Is Every Free TradeAgreement Bad?

If the signing of all free trade agreements were detrimental to the interests of a state, the large majority of countries would not sign them. Nevertheless, the list of nations that view this mechanism as an alternative to promote economic growth, increase foreign investment and generate greater employment is getting longer all the time.

A few days ago the free trade agreement between Colombia and the United States came into effect. According to Sergio Diaz-Granados, Colombia’s current minister of commerce, industry and tourism, the aforementioned agreement is expected to triple non-mining exports from Colombia in the next 10 years. “It will be one of the principal factors for economic growth and the generation of jobs,” he asserted.

Also, in addition to the privileged geographic position, the enforcement of the FTA will provide an incentive for increased foreign investment. Unlike Ecuador, which in 2011 received $560 million in foreign direct investment, the investment in Colombia was only $13 billion, or about 26 times less than Ecuador. With the enforcement of the FTA, this figure will increase significantly. The principal beneficiary of this agreement will be the “Pymes” (or, small- and medium-sized businesses). According to the Colombian government, around 1.2 million people will have access to cheaper machinery and raw material.

Whether we like it or not, the United States continues to be one of the most important economies in the world. It is home to 310 million consumers, a gross domestic product greater than $14.6 billion and a GDP per capita of $47,400.

Despite this, Ecuador continues to be trapped in a dilemma: It views every free trade agreement as bad. If this were true, many countries would not enter into them. Ecuador’s ideological bias and lack of critical capacity do not permit it to see further. It is true that an FTA is not simply a commercial instrument. It can be turned into a weapon of interference, with some states exercising dominance over others. Because of this, the fundamental issue is to be conscious of these possibilities, to negotiate with extreme care and to do so well. What are at stake are the lofty interests of a nation.

This is what the United States and other powers do. However, let me clarify: We must do what the great powers do and not what they want us to do.

For this reason, it is not about signing trade agreements just to do so. Colombia and Peru did it, so we’ll do it, too. No! The benefits of signing an agreement have to be very clear: how much we stand to gain, who will be the advantaged and disadvantaged, etc. That is what our authorities should keep in mind, not only in the possible signing of an FTA with the European Union, but also with the United States and other nations.