By: Jorge Pareja
Translation: Jacob Sulzbach
President George Bush described Colombia last January 28th as "a friend of the United States who is confronting violence and terror, and is fighting against narcotics traffickers," and he warned the Congress that "if we do not approve this treaty [Free Trade Agreement -FTA-], we will strengthen those who favor false populism in our hemisphere. The way in which we must come together, is to approve this treaty and show our neighbors in the region that Democracy brings a better life." The U.S.-Colombia FTA would be the last of a series of treaties -- negotiated by the Bush administration -- with five countries of Central America, the Dominican Republic, Chile and Peru.
The problem is that already on the 29th of June, 2007, the Speaker of the House, Nancy Pelosi and other leaders of the Democratic Party had announced their opposition to the FTA with Colombia. With respect to the treaty they protested: "There exists a generalized worry in the Congress for the level of violence in Colombia, the impunity, the lack of investigations and judgments, and the role of the paramilitaries . . . we consider that, concrete proofs of sustainable results in Colombia should be included, the members of the Congress will continue working with all the interested parties to reach this objective before considering any FTA. As a consequence, we cannot support the FTA with Colombia at this moment".
Daniel T. Griswold and Juan Carlos Hidalgo, who carried out a study for the CATO Institute entitled: "A U.S.-Colombia Free Trade Agreement: Strengthening Democracy and Progress in Latin America," instruct us in this respect: "The labor organizations of the United States, especially the American Federation of Labor-Congress of Industrial Organizations -- AFL-CIO by its acronym in English -- a key voting bloc of the Democratic Party, made the defeat of the treaty with Colombia one of its main political goals". Why?
They are manipulating information and for that reason it is serious, according to the comment of the researchers: "The AFL-CIO cites the number of the 2,245 union members killed in Colombia since 1991 as the central argument against the approval of the free trade agreement. But the greater part of the killings occurred at the beginning of the period considered, since more than four out of five killings happened before Uribe took office -- the AFL-CIO accepts a nosedive of nearly 90% in killings of union members during Uribe's administration. Instead of recognizing the merits of Uribe in the drastic decline of the crimes, the AFL-CIO insists on sanctioning the sitting president, and those who elected him, for the failures of previous governments." "The color of the glass," through which they are able to manipulate statistics in such a way as to reach an objective. And they are achieving it!
The saying is that everything has "the color of the glass" through which it is viewed. Today, with the freezing of the FTA in the North American Congress this popular saying is more valid than ever because each one of the players in the process has an extreme opinion on the subject, pitifully they have used Colombia as the first victim of the North American electoral process. Today we can say that the FTA is dying. And lamentably Colombia really needs it.
What moves Colombia to look with despair for the approval of the FTA? With things being as they are, is the United States sending a negative message to Colombia?
Mary Anastasia O'Grady, Editor of the Wall Street Journal's "Americas" column, at the end of 2007 presented us with a revealing interview with Luis Guillermo Plata, Colombia's Minister of Commerce, Industry and Tourism. In this interview the excellent Colombian Minister instructs us on the Irish model and on how the government's team has outlined this course for Colombia. Let's take a look:
Luis Guillermo Plata spoke about the transformation of the Irish economy, of how it passed from being "the poor ugly duckling to the beautiful swan of Europe in just two decades," and how a "similar model of growth is just what Colombia needs".
The minister said to Mrs. O'Grady: ". . . We began traveling to Ireland years ago, because we were looking at those countries in the world that have been successful in attracting direct foreign investment. What we discovered was that Ireland reduced its corporate taxes from 40% to 12.5% and as a result began attracting investment; it had reduced the advantage of tax evasion and incremented tax collections. We returned to Colombia and we said "why should we not reduce (our corporate taxes) from 38% to 12.5%?
Mrs. O'Grady continues: "In a perfect world, he would have obtained a fixed corporate rate. But he had to arrive at compromises and, in its place, the "singular free enterprise zone" was what he got. The initiative extends the low tax rate to companies located within the "free zone," usually an industrial park, to any company that fulfills certain investment criteria. Companies -- excluding those involved in mining and petroleum -- who qualify by fulfilling the minimum investment objectives and commit themselves to fulfilling certain employment goals will then pay a fixed tax of 15% instead of 33%. Also, they import all raw materials without tariffs and they do not pay the value added tax. Besides offering these tax advantages, the government is doing "stability contracts" to guarantee that the rules of the game are not going to change with the next president. They are also working to reduce the regulatory load, since bureaucratic obstacles are one of the most common complaints of foreign investors."
The Minister contributes this important reflection: "In 2006, American official aid for development, destined to alleviate poverty in the world, was US $23.5 billion and was a waste of money. That is because development requires economic liberalization, and the leaders of the poor countries have few incentives to disturb the status quo of monopolies and protectionism that placed them in power . . . Colombia appears on this scene with a leader, President Alvaro Uribe, who is prepared to risk political capital to open domestic markets, to trim taxes and to push competition ahead on a track to fast growth in the Irish style." "The only thing that his government requests of Washington is bilateral commerce," the journalist finishes.
The FTA, Minister Plata asserted, is as important for the growth of Colombia as entrance to the European Union had been for Ireland: "That is the reason for which the FTA is so important . . . companies that invest in Colombia are looking beyond the domestic market and the recent dispute with Venezuela in which President Hugo Chavez threatened the closing of the border demonstrates the fragility of the Colombian export market. Around half of Colombian exports at the moment go to Venezuela and Ecuador. Having access to the American market and duty free imports originating in the U.S.A. are crucial questions for producers." It cannot be seen more clearly, this is "the color of the glass." We truly need this treaty.
We return to Daniel T. Griswold and Juan Carlos Hidalgo, the CATO Institute researchers, who with sufficient arguments demonstrated to us the benefits that the United States would obtain with the FTA: "The Free Trade Agreement with Colombia is designed to strengthen the civil society of Colombia and, at the same time, to generate economic opportunities so that U.S. producers sell their products to 44 million Colombian consumers, who would enjoy an upward mobility and would have a positive view of the United States. Like other similar treaties the United States already negotiated in the region, this one would demolish barriers to American exports. More than 80% of U.S. exports to Colombia are of products destined for industry that would become duty free to those consumers if the treaty were promulgated, and the remaining tariffs would be eliminated progressively throughout the next ten years. For agricultural producers of the United States, the FTA would allow duty free immediate access for high quality beef, cotton, wheat, soybean flour and most fruits and vegetables -- like apples, pears, peaches and cherries -- and many processed foods, like potato chips and crackers. The treaty would improve the sale of exports of pork, beef, corn, fowl, rice and dairy products".
But the benefits do not end there: In addition, "The FTA would strengthen protection of investments of American companies who are trying to reach Colombian consumers by means of a direct presence. The treaty would guarantee the nondiscriminatory rights to U.S. companies in their presentation of bids to obtain contracts with a great variety of ministries, governmental bodies, and regional governments of Colombia, as well as better access for American suppliers of telecommunications services. This FTA surpasses other bilateral treaties in order to satisfy the ever changing demands of the critics of trade treaties concerning the fulfillment of certain labor and environmental norms within Colombia".
"A study made in December of 2006 by the International Trade Commission of the United States considered that the treaty would increase American exports by 1.1 billion dollars. Since Colombian exporters already enjoy a virtually duty free access to the market of the United States, a trade treaty would allow the equality of conditions that trade skeptics do not cease demanding . . . Because U.S. tariffs already are low or null for the majority of imports originating in Colombia, the treaty would not have to generate the opposition of local special interests. . ."
". . . Bilateral trade between Colombia and the United States grew to 15.9 billion dollars in 2006 and is on track to surpass 17 billion in 2007. This value is similar to the bilateral trade with Chile, another country with whom a FTA exists, and almost double the trade with Peru, which became a trade associate in 2007." The truth, I think, is that we only can find ourselves in this situation for reasons of squalid political motivations, lamentably they chose us, the country that least deserves this treatment.
Well now, in a zone plagued by populist governments, with a leader who has won a place for himself thanks to an expansionist eagerness patronized with petrodollars, we do not understand how the United States would try to throw away Colombia, which is the only country that has put up a defensive wall against the growth of this socialist and anti-North American fever. What an unfortunate message this is sending to the region! With respect to this matter our friends at the CATO Institute pronounce themselves: "The importance of Colombia has grown in the last few years owing to the ideological battle that we are waging in the Andean region. With the coming to power of presidents of the populist left in South America, President Uribe represents the closest ally of the United States in Latin America".
Yes, Bush is totally right when he says: [ Colombia is ] "a friend of the United States who faces violence and terror, and fights against narcotics traffickers," that is certain, because a serious North American problem that we have faced bravely is drug trafficking. It is estimated that 90% of powdered cocaine that is consumed in the United States comes from Colombia. This represents a multimillion dollar business that illegal armed groups have been exploiting for more than one decade, and we have paid for it with deaths.
Compared with the United States, Colombia has compiled a relatively recent gangster history and we were released into the front lines of the war on narcotics trafficking very rapidly, it could be said from the murder of Minister Lara Bonilla. Whatever tragedies have followed from that time, however many dead we have put away since then, however many generations of the young have been failed, whatever territorial wars we have had to overcome on account of armed groups fed by drug trafficking, it is all fed on an unbridled consumption in the "developed world".
Each North American who decides to consume drugs does so individually and they are far and away the world's major consumers, but they are imposing this war on us, which did not belong to us, because of "Say's Law," which says "all supply creates its own demand" and which is now in the process of being totally reevaluated, as we are sure that for the consumption of drugs "all demand creates its own supply." From this point of view: if we managed to defeat drug trafficking and stopped being the world's leading producers, logically the business would be transferred to another country, probably in South America, because it is completely certain that they will continue being the world's major consumers and someone is going to produce drugs for them.
Peru, Mexico, Chile and Central America have free trade agreements with the U.S.A., which means that Colombia is automatically left at a disadvantage with the negation of our agreement. We asked ourselves: Have they made Peru, Mexico, Chile and Central America more deserving to gain admittance to the FTA? How many more deaths have these countries suffered in the war on drugs? What iron positions have they taken in defense of the American people? Which country, aside from Colombia, has been in the lead in restraining the expansionist plans of Hugo Chavez and his "Socialism of the 21st Century?" Perhaps they do not realize that we are their last friend in a region of enemies? Our people are not Bush's allies. Our people are allies of the American people! It is sad to see what they have done on the subject of the FTA. But, President Uribe already made clear that the relationship with the United States would be affected if the FTA is rejected, during a visit to Washington, he said that Colombia will not be part of "a relationship in which the United States is the master and Colombia is the slave".
Stephen Harper, Prime Minister of Canada, was incisive in saying: "If the United States gives it back to Colombia, the misfortune that we would suffer would be greater than that which no Latin American dictator could aspire to obtain." As for me, I totally share the main conclusion of the CATO Institute in the study in question: "To approve a free trade agreement with Colombia is to support a free market democracy in a region in which liberal values are in danger, it is being a reliable partner in turbulent times. To reject a free trade agreement with Colombia due to the persistent violence that country suffers would be an irresponsible error of the Congress. It would imply sacrificing our national interest in a stable hemisphere and prosperous Pacific in favor of ideological interests and partisan shortcomings of perspective".
The saying is that everything has "the color of the glass" through which it is viewed. Today, with the freezing of the FTA in the North American Congress this popular saying is more valid than ever because each one of the players in the process has an extreme opinion on the subject, pitifully they have used Colombia as the first victim of the North American electoral process. Today we can say that the FTA is dying. And lamentably Colombia really needs it.
What moves Colombia to look with despair for the approval of the FTA? With things being as they are, is the United States sending a negative message to Colombia?
Mary Anastasia O'Grady, Editor of the Wall Street Journal's "Americas" column, at the end of 2007 presented us with a revealing interview with Luis Guillermo Plata, Colombia's Minister of Commerce, Industry and Tourism. In this interview the excellent Colombian Minister instructs us on the Irish model and on how the government's team has outlined this course for Colombia. Let's take a look:
Luis Guillermo Plata spoke about the transformation of the Irish economy, of how it passed from being "the poor ugly duckling to the beautiful swan of Europe in just two decades," and how a "similar model of growth is just what Colombia needs".
The minister said to Mrs. O'Grady: ". . . We began traveling to Ireland years ago, because we were looking at those countries in the world that have been successful in attracting direct foreign investment. What we discovered was that Ireland reduced its corporate taxes from 40% to 12.5% and as a result began attracting investment; it had reduced the advantage of tax evasion and incremented tax collections. We returned to Colombia and we said "why should we not reduce (our corporate taxes) from 38% to 12.5%?
Mrs. O'Grady continues: "In a perfect world, he would have obtained a fixed corporate rate. But he had to arrive at compromises and, in its place, the "singular free enterprise zone" was what he got. The initiative extends the low tax rate to companies located within the "free zone," usually an industrial park, to any company that fulfills certain investment criteria. Companies -- excluding those involved in mining and petroleum -- who qualify by fulfilling the minimum investment objectives and commit themselves to fulfilling certain employment goals will then pay a fixed tax of 15% instead of 33%. Also, they import all raw materials without tariffs and they do not pay the value added tax. Besides offering these tax advantages, the government is doing "stability contracts" to guarantee that the rules of the game are not going to change with the next president. They are also working to reduce the regulatory load, since bureaucratic obstacles are one of the most common complaints of foreign investors."
The Minister contributes this important reflection: "In 2006, American official aid for development, destined to alleviate poverty in the world, was US $23.5 billion and was a waste of money. That is because development requires economic liberalization, and the leaders of the poor countries have few incentives to disturb the status quo of monopolies and protectionism that placed them in power . . . Colombia appears on this scene with a leader, President Alvaro Uribe, who is prepared to risk political capital to open domestic markets, to trim taxes and to push competition ahead on a track to fast growth in the Irish style." "The only thing that his government requests of Washington is bilateral commerce," the journalist finishes.
The FTA, Minister Plata asserted, is as important for the growth of Colombia as entrance to the European Union had been for Ireland: "That is the reason for which the FTA is so important . . . companies that invest in Colombia are looking beyond the domestic market and the recent dispute with Venezuela in which President Hugo Chavez threatened the closing of the border demonstrates the fragility of the Colombian export market. Around half of Colombian exports at the moment go to Venezuela and Ecuador. Having access to the American market and duty free imports originating in the U.S.A. are crucial questions for producers." It cannot be seen more clearly, this is "the color of the glass." We truly need this treaty.
We return to Daniel T. Griswold and Juan Carlos Hidalgo, the CATO Institute researchers, who with sufficient arguments demonstrated to us the benefits that the United States would obtain with the FTA: "The Free Trade Agreement with Colombia is designed to strengthen the civil society of Colombia and, at the same time, to generate economic opportunities so that U.S. producers sell their products to 44 million Colombian consumers, who would enjoy an upward mobility and would have a positive view of the United States. Like other similar treaties the United States already negotiated in the region, this one would demolish barriers to American exports. More than 80% of U.S. exports to Colombia are of products destined for industry that would become duty free to those consumers if the treaty were promulgated, and the remaining tariffs would be eliminated progressively throughout the next ten years. For agricultural producers of the United States, the FTA would allow duty free immediate access for high quality beef, cotton, wheat, soybean flour and most fruits and vegetables -- like apples, pears, peaches and cherries -- and many processed foods, like potato chips and crackers. The treaty would improve the sale of exports of pork, beef, corn, fowl, rice and dairy products".
But the benefits do not end there: In addition, "The FTA would strengthen protection of investments of American companies who are trying to reach Colombian consumers by means of a direct presence. The treaty would guarantee the nondiscriminatory rights to U.S. companies in their presentation of bids to obtain contracts with a great variety of ministries, governmental bodies, and regional governments of Colombia, as well as better access for American suppliers of telecommunications services. This FTA surpasses other bilateral treaties in order to satisfy the ever changing demands of the critics of trade treaties concerning the fulfillment of certain labor and environmental norms within Colombia".
"A study made in December of 2006 by the International Trade Commission of the United States considered that the treaty would increase American exports by 1.1 billion dollars. Since Colombian exporters already enjoy a virtually duty free access to the market of the United States, a trade treaty would allow the equality of conditions that trade skeptics do not cease demanding . . . Because U.S. tariffs already are low or null for the majority of imports originating in Colombia, the treaty would not have to generate the opposition of local special interests. . ."
". . . Bilateral trade between Colombia and the United States grew to 15.9 billion dollars in 2006 and is on track to surpass 17 billion in 2007. This value is similar to the bilateral trade with Chile, another country with whom a FTA exists, and almost double the trade with Peru, which became a trade associate in 2007." The truth, I think, is that we only can find ourselves in this situation for reasons of squalid political motivations, lamentably they chose us, the country that least deserves this treatment.
Well now, in a zone plagued by populist governments, with a leader who has won a place for himself thanks to an expansionist eagerness patronized with petrodollars, we do not understand how the United States would try to throw away Colombia, which is the only country that has put up a defensive wall against the growth of this socialist and anti-North American fever. What an unfortunate message this is sending to the region! With respect to this matter our friends at the CATO Institute pronounce themselves: "The importance of Colombia has grown in the last few years owing to the ideological battle that we are waging in the Andean region. With the coming to power of presidents of the populist left in South America, President Uribe represents the closest ally of the United States in Latin America".
Yes, Bush is totally right when he says: [ Colombia is ] "a friend of the United States who faces violence and terror, and fights against narcotics traffickers," that is certain, because a serious North American problem that we have faced bravely is drug trafficking. It is estimated that 90% of powdered cocaine that is consumed in the United States comes from Colombia. This represents a multimillion dollar business that illegal armed groups have been exploiting for more than one decade, and we have paid for it with deaths.
Compared with the United States, Colombia has compiled a relatively recent gangster history and we were released into the front lines of the war on narcotics trafficking very rapidly, it could be said from the murder of Minister Lara Bonilla. Whatever tragedies have followed from that time, however many dead we have put away since then, however many generations of the young have been failed, whatever territorial wars we have had to overcome on account of armed groups fed by drug trafficking, it is all fed on an unbridled consumption in the "developed world".
Each North American who decides to consume drugs does so individually and they are far and away the world's major consumers, but they are imposing this war on us, which did not belong to us, because of "Say's Law," which says "all supply creates its own demand" and which is now in the process of being totally reevaluated, as we are sure that for the consumption of drugs "all demand creates its own supply." From this point of view: if we managed to defeat drug trafficking and stopped being the world's leading producers, logically the business would be transferred to another country, probably in South America, because it is completely certain that they will continue being the world's major consumers and someone is going to produce drugs for them.
Peru, Mexico, Chile and Central America have free trade agreements with the U.S.A., which means that Colombia is automatically left at a disadvantage with the negation of our agreement. We asked ourselves: Have they made Peru, Mexico, Chile and Central America more deserving to gain admittance to the FTA? How many more deaths have these countries suffered in the war on drugs? What iron positions have they taken in defense of the American people? Which country, aside from Colombia, has been in the lead in restraining the expansionist plans of Hugo Chavez and his "Socialism of the 21st Century?" Perhaps they do not realize that we are their last friend in a region of enemies? Our people are not Bush's allies. Our people are allies of the American people! It is sad to see what they have done on the subject of the FTA. But, President Uribe already made clear that the relationship with the United States would be affected if the FTA is rejected, during a visit to Washington, he said that Colombia will not be part of "a relationship in which the United States is the master and Colombia is the slave".
Stephen Harper, Prime Minister of Canada, was incisive in saying: "If the United States gives it back to Colombia, the misfortune that we would suffer would be greater than that which no Latin American dictator could aspire to obtain." As for me, I totally share the main conclusion of the CATO Institute in the study in question: "To approve a free trade agreement with Colombia is to support a free market democracy in a region in which liberal values are in danger, it is being a reliable partner in turbulent times. To reject a free trade agreement with Colombia due to the persistent violence that country suffers would be an irresponsible error of the Congress. It would imply sacrificing our national interest in a stable hemisphere and prosperous Pacific in favor of ideological interests and partisan shortcomings of perspective".
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