After years of negotiating the U.S.-Colombia Free Trade Agreement and an unprecedented move by Colombia to comply with a mumble-jumble of shifting American demands, President Barack Obama has sadly kept the U.S.-Colombia relation in a “deep freeze.”
While Obama never fails to bend to the whims of American trade unions that see trade agreements as a threat instead of an opportunity, Colombia has rightfully lost patience with the U.S. This, after both countries originally signed the U.S.-Colombia Free Trade Agreement in 2006 in a deal that once signified the preeminence of democracy and free enterprise.
The agreement would immediately create much needed well-paying U.S. jobs as tariffs on U.S. exports to Colombia would vanish overnight. Unfortunately, we continue to live in a time warp of protectionism and a destructive mentality.
Now a new vote on the Colombian Free Trade Agreement is coming, but the damage is done and we have given our competitors all the momentum while U.S. exporters have paid $3.5 billion in taxes to the Colombian government since the agreement was signed.
The upshot is Colombia has now signed free trade agreements with Canada and the European Union. Colombia’s legislature recently passed the Chinese Trade Promotion and Protection Bill, which will open the floodgates of trade with China.
If we don’t move quickly to end our indifference, Colombians will be buying Canadian wheat, not American. They will be buying European manufactured goods, not American. And they will be giving China another strategic and economically significant beach head on the South American continent.
But that’s not all; as Colombia has essentially given up on the U.S. as a reliable partner, there are reports they are in talks with South Korea, Turkey and Japan. South Korea? Oh yes, another country that has bent over backward to sign a Free Trade Agreement with the U.S. but is also in limbo, along with Panama.
This defies explanation. Ninety-three percent of Colombian exports enter the United States duty-free whereas most of our exports are subjected to tariffs. Those beautiful cut flowers we import from Colombia came into the U.S. duty-free. The American fertilizer and tractors we send them to grow these flowers pay stiff tariffs.
The U.S. exported $9.5 billion to Colombia in 2009. With our competitors locking in their advantages, do you expect our exports to Colombia to increase? No way. And as the export numbers drop, so will U.S. employment figures.
In an interview published in a national business newspaper, Sergio Diaz–Granados, Colombia’s trade minister, is quoted as saying: “We’ve been talking about a U.S.-Colombia free trade deal for 20 years, and it’s certainly the trade deal we want more than any other…but we have to continue working in other directions.”
If you keep telling your fiancee that you love her, but jilt her at the altar over 20 years, that relationship is in deep trouble. My concern is even if we finally get this agreement ratified the ill-will we have created and the momentum we have given our competitors will be hard to overcome.
South America is a market with enormous potential, as once unstable governments have created a sound economic structure that has led to a growing middle class and a favorable business environment. Is it any wonder that China and other countries have a keen eye on this region? Meanwhile, the U.S. government is sitting idle while trade opportunities abound.
What happened to Obama’s pledge to double U.S. exports in five years? This is a pipe dream when you start delaying trade agreements that eliminate tariffs on U.S. products. When U.S. goods cost more than that of our competitors, foreign consumers will simply stop buying U.S. goods. Nothing too complicated to understand about that.
The U.S. is running out of friends and running out of markets. Instead of strengthening relationships with our traditional trade partners; we are keeping them at arm’s length. The Obama administration’s solution is to ignore old friends while attempting to make new friends out of sworn enemies. As we have seen repeatedly over the past few years, this is a non-starter.
There’s an old expression that you “leave with the person that brung you to the dance.” It is time we take this advice to heart.
Another lost friend. Another lost opportunity. Another lost job for a family that desperately needs something to believe in.
© 2013 Moneynews. All rights reserved.