The Need for Trade and Favorable Latin American Relations, Not Cheap Domestic Politics

Posted: Apr 30, 2008 11:50 AM
The Need for Trade and Favorable Latin American Relations, Not Cheap Domestic Politics

The Colombia Trade Promotion Agreement (TPA) has been in the news recently after President George W. Bush, who steadfastly supports it, submitted it to Congress on April 8 for a vote within the next 90 legislative days, as required by the "fast-track" authority under which the United States negotiated the TPA. Speaker of the House of Representatives Nancy Pelosi (D-CA) promptly announced that she would use House rules to prevent a vote on it. Two days later the House voted 224 to 195 to suspend the 90-day timeframe. Some Republican leaders in both Houses of Congress balked at the unprecedented, aggressive manner in which the House used the vote to flaunt the statutory requirements governing trade agreements.

During an election year the Colombia TPA has become a political football. Democrats are opposing it in order to shore up support with their union base prior to the election this November. Democrats claim that Colombia has an organized hit-squad to murder the country's trade unionists. While it is true that many trade unionists were murdered in Colombia in the 1990s, the number has fallen significantly since the turn of the century, as has the overall homicide rate, to the point where it is obvious that there is no such orchestrated campaign and the nationwide homicide rate appears to be less than that of Washington, D.C. Speaker Pelosi's rejection of the TPA on these grounds is tenuous at best. She is doing a disservice to both American and Colombian manufacturers by prohibiting a vote.

Regardless of party preferences, there are several reasons the Senate should ratify the Colombia TPA. First and foremost, free markets benefit consumers. They create more competition, which in turn lowers the prices of commodities. When protectionist barriers are erected in the form of tariffs they hurt the consumer by artificially inflating prices above market value in order to guarantee revenue for certain industries.

The second reason is that TPA would open Colombia's markets to American goods. Colombia's economy is rising, and as it does its consumption power rises. This would provide U.S. farmers and manufacturers an opportunity to sell their goods in Colombia without having to pay the costs of prohibitive tariffs. Such an economic arrangement is always beneficial for American industry but is crucial during a downturn in our economy, when unemployment is on the rise. And it is curious in this regard that union leaders oppose the TPA because its non-implementation weakens the competitiveness of American manufacturing, including many union jobs. For example, as THE WALL STREET JOURNAL noted, Caterpillar Inc. has 8,600 jobs at its two factories in Illinois. It exports more products to Colombia and Peru than to Germany, Japan or the United Kingdom. The main reason for this is the extensive silver and coal mining industries in the two countries. For Caterpillar retaining and growing its share of the equipment market in Colombia is important, so the elimination of tariffs would immediately benefit the company.

The third reason to support the TPA is that Colombia has made much progress since the election of its current President, Álvaro Uribe, in 2002. Uribe, a Harvard-educated lawyer with a tremendous work ethic and disciplined lifestyle, drastically has improved Colombia. Prior to his presidency, Colombia had a reputation as a fearsome haven for drug lords and the narco-terrorism of the Marxist Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN). Uribe used his widespread popularity to curb the power and influence of these two groups and to demobilize the paramilitaries operating in Colombia. He has helped clean up Medellín, the most violent city in Colombia and home to the Medellín Drug Cartel led by Pablo Escobar in the 1990s. In 2005 it had the lowest homicide rate, 35 per 100,000, it had had for 20 years and the lowest of any large city in Colombia. It was even lower than that of Baltimore. Unemployment has decreased as well and the City is now a thriving industrial center. Uribe deserves much credit for the way he has turned Colombia around.

Finally, Colombia is a friendly, democratic country that has made great improvements in the past six years. Its progress is in marked contrast to the regression of its neighbor Venezuela, which is under the control of Hugo Chávez, a hostile and brutal dictator. Chávez's goal is to destabilize the region to increase his own power. To that end, he has funneled money to Colombia's narco-terrorist groups. The United States has a responsibility to strength our economic and diplomatic ties with Colombia and the TPA would provide both a symbolic victory and an economic one.

It is a shame that Speaker Pelosi is playing politics with a vital trade agreement. The Colombia Trade Promotion Agreement should be passed immediately. It would be both an economic and a diplomatic disaster for the United States should Congress fail to ratify it. We can ill-afford such high-handed political maneuvers.