Reading Der Spiegel’s recent interview with Colombia President Juan Manuel Santos, we were reminded of the cliched reaction we often encountered in Germany in the 1980s whenever Chicago came up in conversations with the older generation: “Chicago? Gangsters! Al Capone! Bang, bang.”

Now, it’s Der Spiegel unsophisticated take, “Colombia? Drug cartels! Medellin! Bang, bang!”

Santos, who makes a state visit to Berlin on Wednesday, managed to correct the interviewer’s preconceptions and errors to make the case for Colombia as a business partner.

Santos: Europe would be well advised to pay more attention to Latin America. The emerging economies are the engines of the global economy. Colombia has done too little to improve its reputation in Europe. We recently negotiated a free trade agreement with the European Union, and now trade will flourish.

SPIEGEL: That is what you hope …

Santos: Yes, but there is also a reason for that. Our population is primarily young, and more and more poor people are entering the middle class. This is a market of millions of potential consumers.

SPIEGEL: Which investors from Germany would you like to see?

Santos : German high-tech companies that invest in biotechnology, for example. Colombia has a huge variety of plant and animal species, and we have enormous potential. Small and mid-sized companies should come to Colombia. From here, they have access to the entire Latin American market. Besides, Germany could help us improve our education system.

Negotiators with the European Union and Colombia signed the final texts of the Free Trade Agreements last month.

El Tiempo: Obama-Santos agreement on FTA, with 4 key points

Washington Post editorial, “Mr. Obama’s free-trade deal with Colombia“:

PRESIDENT OBAMA will welcome a bruised American ally to the White House on Thursday and take a step toward mending relations. For the past decade, Colombia has been a strong and steady U.S. friend at a time when leftist demagogues — including the presidents of two of its neighbors — have dedicated themselves to turning Latin America against the United States. Colombia’s reward was to be vilified by labor unions intent on torpedoing the free-trade agreement that it negotiated with the Bush administration and that has been neglected by Mr. Obama, who skipped Colombia during his recent tour of the region.

Mr. Obama’s agreement with Colombian President Juan Manuel Santos on an “action plan” for obtaining congressional ratification of the free-trade agreement could augur both a political and a foreign policy breakthrough for his administration. Mr. Obama, who will endorse the deal just days after launching his reelection campaign, gets points for political bravery: Though Colombia made substantial concessions to win the White House’s support, the pact will still be opposed by most unions and many Democratic members of Congress.

Bravery belated, perhaps, but very good in any case. As for the unions and anti-trade members of Congress, one doubts there would ever be a possible “compromise” that would lead them to support an agreement. Protectionism is a matter of core philosophy.

Rep. Steny Hoyer (D-MD), the House Democratic whip, issued a statement lauding the developments.

Today’s development on issues of worker rights and violence against workers is a positive and important step towards passage of the Colombia FTA. These issues needed to be addressed, and I am pleased the Administration and Colombian government have agreed to a concrete action plan. Colombia is a key ally in South America, and it is in our economic and national security interests to further strengthen that relationship. I look forward to working with the Administration to advance the Colombia FTA, which I continue to support. As we work to enact the three pending trade agreements, we must also extend expired provisions of the Trade Adjustment Assistance program that help American workers who have lost their jobs as a result of trade.”

Rep. Hoyer has been a clear and consistent supporter for many years, which also warrants mention as political bravery.

Of course, we knew about these benefits several years ago, back when the agreement between the two countries was first negotiated and concluded.

From the White House Fact Sheet:

The Agreement will remove significant barriers to U.S. goods from entering Colombia’s market:

• Over 80 percent of U.S. exports of consumer and industrial products to Colombia will become duty free immediately, with remaining tariffs phased out over 10 years. With average tariffs on U.S. industrial exports ranging from 7.4 to 14.6 percent, this will substantially increase U.S. exports.
• Key U.S. exports will gain immediate duty-free access to Colombia, including almost all products in these sectors: agriculture and construction equipment, aircraft and parts, auto parts, fertilizers and agro-chemicals, information technology equipment, medical and scientific equipment, and wood.

And, on IPR:

Greater Protection for Intellectual Property Rights: The Agreement provides for improved standards for the protection and enforcement of a broad range of intellectual property rights, consistent with U.S. and emerging international standards of protection and enforcement. Such improvements include requirements for IPR protections that are critical to protecting copyrighted works like music, movies, and software from piracy in the digital environment; requirements for strong, deterrent criminal penalties against copyright piracy and trademark counterfeiting; requirements for robust patent and test data protection that respects the Doha Declaration on TRIPS and Public Health; and state-of-the-art protection for U.S. trademarks.

And …

Unfortunately, however, not for us, but for our competition.

Today’s EU Trade News – weekly digest contained the following headline story about initialing the European Union’s free trade agreement with Colombia:

Trade agreement between the EU and Colombia & Peru
Chief negotiators of the European Commission, Peru and Colombia met in Brussels on 23 and 24 March to initial the final texts of an ambitious trade deal. The Free Trade Agreement will inaugurate a new framework of bilateral trade and investment relations between the European Union and these Andean countries. The initialing will be followed by translation, signature and adoption of this agreement so that it can enter into force as soon as possible for all parties

When the EU agreement goes into effect, European manufacturers will see their products’ prices fall 15 percent in the Colombian market compared to U.S. products.  If you walked into a store and saw two comparable products side-by-side with the major difference being one was 15 percent less expensive than the other, what would you do?  And that’s just what Colombian customers will do as well.

In the meantime, as another month passes as we move from March to April, organized labor’s mistaken opposition to the Colombian trade agreement has taken another $46 million of lost wages and benefits out of the pockets of American workers.¹

Frank Vargo is vice president, international economic affairs, for the National Association of Manufacturers.

¹The International Trade Commission estimates the Colombian agreement would generate at least $1.1 billion in new U.S. exports annually. The Commerce Department estimates that each $1 billion of exports supports about 6,700 U.S. jobs, so $1.1 billion of exports supports 7,370 jobs. Most of these jobs would be in manufacturing, where the average employee earns $75,500 annually. That works out to $550 million dollars in lost wages and benefits per year — $46 million per month.

Noted journalist, author and Latin America hand Andres Oppenheimer writes a worrisome but justified column in The Miami Herald, “Colombia takes a step back from U.S.“:

Colombia’s right-of-center President Juan Manuel Santos may have been kidding when he recently said that radical leftist Venezuelan President Hugo Chávez is his “new best friend,” but few in Washington are laughing.

There is a growing feeling in the U.S. capital — especially in Congress — that Santos is moving closer to Chávez, and shifting away from Colombia’s close alliance with the United States over the past eight years.

Oppenheimer quotes Enrique Santos Calderon, the president’s brother and a long-time El Tiempo columnist, who says Colombians are disillusioned with the United States, adding, “There is a feeling that we need to take some distance, and stop making unilateral favors that are not reciprocated.”

At The Wall Street Journal, Mary Anastasia O’Grady takes the Obama Administration to task for its inaction on the long-pending U.S.-Colombia Free Trade Agreement in a column, “Obama’s Trade Contortions.” In effect, the Administration has given Big Labor a veto over trade agreements, while embracing a neo-mercantalism that embraces exports but not trade. Neverthless, O’Grady writes: (continue reading…)

The National Association of Manufacturers’ Doug Goudie has been reporting from his travels on  a business and trade mission to South Korea. Earlier posts: Day One, Day Two.

Looking north into North Korea from the South Korean side of the Demilitarized Zone. Photo: Doug Goudie

The focus of today’s meetings and trip makes me consider the national security aspect of the U.S.-Korea FTA. We have a unique and strong bond with Korea, having led the United Nations Joint Combined Forces that fought in the Korean War. After 1953, when the truce agreement was signed, the United States has remained in the Republic of Korea, jointly guaranteeing the peace and securing the nation alongside the ROK military.

I think about this because, for about 5 minutes today, I stood in North Korea. We visited the DMZ this morning, and each mile that brought us closer to the border reinforced how important the U.S.-Korea national security relationship is to both nations,and how the trade agreement is about more than just expanding commerce and removing trade barriers – it is also a sign of trust, mutual dependence and mutual appreciation.

I would be remiss in not noting -at least in passing – that among the 17 or so nations that make up the U.N. joint command still in operation at the DMZ is Colombia. Troops from Colombia fought in the Korean War, and Colombian officers still fill slots in the U.N. command at the DMZ, along with officers from Australia, New Zealand, Great Britain, Turkey and other nations.

For miles before you reach the border, you drive on a highway bordering the Han River, and you can’t help but notice the side of the road is blockaded by rolls of barbed wire and interspersed with guard houses. As you get closer to the DMZ, of course, security grows tighter until you need to be on an official escorted tour to proceed. But it is the fact that for miles and miles before the border – Seoul lies only 50 kilometers from North Korea, and is well within range of 20,000 artillery and missile tubes that could turn the city into rubble – you are reminded that North Korea has an army of 1.6 million, positioned mostly within 90 km of the border. This is a real and active threat – it is a far cry from the undefended borders of the EU or U.S.-Canada. And the United States has guaranteed the security of the border since 1953.

(continue reading…)

Our friend Stephen Lamar, executive vice president at the American Apparel and Footwear Association (an NAM-member association), passes on this telling photo and cogent critique of Congressional inaction on pending Free Trade Agreements.  It’s so good we’d thought we share it:

As the world’s attention stays riveted on South Africa to watch the World Cup and as we in your Nation’s Capitol look forward to Nationals pitching phenom Stephen Strasburg’s next start, our minds inevitably wander into sports.

I was recently shown this picture of the stadium and was told that this is a good metaphor for U.S. trade policy because it shows a level playing field. 

Perhaps it is a good metaphor for U.S. trade policy but for a lot more reasons.

 True, it is a level playing field, but…

….nobody is in the stands

….nobody is on the field (certainly the American team is missing)

….no referees are present (although recent US soccer history suggests this may not always be such a bad thing)

….it is impossible to score (there aren’t any goal posts – maybe, as some have argued, because they have been moved so much)

….the lines are so faint we aren’t even sure which game we are playing (although I suspect it may have recently been used for soccer).

Perhaps this is overly harsh.  But, while we have seen some encouraging signs on trade recently – the energy driving the National Export Initiative (NEI) is reassuring, Congress approved new Haiti preferences, and the TPP process seems fully underway – there are too many other flags on the field (although absent from the picture I know) that continue to raise concern.  The Misc Tariff Bill process has dragged on far too long with resolution uncertain. 

Absent a Hail Mary pass in a lame duck session this year, this Congress will hold the distinction as being the first one to not approve a free trade agreement this century, even though there are three perfectly good ones (Colombia, Korea, and Panama)  sitting on the benches (again, no benches, I know.  Judging by the speed with which Canada and the EU, among others, are negotiating, completing, and approving trade agreements with those same countries, there seems to be a lot of activity in other stadiums.  

Colombia held its runoff election for president on Sunday, and voters gave 69 percent of the vote to Juan Manuel Santos, the 58-year old former defense minister who leadership helped bring the narco-terrorist guerilla war under control while strengthening protections for human rights. Santos campaigned on a free-market platform that promised a continuation of the economic policies of President Alvaro Uribe.The Wall Street Journal editorializes, “Colombia Speaks“:

This triumph also ought to echo in Washington, where Democrats in Congress and the White House continue to deny a vote on the U.S.-Colombia free trade agreement. One liberal Democratic excuse has been concerns about Mr. Uribe’s security policies, but Colombia’s people have now spoken.

Like Mr. Uribe, Mr. Santos wants the free trade deal to force his country to face the discipline of global competition and turn Colombia into the next Chile or Taiwan. Such progress would further reduce the FARC’s appeal, and it is certainly in the U.S. national interest. This one shouldn’t even be controversial.

The Washington Post also asks editorially, “Will Washington treat Colombia’s Santos as an ally?“

Ratification of the free-trade agreement would serve the administration’s stated goal of boosting U.S. exports while bolstering a nation that could be an anchor for democracy and political moderation in the region. It would also allow the administration and Congress to demonstrate that friends of the United States will be supported and not scorned in Washington.

From Secretary of State Hillary Clinton’s remarks Wednesday at the 40th Washington Conference on the Americas:

One, I see my friends from Colombia and Panama, and I hate seeing them, I have to be honest. (Laughter.) We are, as President Obama said, committed in the State of the Union to our free trade agreements with both countries, but we are also facing very difficult political challenges. But I am absolutely here to reiterate that commitment. Both Panama and Colombia have worked very hard to deal with some of the questions that were raised by this Administration and certainly by our Congress, and I think that we are going to pursue this. I can’t predict the outcome, but it is something that the President and I in particular feel strongly about. You’ll hear from U.S. Trade Representative Ron Kirk later in the program.

But our commitment to trade is one that we feel strongly about. We just have to deal with the political winds and we need more help from the private sector. We need more strong advocacy on behalf of the importance of trade and why it is good for the United States and American workers. My friends from Mexico, who will be here in great numbers next week, know that we have some challenges on that front as well. I don’t want to ignore that because we have some outstanding trade issues. But again, we are trying to work through those and bring those to resolution, and we’re very excited about President Calderon’s visit.

To win the lottery, you have to first buy a ticket. To lead, you have to stand firm against the political winds. And to enact a free trade agreement, you have to submit it to Congress. The votes are there to pass the Colombia and Peru FTAs.

The Secretary of State also says, “We need more strong advocacy on behalf of the importance of trade and why it is good for the United States and American workers.” From whom? Advocates for the free trade agreements are vocal, fervent, full of facts and good arguments. Shopfloor.org has published 144 separate posts on the Colombia and Panama FTAs. Some of those arguments were good!

On May 10, Senators John Kerry (D-MA) and Richard Lugar (R-IN), chairman and ranking member of the Senate Committee on Foreign Relations respectively, urged the Administration in a letter to move forward on the U.S.-Korea Free Trade Agreement.

The Senators highlighted the great missed opportunity inaction on this FTA represents and pointed out that our competitors are quick to take advantage.

Through inaction, the United States will cede Korea’s vast markets to other countries, a luxury that we cannot afford.  In 2004, China displaced the United States as Korea’s number one trading partner.  Recently, the European Union and India signed agreements with South Korea to lower trade barriers.  As these countries effectively gain preferential access compared to American products, the United States risks missing significant opportunities, while other countries’ economies grow and create jobs from trade expansion.

Shopfloor made this exact point yesterday and has long called for swift action on this, as well as the Colombia and Panama FTAs, that have languished in Congress for more than a year.

In his statement, Senator Kerry added, “This step could be a significant part of the President’s goal of doubling U.S. exports over the next five years to create well-paying American jobs.”

That won’t happen unless we open foreign markets to our goods and services.