Letter from The Latin America Trade Coalition urging Congress to approve the U.S.-Colombia Trade Promotion Agreement and the U.S-Panama Trade Promotion Agreement
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September 9, 2008
To The Members of the United States Congress:
The Latin America Trade Coalition —a broad-based group of more than 1,100 U.S. companies,
business and agricultural organizations, and chambers of commerce— urges Congress to approve the U.S.-Colombia Trade Promotion Agreement and the U.S-Panama Trade Promotion Agreement this year. These agreements are squarely in the economic and foreign policy interests of the United States, and failure to approve them this year will deny American workers, farmers and consumers real benefits and undermine efforts in Colombia and Panama to secure sustainable economic development.
U.S.-Colombia Trade Promotion Agreement
Colombia is the second largest Spanish-speaking country in the world, and U.S.-Colombia trade grew by 54% in the first six months of 2008 — faster than U.S. trade expanded with any other Latin American nation. More than 10,000 U.S. companies export their products to Colombia, and 85% of these are small and medium-sized companies that will benefit directly from the Colombia agreement.
Building on these strong ties, the Colombia agreement will do away with a trade relationship
built on temporary unilateral preferences and replace it with one that is mutually beneficial, reciprocal, and permanent. In 1991, Congress approved the Andean Trade Preference Act (ATPA), which has been renewed by bipartisan majorities several times in recent years. ATPA allows 93% of all imports from Colombia to enter the U.S. market duty free. By contrast, Colombia's average duty on imports from the United States is 14% for manufactured goods and far higher for key agricultural exports. In short, Colombians enjoy nearly free access to our market while our access to theirs remains limited.
This agreement will remedy the unfairness of today's U.S.-Colombia trade relationship by
sweeping away most of Colombia's tariffs immediately. In addition, the agreement will open services markets, secure the intellectual property of U.S. inventors, researchers, and creative artists, and introduce enforceable protections for worker rights and the environment. Indeed, Colombia's Congress has already enacted into law all of the provisions on labor, the environment, public health and enforcement agreed to in the bipartisan trade deal of May 10, 2007.
The geostrategic importance of the agreement is also profound. The agreement will help
Colombians lock in the gains of the past decade, which has seen violence fall to its lowest level in a generation. More than 40,000 fighters have been demobilized as insurgent groups have lost legitimacy, and the number of Colombians enrolled in school and the health care system has risen sharply. These sustained results are a triumph of brave Colombians as well as bipartisan U.S. foreign policy. The Colombia agreement will build on this solid foundation.
There is particular urgency to approving the Colombia trade agreement this year. Because the
Administration transmitted the implementing bill for the agreement to Congress in April, the bill enjoys the benefits of protection under Trade Promotion Authority (TPA) during the 110th Congress. If it is not approved this year, a new implementing bill in the 111th Congress would face tremendous uncertainty under House and Senate rules relating to how it would be considered. In short, without TPA protection it would be nearly impossible to pass this trade agreement next year.
U.S.-Panama Trade Promotion Agreement
In similar fashion, the Panama trade agreement will strengthen the century-old U.S.-Panama
geostrategic partnership. From the time of the canal's construction, the United States and Panama have made common cause on issues from security to commerce. Panama has major ports on both the Atlantic and the Pacific, and fully five percent of world trade passes through the canal. With a remarkable onethird of its population speaking English fluently and a fully dollarized economy, Panama is a good friend and partner of the United States. The trade agreement will help Americans and Panamanians get even more benefits from these longstanding ties.
Like the agreement with Colombia, the Panama trade agreement will level the playing field for
American workers, farmers, and companies by eliminating over 88% of Panama's tariffs on U.S. consumer and industrial goods and a majority of the most competitive U.S. farm exports immediately upon implementation. Panama's average duty on imports from the United States is 7%, whereas the United States eliminated nearly all its tariffs on imports from Panama through the Caribbean Basin Initiative in 1984. The agreement will make these trade openings reciprocal — a two-way street that will benefit both countries.
In addition, the Panama Canal Authority is undertaking an expansion of the canal at a cost of
more than $5 billion — one of the largest public works projects in the world today. If approved, the agreement will grant U.S. firms ready access to the Panamanian market and the chance to compete in selling everything from heavy equipment to engineering services in a market that has reached annual growth rates above 8% in recent years.
With its economy overwhelmingly based on services, Panama's economy complements the
strengths of the U.S. economy. Panama has no significant textile or apparel industry, and its farmers' export crops (mostly tropical products) largely do no compete with U.S. farm and ranch products. Panama has already ratified all eight International Labor Organization conventions on core labor standards, and Panama's National Council of Organized Workers, the umbrella group for all of the country's trade unions, endorsed the agreement in June 2007. Environmental stewardship has long been a priority for Panamanians as the canal is dependent on protecting the forests in the watershed that allows this engineering marvel to function.
Clearly, Congress can lend a helping hand to U.S workers and farmers by approving both of
these landmark agreements. To reject them would be to abandon America's closest allies in Latin America, deny the United States real opportunities that will help create jobs and raise incomes, and do nothing to help Colombia and Panama continue their impressive progress over recent years. For these reasons, the Latin America Trade Coalition urges you to approve the U.S.-Colombia Trade Promotion Agreement and the U.S.-Panama Trade Promotion Agreement this year.