The U.S.-Colombia Free Trade Agreement: Background and Issues

Posted on November 25, 2012 • Filed under: Business, Colombia, Economy, Police/Military Activity, Politics, United States

The U.S.-Colombia Trade Promotion Agreement entered into force on May 15, 2012. It is a
comprehensive free trade agreement (FTA) between the United States and Colombia, which will
eventually eliminate tariffs and other barriers in bilateral trade in goods and services. On October
3, 2011, President Barack Obama submitted draft legislation (H.R. 3078/S. 1641) to both houses
of Congress to implement the agreement. On October 12, 2011, the House passed H.R. 3078
(262-167) and sent it to the Senate. The Senate passed the implementing legislation (66-33) on
the same day. The agreement was signed by both countries almost five years earlier, on
November 22, 2006. The Colombian Congress approved it in June 2007 and again in October
2007, after it was modified to include new provisions agreed to in the May 10, 2007 bipartisan
understanding between congressional leadership and President George W. Bush.
The United States is Colombia’s leading trade partner. Colombia accounts for a very small
percentage of U.S. trade (1.0% in 2011), ranking 22nd among U.S. export markets and 23rd as a
supplier of U.S. imports. Economic studies on the impact of a U.S.-Colombia free trade
agreement (FTA) have found that, upon full implementation of an agreement, the impact on the
United States would be positive but very small due to the small size of the Colombian economy
when compared to that of the United States (about 2.2%).
The congressional debate surrounding the CFTA mostly centered on violence, labor, and human
rights issues in Colombia. Numerous Members of Congress opposed passage of the agreement
because of concerns about alleged targeted violence against union members in Colombia,
inadequate efforts to bring perpetrators to justice, and weak protection of worker rights. However,
other Members of Congress supported the CFTA and took issue with these charges, stating that
Colombia had made great progress over the last ten years to curb violence and enhance security.
They also argued that U.S. exporters were losing market share of the Colombian market and that
the agreement would open the Colombian market for U.S. goods and services. For Colombia, an
FTA with the United States has been part of its overall economic development strategy.
To address the concerns related to labor rights and violence in Colombia, the United States and
Colombia agreed upon an “Action Plan Related to Labor Rights” that included specific and
concrete steps, with specific timelines, most of which took place in 2011. It includes numerous
commitments by the Colombian government to protect union members, end impunity, and
improve worker rights. The Colombian government submitted documents to the United States in
time to meet various target dates listed in the Action Plan. The USTR reviewed the documents
and determined that Colombia had met its major commitments.
The U.S. business community generally supports the FTA with Colombia because it sees it as an
opportunity to increase U.S. exports to Colombia. U.S. exporters urged policymakers to move
forward with the agreement, arguing that the United States was losing market share of the
Colombian market, especially in agriculture, as Colombia entered into FTAs with other countries.
Colombia’s FTA with Canada, which was implemented on August 15, 2011, was of particular
concern for U.S. agricultural producers. Critics of the agreement expressed concerns about
violence against union members and the lack of protection of worker rights in Colombia,
especially in labor cooperatives. Labor unions in general remain highly opposed to the
agreement. They argue that Colombia’s labor movement is under attack through violence,
intimidation, and harassment, as well as legal challenges. Read Report PDF

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