Monday, April 14, 2008

US Congress turns its back on Colombia FTA

Business Times - 15 Apr 2008


US Congress turns its back on Colombia FTA

Bush administration suffers stinging defeat by the Democrats on the trade deal

By LEON HADAR
WASHINGTON CORRESPONDENT

A US trade association has published an advertisement in several Capitol Hill magazines in recent weeks in which Venezuela's Hugo Chavez is seen hugging Cuba's Fidel Castro while his speech balloon conveys his request: 'Please reject the Colombia Free Trade Agreement!'

In case you failed to get the message, the ad explains: 'Venezuelan strongman Hugo Chavez doesn't like the US-Colombia Trade Promotion Agreement. He knows that it will strengthen our ties to Latin America, help a key ally and undercut his anti-American agenda.'

And if you still didn't get that, the ad then concludes by proclaiming that the Colombia Free Trade Agreement was 'good for America but bad for anti-American dictators'.

Yet despite the ad and a related massive public relations and lobbying campaign by the Bush administration, the Colombian government and leading American businesses, the Democratic-led US Congress didn't seem to buy into the idea that a failure to approve the trade accord with Colombia would play into the hands of Mr Chavez and his buddies in Latin America.

Indeed, the US House of Representatives voted mostly along party lines and by a 224 to 195 margin last Thursday to over-ride a requirement that Congress must vote on the controversial trade deal within 90 days, during which the House is in session.

The vote made it all but certain that the trade agreement will not be embraced by Congress this year.

On one level, the decision put off indefinitely a vote to ratify the free-trade agreement (FTA) with Colombia could be seen an election-year challenge by the Democrats to President George W Bush and his Republican allies on Capitol Hill.

At a time when the mess in Iraq and the recession have resulted in growing public opposition to Mr Bush's economic and foreign policies, the White House occupant and his aides were hoping for a small and yet symbolic victory for the president in the form of the passage of the FTA.

Instead, the Democrats ended up handing the Bush administration a stinging defeat on a trade deal that had been advertised as central to US economic as well as strategic interests.

Moreover, the two Democratic presidential candidates, Senators Hillary Clinton and Barack Obama, had placed the opposition to the FTA with Colombia at the centre of their election campaign in Pennsylvania, where the Democratic presidential primary will take place this month.

Indeed, in the state whose economy, and especially its manufacturing industry, has been under pressure from foreign competition, the Democrats' populist anti-free trade rhetoric tends to play very well among its large number of unemployed blue-collar workers.

Critics of Mrs Clinton and Mr Obama argue that their current opposition on the FTA with Colombia and to the Bush administration's free trade agenda in general reflects short-term political calculations as they try to win the support of voters who blame their depressed economic conditions on trade competition from low-wage economies in Latin America and Asia.

At the same time, the trade unions that provide the Democrats with both financial and electoral backing have been leading the campaign against the Colombia-US FTA.

But Mrs Clinton and Mr Obama also have close ties to American companies who support liberalising international trade, including the accord with Colombia.

In fact, the Clinton campaign was forced to announce recently that its chief strategist Mark Penn would be stepping down from his official post, after news reports indicated that a public relations company Mr Penn represented had been helping the government of Colombia in its efforts to win the FTA with the US - the same agreement that Mrs Clinton was denouncing.

The passage of the FTA would have had some impact on the American economy. The US International Trade Commission estimated that US exports to Colombia would increase by US$1.1 billion if the deal had been approved.

Colombian officials had told US lawmakers that the FTA would have helped attract more foreign investment into Colombia by making its access to the US market permanent. They estimated that the failure to approve the deal would cost Colombia close to 500,000 jobs.

But more important, Colombia and its President Alvaro Uribe are considered to be staunch allies of Washington at a time when anti-American sentiment seems to be rising in the hemisphere - thanks, among other things, to a campaign headed by Venezuela's Mr Chavez.

Colombia is also central to the US-led fight against drug trafficking in the region. Hence the passage of the FTA with Colombia could have helped enhance the influence of President Uribe at home and in the region. The failure to approve the accord would probably be seen now as a major political blow to the Colombian leader and his pro-American policies.

Mr Bush decided to use a 'fast track' stipulation in the trade that would have forced lawmakers to vote on the accord within 90 days. But the House Speaker, Democratic Nancy Pelosi of California, succeeded in convincing a majority of lawmakers to eliminate the requirement and, by extension, to kill the FTA.

Proponents of free trade in Washington are concerned over the long-term effects of the decision not to approve the FTA with Colombia. Their main worry is that against the backdrop of a painful economic recession and the signs that many Americans expressing opposition to the continuing opening American markets to imports, the Democrats who are expected to increase their control of Congress after the elections in November will decide to pursue a 'fair trade' - aka 'protectionist' - agenda.



Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.

1 comment:

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