At Last, a Free Trade Agreement

With the announcement of the U.S. Congress’s passage of the Free Trade Agreement, the most important hurdle has been cleared, in a process that is of the utmost importance for Colombia’s entry into international markets and for our future.

Beyond the direct and indirect effects that can be attributed to the FTA, its significance lies in its value as an unmistakable symbol for Colombians in general — and our manufacturing sector in particular — and for all our trading partners of our country’s political will to enter the global marketplace.

It is no panacea, and we can assume that there will be effected sectors which, as Tuesday’s editorial pointed out, should not be abandoned in the crafting of a domestic policy which is overdue. Still, the decision to enter into the FTA withe the U.S. is of the utmost importance as it sends a credible and forceful signal to our manufacturers that they must become more efficient. The FTA also establishes a stable framework for them to access the largest market in the world for their products, commodities and capital goods. It also benefits consumers, by offering them a greater variety and quality of goods and services. But perhaps the most important thing is that it will help ensure that future treaties encounter less resistance — foreign and domestic — as has occurred in Chile, Mexico and Peru.

We knew that getting the treaty passed was not going to be easy, and it wasn’t. The process of trade liberalization produces redistributive effects — at least in the short and medium term — and meets an opposition in every country in the world. In democracies such as Colombia and the U.S., the opposition is — and should be — represented in Congress, so the process of building consensus takes some time, depending on the specific circumstances of the nations involved.

It is therefore natural and right that there are those who oppose the treaty and continue to question it, emphasizing its negative effects, which are certainly real. But it is useful to keep in mind that Colombia is not the first developing country to sign an FTA with the United States. Mexico and Chile did so more than 15 years ago, and today they have the highest living standards in Latin America. Peru, which passed one more recently, has had in the last few years one of the highest economic growth rates in the continent and is today one of the most promising countries in the region — assuming that the presidency of Ollanta Humala does not reverse the trend.

Our treaty was formally initiated, negotiated and signed by Colombia during Alvaro Uribe’s administration, and passed by the United States during Juan Manuel Santos’ administration. Although no trade agreement is perfect, one must recognize the role that both have played in achieving its passage, surmounting the difficulties and stumbling blocks imposed by a vigorous and highly complex democratic process with patience, prudence and perseverance.

Many challenges remain. We must take advantage of any opportunity to consolidate, deepen and simplify the treaties that we have with countries of the Americas and Europe, and focus our energies on the treaties with Asia, Australia, New Zealand and South Africa. Likewise, it is important to allow some time for the FTA’s effects to be felt across the Colombian economy, to monitor those effects carefully, and take measures to mitigate the costs of adjustment, if necessary and appropriate.