calculation of an advocacy group is correct. Back when Commerce Secretary Carlos M. Gutierrez issued his same numbers the average tariff calculated out at under 7 percent.
The Colombia chapter of the “2009 National Trade Estimate Report on Foreign Trade Barriers” is at
http://www.ustr.gov/sites/default/files/uploads/reports/2009/NTE/asset_upload_file166_15465.pdf
The report on Colombia tariffs contains the following statement:
Most duties have been consolidated into three tariff levels: 0 percent to 5 percent on capital goods, industrial goods, and raw materials not produced in Colombia; 10 percent on manufactured goods, with some exceptions; and 15 percent to 20 percent on consumer and "sensitive" goods. Exceptions include automobiles, which are subject to a 35 percent tariff, beef and rice subject to an 80 percent duty, milk products subject to a 33 percent tariff and other agricultural products, which fall under a variable "price band" import duty system.
What we currently export to Colombia is listed at
http://www.census.gov/foreign-trade/statistics/product/enduse/exports/c3010.html
With a 2008 GDP per capita of $8,400 a free trade deal with Colombia is not going to create much additional trade with the US regardless of tariffs. Most of any increase will be in agricultural goods which are not labor intensive so do not expect to put many people to work with this FTA. The tariff reductions are a spoon full of sugar to make the outsourcing and foreign direct investment go down. The text of the Colombia free trade agreement which is online at http://www.ustr.gov/trade-agreements/free-trade-agreements/colombia-fta/final-text Chapter 10, Investment, lays out the real reason multinational corporations want this agreement. It protects the outsourcing of jobs and capital.
If free trade was the road to prosperity then we would not be in this mess in the first place. Even without all the pending FTAs we have more free trade in place now than we have ever had. Free trade got us to where we are today. Tariffs and trade restrictions took us to were we once were.
Put firm, written committals (without weasel-wording) to actual jobs that will be created & maintained over the long term and you might get interest. Have those jobs fit the existing US skillsets and you can get rid of the dislocation excuse. Require that the jobs address any national security concerns, and you have a reason to approve it out of strength over that hellhole.
Sethstorm,
"Put firm, written committals (without weasel-wording) to actual jobs tha..."
Even if your fascist fantasies were carried out, union thugs would still lobby against the FTA.
"Require that the jobs address any national security concerns, and you have a reason to approve it out of strength over that hellhole."
Hellhole... You've never stepped foot in Colombia. I would much rather be there than in your mother's basement with you.
Paul said...
No, it would be an agreement. If the agreement is signed, the jobs would be created and filled by US citizens that have been looking for work. A simple agreement that connects the unemployed with work and allows for freer trade.
If the U.S. - Colombia Free Trade Agreement Colombia will still assess a 16% charge on all U.S. products imported that the U.S. cannot charge on Colombian products!
How will that be possible?
Colombia, like virtually all countries except the U.S., has a Value Added Tax (VAT). After the U.S.-Colombia FTA is passed the U.S. will have at least a 32% cost disadvantage because of Border Adjusted Tax consequences.
The U.S. praises Free Trade and the WTO but is wildly out of synch with 137 other countries who have adjusted their tax system to work in harmony with global trade.
Maybe we have Colombians take care of Afghanistan. Somehow the Colombians are transferring huge cocaine profits into the above-ground economy. Can opium profits be sued as well in Afghanistan? Afghanie, under US rule, has become the largest exporter of opium in the world--but some suspect the drug profits are being laundered out of the country.
Maybe we can offer free trade to Colombia if they teach the Afghanies how to make use of their drug profits---and then we can leave that hellhole fast. Put it into Colombia's hands and vamoose baby.
Venuzuela has implemented a plan for food imports that eliminates duties, tariffs, import licenses, permits and a variety of other non-tariff barriers. There is a concern however with this scheme. There is only one organization in the country that is allowed to implement this plan and that is the government.
Via The Drudge Report: "The Good Life" shopping card will allow citizens to purchase duty free food at government owned stores. Private concerns will still have to have their products subject to all the government imposed duties and non-tariff barriers on food that can be dreamed up!
"Hellhole... You've never stepped foot in Colombia. I would much rather be there than in your mother's basement with you."
On reading this, sethstorm scowls, and from his spot on the couch in his mother's basement, slowly begins to type an angry but meaningless response to Paul's comment.
"The tariff reductions are a spoon full of sugar to make the outsourcing and foreign direct investment go down."
Big deal. We already have FTA's with geographically closer Mexico and Central America. So why should we care about adding Colombia to the mix?
This post is a telling example of how macro-analysis so often results in misleading conclusions.
The United States began allowing duty-free treatment of imports from Colombia as part of a multi-faceted back-room deal that was tied to the Andean Trade Promotion and Drug Eradication Act (ATPDEA). This regional "trade preference" program has more to do with the "drug war" than it does trade. The U.S./Colombia trade barrier imbalances are most likely a surreptitious way of channeling aid to the Colombian economy in exchange for unfettered access for the D.E.A., and for all of the other government/military interests that come as part of the 'Empire's' deal ( El Salvador etc.). Such claims though are difficult, if not impossible, to support, and so... if the analysis of trade between the US and Colombia is confined to what is possible to substantiate with statistics and/or known facts... the conclusions are what leave us with nonsense such as: "Colombia is the World's #1 Stock Market". Not to suggest that Colombia's stock market is not #1 in the context presented in this post, but... if the favored trade arrangement were not allowing Colombia to use its drug production and its strategic location (next to Venezuela) as a bargaining tool, then Colombia would once again be nothing more than just another Banana Republic. In other words, Colombia's stock market success relies on its parasitic arrangement with the U.S. So, as all too often happens, the macro-analysis being recommended here is self-defeating. Perhaps the FTA with Colombia has not been ratified because our Congressional representatives are privy to information that we can only speculate on... assuming we are not fooled by the macro-analysis.
Hellhole... You've never stepped foot in Colombia.
Fine if you want to live in an highly-fortified paradise of a gated community.
On the other hand one is less likely to get kidnapped for ransom in the US, unlike various Central and South American countries.
Cocainelombia is the world's No. 1 stock market.
So let's legalize pot in the USA and see what it dopes for the Dow!
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