Monday, June 20, 2011

Popping Corks

Colombian Ambassador Gabriel Silva started out a roundtable to update reporters on the status of the long-stalled US-Colombia free trade agreement Friday by announcing he had “moved the champagne from the wine cellar into the fridge.”

But the Ambassador was not celebrating any progress on his country’s FTA with the United States. Tha...t deal – along with trade pacts with Panama and South Korea – remains in limbo while the White House and Congressional Republicans try to strike a deal to move the FTAs and expired Trade Adjustment Assistance benefits.

Instead, Mr. Silva was getting ready to pop open the champagne in response to the announcement that a trade agreement between Colombia and Canada will take effect on August 15.

“This is good news for all of us who believe in free trade,” Mr. Silva told reporters.
But it’s bad news for many US exports to Colombia – particularly agricultural products. US share of Colombia’s agricultural market already has been taking a nosedive since Bogota signed a trade deal with the big agricultural producing countries of Mercosur. Now – in less than two month – Canadian wheat, pork and other key commodities will have a competitive advantage over US products.

Mr. Silva said he has long been arguing that the US delay in approving the FTA – which has sat on the sidelines for over four years now – is costing US jobs. The situation will only get worse on August 15. And Colombia is continuing to look for other trading partners. A trade pact with the European Union is expected to take effect early next year. Meanwhile, Colombia’s legislature last week approved an investment protection agreement with China – the first step toward a possible free trade deal with that country.
Asked by WTD if it’s too late for the United States to win back its lost market share in Colombia, the Ambassador was optimistic. Colombians actually prefer US products and there are already strong business ties between Colombian and US companies because of the Andean trade preferences program (although that is now also expired).

But while the White House and Congress continue to wrangle over TAA, Colombia is moving ahead. Mr. Silva said he believes President Obama will live up to his commitment to get the FTA through Congress before the summer recess. But the Ambassador added that he hopes Congress is wise enough to understand that if the FTA is not approved now, it probably never will be.

So, is it time to get the champagne ready?

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