Bush Administration Powers Up to Pass Colombian Free Trade Agreement

President Bush is prepared to do a little arm twisting to get the U.S.-Colombia Free Trade Agreement passed before he leaves office next year.

The FTA has been mired in politics and opposed by several Democrats. U.S. labor unions are pressuring Democrats to be tougher on how labor unions and labor activists are treated in this South American country, where hundreds of union activists have been killed over the last 20 years.

The Bush administration recently urged Congress to move forward with the U.S.-Colombia Free Trade Agreement when it returns from Easter break on March 31.

Whether this will happen is a political juggling act. First the White House has to send the agreement over to be approved by Congress, which has 90 legislative days to get the job done. But the White House doesn’t want to send the accord to the Hill until it has some signal from Congress about what kind of vote it will get. So pressure is on to garner more votes for the trade deal.

“Usually there is some behind-the-scenes counting of the vote before you go through the public spectacle of sending the free-trade agreement over,” said Natalie Hanson, a trade-policy expert at Washington, D.C.–based consultant International Development Systems Inc. “I think the White House feels frustrated that all they hear about is the labor situation [in Colombia].”

The Colombian free-trade agreement has been a delicate issue to balance even though the free-trade agreement with neighboring Peru was less painful and should go into effect during the latter half of 2008.

According to the U.S. State Department, Colombia supplies 90 percent of the cocaine found in the United States. For years, Colombia has been a country where violence ruled. But since President Aacute;lvaro Uribe took office in August 2002, the situation has gotten better. The U.S. government maintains that Uribe has improved labor and environmental conditions, reduced violence and demobilized thousands of paramilitary rebels. He is also a faithful ally in containing the left-wing Venezuelan government headed by Hugo Chavez.

In January, U.S. Secretary of State Condoleezza Rice led a congressional delegation to Colombia to show politicians what strides had been taken to deal with violence there and expand the economy. The trip included a meet-and-greet with Uribe. But that still hasn’t moved things on.

“What it basically has come down to is a showdown between the White House and the Democratic leadership in Congress,” said Nate Herman, international trade director for the American Apparel & Footwear Association, a trade group in Arlington, Va. “Because of the legislative timetable, the free-trade agreement has to be submitted to Congress within the first week after Easter break to force Congress to consider it before the end of the year.”

In the interim, Congress did vote to extend the Andean Trade Preference and Drug Eradication Act until the end of the year, which gives Colombia, Peru, Bolivia and Ecuador preferential trade tariffs on certain items, including apparel and textiles. The idea is to foster economic development and provide an alternative to cocaine production.

But the uncertainty around all these trade programs has hurt Colombia’s apparel industry. Colombia’s apparel exports to the United States were down 25 percent in 2007 over 2006.

It has also been detrimental to the U.S. textile business, which sends cotton and fabric to that South American country to be sewn into garments. U.S. fabric exports to Colombia dipped 28 percent in 2007 over 2006, with yarn exports off by 15 percent.

“It hurts the apparel industry if this thing drags on,” Herman said. “We definitely need this sooner rather than later.”

Other free-trade agreements that are pending include:

bull; The Panama Free Trade Agreement, which probably won’t be passed this year. Both countries signed a free-trade agreement in 2007, but neither country’s legislature has approved the accord. The pact hit a roadblock after Pedro Gonzaacute;lez, a prominent politician, was elected to the presidency of the Panamanian legislature last year. In 1992, he was indicted by a U.S. federal court for the killing of American serviceman Sgt. Zak Hernandez and for seriously wounding Sgt. Ronald Marshall. The U.S. government considered the ambush an act of terrorism. Secretary of State Rice called Gonzaacute;lez’s election “troubling.”

bull; The South Korean Free Trade Agreement has gotten bogged down in one issue: beef. That country has banned U.S. beef imports since December 2003, and it doesn’t seem to be willing to lift its beef prohibition. Sen. Max Baucus (D–Mont.), who is head of the Senate Finance Committee, has vowed the trade deal will not make it through his committee unless South Korea reverses its beef policy.

bull; The Peruvian Free Trade Agreement could be up and running by July 1 at the soonest or by the end of the year at the latest. Both countries approved the free-trade agreement last year. Peru is making changes to its domestic laws to coordinate with the free-trade agreement rules.