Response to a USTR request for comments regarding an FTA between the USA and Colombia

September 15, 2009

Ms. Carmen Suro-Bredie
Chairman, Trade Policy Staff Committee
Office of the U.S. Trade Representative (USTR)
Washington, D.C.

Via Electronic Submission

RE: Request for Comments Concerning Free Trade Agreement With the Republic of Colombia, Docket # USTR-2009-0021

Dear Ms. Suro-Bredie:

I am writing to you on behalf of about 600 families with whom the foundation I direct works. Some of these families have been displaced by violence, mainly from land areas that are suitable for export agriculture such as banana and palm. Other families have been left without work as industrial plants in their towns closed due to import liberalization, as the Colombian government adopted free-trade policies advocated, and sometimes required, by international lending agencies.

When the FTA between Colombia and the USA was placed for public scrutiny, I could not find much difference with NAFTA, vis-à-vis Mexico, an economy as different from the US economy as the Colombian economy can be. What is most striking in both, the COL-USA FTA and NAFTA, is the asymmetry between trade in agriculture and trade in manufactures, in particular manufactures that are crucial for public health such as pharmaceuticals and for job creation such as auto parts. Mexico signed NAFTA in the belief that small farmers displaced by US imports of cereals would become a middle-class industrial labor force, as the country would specialize in “maquilla” operations along the US border. Today the Mexican unemployment is such that those former small farmers and would-be middle class workers cannot seek a living by any other means than crossing illegally the US border to try to find temporary jobs in the US economy. Further, the corn that these farmers produced, which is genetically different in almost every county in Mexico, is no longer there, diminishing the world’s largest natural genetic bank of corn seed and, thus, lowering food safety due to eventual corn disease in the Americas.

Just as the Mexican economy did in the ten years previous to the signing of the NAFTA, the Colombian economy has been adjusting to the new trade rules and has begun to lower tariffs on agricultural products from the US. As a result, Colombia already has seen a decline in crucial agricultural economic activity, including cereals and cotton. In the case of cotton, from over 25,000 farmers producing over 100,000 tons of fiber sufficient to cover the needs of the domestic industry, Colombian cotton farmers today number about 6,000 and cover a third of the domestic needs. It is evident that Colombia cannot compete with the subsidies the US Treasury provides to its farmers. While cotton and cereals are heavily subsidized in the USA, in Colombia, the government does not have the public funds to do so, as the resources of the Colombian Treasury are not comparable to those of the US and other needs must be financed. This is the same case as Mexico, where domestic cotton and corn production has greatly declined.

Between the 1960s and the 1990s, Colombia proudly developed a back-to-back auto industry that managed to supply domestic needs and provided jobs to hundreds of thousands. Today, the industry mostly assembles kits and refurbishes auto parts. The COL-US FTA provisions on auto parts would eliminate refurbishing, a substantial part of the industry in Colombia today.

The United States and Colombia have developed, over the years, close commercial ties and these hopefully will continue to strengthen. Colombia has supplied agricultural and mineral commodities to the US economy, while the US economy had provided Colombia with industrial and light manufactures we do not produce, as well as with know-how in the form of strategic foreign investment. Some strategic trade is always good for any economy. However, trade rules should be tailored to meet today’s global and national challenges. This is not the case of the proposed COL-US FTA.  A 2008 report by FAO on Global Food Insecurity suggests that most of the over one billion people on the planet living with severe hunger and malnutrition are small farmers just like those being displaced in Colombia to make room for agricultural export production. The FAO report proposes to focus on providing small farmers in developing countries like Colombia with the knowledge and means to produce for domestic markets in order to improve food security. Further, a recent report by Agroscope, a research institute under the government of Switzerland, suggests that imports of agricultural products that can be produced in a country might be harming the climate of the planet as they need to be transported for long stretches and increase global warming.

For the reasons above, I ask the two governments to rethink the commercial ties between the US and Colombia in a form different from the currently proposed FTA.

Sincerely,

Carlos Alberto Valderrama Becerra
President
Fundación País Futuro
Bogotá, Colombia