The American non-profit research group, the Brookings Institute, issued a brief Thursday arguing for a speedy approval of the U.S.-Colombia free trade agreement.
The report stated that passage of the FTA is expected to increase the U.S. GDP by $2.5 billion, and would create a more stable legal framework for U.S. investment in the country as well as provide alternatives to cocaine production for Colombian farmers.
According to the brief, the FTA would immediately eliminate 77% of Colombian tariffs on U.S. goods and phase the rest out over a 10 year period. The institute predicted a corresponding rise of American plastics and chemical sales to Colombia of 23% compared to 2007 levels, a 40% rise in motor vehicles and parts, and a 20% gain in cereal grains.
The Institute also noted that the agreement would create transparency in Colombia’s legal and regulation process and allow investors to voice their oppinions in Colombia’s rule-making process. The agreement would also eliminate the requirement that American service corporations hire Colombian nationals.
The report touched on labor conditions in Colombia, noting that Colombia has dedicated more inspectors and policemen to protecting labor rights, pushed through legislation that would bring criminal charges against employers who undermine bargaining rights, and has reestablished a labor ministry to monitor working conditions and preserve labor rights. Nevertheless, Colombia still accounted for more than half of the world’s unionist murders this year and the institute also noted a backlog in Colombia’s protection program for threatened workers.
The institute also argued that a majority of Colombian products enter the U.S. duty free under the Andean Trade Promotion and Drug Eradication Act, while U.S. exports are taxed. However as of last February, Congress failed to extend the act, and Colombian lobbyists were still pushing for its reenactment this June.
Finally the report argued that Colombia has already established FTA’s with Canada and the E.U. and is even considering new investment opportunities with China.
The report was authored by Mauricio Cardenas, the former Colombian minister of economic development and transportation under the conservative Pastrana administration. Cardenas currently serves on the board of directors at Ecopetrol, Colombia’s largest oil company.
