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COLOMBIA
FTA woes
Susan Abad
9/7/2006
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Free trade pact with the United States leaves more economic victims than beneficiaries.

After 26 months of often rocky negotiations, Colombia approved a final text for a free trade agreement (FTA) with the United States in late February, one which will have more negative than positive effects on the majority of Colombians.

That is what Sen. Jorge Enrique Robledo, of the leftist Democratic Pole — the second-largest political force in the country — said, adding that the pact is "horrible" for the masses, and "will bring ruin to the agricultural and even industrial sectors."

The Colombian Action Network opposing the Free Trade Area of the Americas (FTAA), known by the Spanish acronym RECALCA, shares that viewpoint. "The dividends from the marketing of sugar, rice and chicken will increase capital for US business owners," it said.

"Finally, the United States imposed the FTA it wanted," lamented Alberto Bravo, president of the Colombian Pharmaceutical Industry Association.

The agreement "will cause an imminent price increase of medicines, as the United States succeeded in adding protection standards for its sector over the World Trade Organization’s parameters, and this will translate to less competition … and thus higher prices for the consumer," added Bravo.

Robledo says that the "chapter on intellectual property impedes Colombia’s development in science and technology," and that the Pan American Health Organization warned that Colombia’s medicine costs will increase US$900 million annually.

For his part, former president of the Grain Producers Federation, Luis Eduardo Quintero, said at the end of negotiations that his sector would take a big hit from the agreement. "Take yellow corn, for example. The competition is going to be very rough, since 2 million tons of it will enter Colombia tariff-free, and the price of (Colombian products) will drop to the floor," he said, adding that beans and soy will suffer from the importation of these soon-to-be far cheaper products from the United States.

Poultry farmers are likely to be the most affected by the agreement. Jorge Enrique Bedoya, executive president of the National Poultry Raisers Association of Colombia, said that the FTA will put Colombian poultry production at risk of extinction.

"From the beginning of negotiations, we fought for the United States not to bombard us with cheap chicken leg quarters, which are parts that US residents throw away because they prefer the breast and the wings," Bedoya explained. "The amount allowed for importation of this product increased from the original 26,000 tons annually to 27,040 tons annually."

"The FTA also cleared the way for the importation of seasoned chicken parts, which will be taxed with a 70-percent tariff, not the 164.4 percent that we asked for," said Bedoya. "They will inundate us with leftover US chickens that will only have a 45-percent tariff, when we were told that it would be 113 percent."

But business owners will not be the only ones to feel the effect of the free trade agreement. President of Colombia’s Central Workers Union, or CUT, Carlos Rodríguez, says that the trade pact with the United States will cost Colombia 450,000 jobs, and there are some who say that in sectors that will benefit economically from the agreement, workers will not receive higher salaries. The Lawyers’ Collective Corporation recently denounced that fresh cut flower producers save $25 million each year thanks to the Andean Product Tariffs and Drug Eradication Act, which expires at the end of 2006, but the average salary per worker in the sector is still $180 per month, while demand increases, subcontracting becomes more widespread and the possibilities for unionization and collective negotiation dwindle.

"But the FTA is not only agriculture and industry," said Robledo. "There will be patents for plants and it’s not true that national biodiversity or traditional knowledge will be protected," he said.

"In terms of telecommunications, public Colombian companies are required to rent their networks (to Americans) and also give the gringos the scandalous prerogative to demand compensation for ‘indirect expropriation’ which will appear when a government decision affects their projected earnings in the country," he added.

While the approval of both the US and Colombian congresses is still pending, victims of the trade pact’s policies are hoping to reconvert farmland for higher competitiveness.

"It’s a reality against which we cannot protest. What we need to do is search for competitiveness," says Rafael Hernández, general manager of the National Rice Growers Association of Colombia. On the other hand, Rafael Mejía, president of the Farmers’ Society, says that they are waiting for the government of President Álvaro Uribe — who began his second consecutive term Aug. 7 — to transfer the annual $217.4 million he offered to the sectors most affected by the FTA over the next 10 years.

But for those who oppose the agreement, there remains lots to be done.

"We have to be on alert when the Colombian Congress debates, where there are many representatives who may be against the treaty but who may prefer to receive some benefits from the government," RECALCA says. Others believe what political analysts say and the Colombian government fears: that the next US Congress to be elected Nov. 7 will have a Democrat majority and will not approve the FTA.


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