US accepts revision of free trade treaty with Colombia The Colombian government.
Governments of Colombia and the United States will negotiate revisions to their controversial “free” trade agreement, the trade minister announced on Tuesday.
According to Colombia’s ambassador in Washington DC, Luis Gilberto Murillo bilateral talks on possible changes to the “US-Colombia Free Trade Pact” (FTA) are scheduled for May.
Murillo stated on December 1st that his administration , headed by President Gustavo Petro, has been talking with various organizations about revising the treaty of 2012 following his inauguration in August of last year.
At the same time, the government enlisted more than fifty regional groups in the creation of the economic growth strategy which is scheduled to go to Congress next month.
The Trade Minister German Umana stated that the government does not intend to “renegotiate” the FTA, instead, it is negotiating positive and mutually advantageous “adjustments” in “friendly talks.”
The free trade war has been a disaster for the world.
The so-called trade talks resulted from massive criticisms of the FTA and was then followed by a drop of 50% on exports made to the US which were expected to gain from the agreement.
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The US Congressional Research Service (USCRS) stated in May of last year that the agreement was expected to “increase foreign direct investment in Colombia,” but this did not happen.
In actual fact, American investment dropped from $2.2 billion in 2011 to $1.9 billion in 2021 according to the central bank.
The FTA as well as the farmers of Colombia.
The FTA is especially hated in rural areas where farmers aren’t able to be competitive with American imports of food due to the lack of infrastructure and American subsidies for agriculture.
The USCRS confirmed that 200,000 farmers protested in 2013 when they discovered themselves being displaced by large agricultural-industrial corporations.
In advance of the agreement, the Colombian Agriculture Ministry warned that the removal of tariffs on staple crops may force the farmers “migration to the cities or other countries (especially the United States), working in drug cultivation zones, or affiliating with illegal armed groups.”
Between the years 2011-2021, the amount of land used to cultivate coca was up 219% while Colombia’s cocaine exports could go up by 569%, according to figures from the National Police and the United Nations’ Office on Drugs and Crime reveal.
Statistics from the government also reveal that American businesses in 2012 transferred over $30 billion in Colombia for items that, as per DANE the DANE, were never exported.
An ex- US prosecutor in 2020 confirmed the fact that “the illegal drug trade depends on shadow financial networks to move drug traffickers’ profits into our banking system and across our borders.”
Although evidence suggests that the FTA damaged Colombia’s agriculture and helped boost coca exports into the US, the US and Bogota have no plans to renegotiate it. Washington DC nor Bogota want to negotiate a new FTA.
The interesting thing is that the agreement also granted American corporations to increase their exports to Colombia by more than 47% from 2011, as per the US Census Bureau.
Colombian President Petro is in need of the US trade agreement and the support of his American partner Joe Biden in order to carry out the National Development Plan (PND) that aims to reverse the negative FTA consequences.
Murillo is lobbying Washington DC to hold FTA talks before the end of May, since this is the deadline for the Colombian Congress due date to vote on the PND.
What is the PND
The National Development Plan is arguably the most significant proposal of any Colombian government when it sets the socio-economic plan for the next four years. Petro’s PND is particularly ambitious as it contains an extensive economic reform plan that aims to stop the armed conflict in Colombia by promoting economic development in areas that have been devastated by violence for years.
The government claims that the proposed PND was created with the help of over 50 communities in the rural areas who are most affected by violence and organized criminality. They are generally the most dissatisfied with the FTA in claiming that the deal primarily benefited American corporations, but with the intention of promoting peace and development in Colombia’s rural areas.
Petro’s PND is especially ambitious as it is seeking to invest in the economy in such a manner that allows rural communities to be able to participate in the legal market instead of the illicit economy which is mostly based on mining that is illegal.
To accomplish this, the government is planning to build an impractical trade network that will increase domestic consumption, the creation of new jobs, and boost Colombia’s position in the global marketplace.
The economic growth, Petro claims, would enable Colombia to gradually be less economically dependent from fluctuations in the mining and oil industry, while also preserving its natural resources as well as its water supply.
Petro’s economic reform proposal is reminiscent of ideas previously made by international organizations like that of the United Nations, the International Monetary Fund and the World Bank.
The government’s ambitious plans were made in the midst of a massive economic instability due to an anticipated COVID pandemic, as well as the war in Europe that began in the early part of this year.
This has led to a dramatic rise in inflation in Colombia and caused an enormous decline in the peso’s value and has accelerated inflation through 2022.
In addition the illegal armed groups over the many years have stepped up their ability to undermine economic development both in urban and rural areas and undermine the State.
As per the President the negotiations to eliminate these criminal structures and his economic development plan could reduce the risk.
It’s not a certainty However, it is not guaranteed. At numerous times throughout Colombia’s history, peace efforts were a factor in weakening the country.