The Colombian and US governments will negotiate amendments to the controversial “free” trade agreement, the trade minister confirmed on Tuesday.
According to Colombia’s Ambassador to Washington, DC, Luis Gilberto Murillo, bilateral talks are scheduled for May on possible amendments to the so-called “US-Colombia Free Trade Agreement” (FTA).
Murillo said in December that President Gustavo Petro’s government was in talks with various bodies about modifying the 2012 treaty process after he took office last August.
During the same period, the government involved more than 50 regional organizations in formulating an economic development plan that will be submitted to parliament next month.
Trade Minister German Umanya emphasized that the government is not aiming to “renegotiate” the FTA but to negotiate mutually beneficial “adjustments” in “friendly negotiations”.
The allegedly planned trade negotiations were the result of widespread criticism of the FTA, after which a 50% drop in exports to the US, which would have benefited from the deal.
Export to USA
The US Congressional Research Service (USCRS) said last May that the treaty was also expected to “increase foreign direct investment in Colombia,” but that did not materialize.
In fact, US investment has fallen from $2.2 billion in 2011 to $1.9 billion in 2021, according to the central bank.
Colombian farmers say domestic food production will be jeopardized when government removes import tariffs
FTAs are particularly frowned upon in rural areas where farmers cannot compete with US food imports due to lack of infrastructure and US subsidies for agriculture.
USCRS confirmed that about 200,000 farmers rose to their feet in 2013 after realizing they were displaced by major agricultural and industrial companies.
Ahead of the treaty, Colombia’s agriculture ministry said eliminating tariffs on staple crops would force farmers to “move to cities or other countries (particularly the United States), work in drug-growing areas, or join illegal armed groups.” ” warned that it may be forced to do so.
Between 2011 and 2021, agricultural land used to grow coca increased by 219% and Colombia’s potential cocaine exports increased by 569%, according to National Police and United Nations Office on Drugs and Crime statistics. increase.
Since 2012, US companies have remitted more than $30 billion to Colombia, according to government statistics, and according to DANE, none of it has been exported.
A former U.S. prosecutor confirmed in 2020 that “the illicit drug trade relies on shadow financial networks that move drug traffickers’ profits across banking systems and borders.”
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Neither Washington, D.C. nor Bogota wants to renegotiate the FTA, despite evidence that it has destroyed Colombia’s agricultural sector and boosted cocaine exports to the United States.
The thing is, the deal also allowed American companies to increase their exports to Colombia by more than 47% since 2011, according to the U.S. Census Bureau.
Colombian President Petro Petro needs a US trade deal and his US counterpart Joe Biden to implement his National Development Plan (PND) that seeks to reverse the negative effects of FTAs. .
We are not conducting renegotiations, we are conducting friendly conversations with our partners on the terms that each chapter of the Free Trade Agreement discusses to improve the terms of our two countries… trade And investing is more transparent, agile and convenient.
Trade Minister German Umanja
Murillo is lobbying for FTA negotiations in Washington DC by the end of May. Because this is the deadline for the Colombian Congress to approve his PND.
What is PND
The National Development Plan is arguably the most important proposal for any Colombian government, as it sets the socio-economic strategy for the next four years. His PND of Petro is particularly ambitious. It includes radical economic reforms that seek to end Colombia’s armed conflict through economic development in a region ravaged by decades of violence. His pending PND was formulated with input from more than 50 rural communities most affected by armed conflict and organized crime, according to the government. These communities are generally the most critical of his FTA, arguing that the trade agreement has greatly contributed to American corporate profits at the expense of economic development and peace in the Colombian countryside.
Petro’s PND is particularly ambitious. Because we want to invest in the economy in a way that allows rural communities to participate in the legal economy, rather than an illegal economy that thrives primarily on drug trafficking and illegal mining.
To achieve this, the government wants to build improvised trade networks that will boost domestic consumption, create jobs and improve Colombia’s competitiveness in the world market.
Petro argues that this economic development will allow Colombia to become economically independent of booms and busts in the oil and mining industries and to maintain the country’s natural resources and water supply.
The economic reforms proposed by the Petro mirror previous proposals made by international organizations such as the United Nations, the International Monetary Fund and the World Bank.
IMF urges Colombia to diversify economy while searching for oil
The government’s ambitious proposal comes amid extraordinary economic upheaval caused by the 2020 COVID pandemic and the war in Europe that began early last year.
This caused inflation in Colombia to spike, triggering a significant devaluation of the peso, and inflation spiked throughout 2022.
Moreover, over the years illegal armed groups have expanded their ability to impede economic development and undermine the state, both in cities and in the countryside.
The president said the negotiated dismantling of these criminal gangs, combined with his economic development plans, would mitigate this risk.
However, this is almost certain. Many times in Colombia’s history, failures in peace efforts have further destabilized the country.