The Importance of Ratifying Free Trade Agreements

By Nicole M. Ferrand

For some time now, media outlets in Latin America and the US have been closely monitoring the negotiations for an Andean Free Trade agreement involving Colombia, Peru, and the United States. Lima’s agreement was signed on April 12, 2006 and the Peruvian Congress ratified it on June 28 2006. Bogota signed the FTA on November 22, 2006. The US Congress still needs to ratify both of them.

Over the course of many years, the United States has been trying to get the cooperation of Colombia and Peru to combat narcotics trafficking and the trade agreements were promised as a sign of recognition for their success on this front. No one can deny Uribe’s success since he has enacted tough policies to confront not only drug-trafficking but also the terrorist group inside Colombia, known as the FARC which is greatly responsible for the narcotic trafficking problem in South America. Since July, 2006, after Alan Garcia was elected in Peru, defeating Hugo Chavez’s puppet, Ollanta Humala, the country quickly aligned itself with the United States and has also made progress in their fight against drugs.

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The Colombian and Peruvian FTA’s must be approved by the House Ways and Means and Senate Finance committees before they can be considered by the full Congress. The midterm U.S. elections that gave the Democrats control of Congress in January 2007, have delayed the much anticipated ratifications.

Andean Nations signed the Andean Trade Preference and Drug Eradication Act (ATPDEA), which replaced the expired Andean Trade Preferences Act (ATPA). The ATPDEA was enacted by President Bush on August 6^th 2002, granting Bolivia , Colombia , Ecuador and Peru preferential tariff treatment for specific products. It expired on December 31^st 2006 and was renewed again for 6 months. Bogota and Lima are eager to ratify the FTA’s with the US since the ATPDEA, although a step forward, still forces exporters to cover the full costs of the tariffs which, in many cases, is a much too heavy burden for some businesses.  

A trade-skeptic Democratic-controlled Congress has announced that the free-trade agreements with the United States will need “substantive adjustments” to secure Congressional approval since many Democrats have objections over labor rights . Deputy U.S. Trade Representative John K. Veroneau made this announcement on January 18, 2007 . [1]

Pablo Bachelet makes an excellent point in a piece published in The Miami Herald this week. In the article it is argued that, “changing the texts of the agreements would be hard to do even if the Bush administration wanted to, officials and trade experts say. The language of the Peru and Colombian pacts took months of strenuous negotiations and Peru ‘s Congress has already ratified its agreement with the United States . Plus, U.S. law stipulates that the United States can only demand that countries implement their own labor laws, whereas Democrats want the agreements to include what they call “core International Labor Organization standards” in the texts themselves.” Gretchen Hamel, a representative of the Bush administration, quickly came out to clarify that the adjustments could be made through “some binding instrument and it is not necessary to reopen the text of the agreement.” [2]

“Democrats, backed by U.S. labor unions, have long complained that the free trade deals being negotiated by the administration did not include enough protections for American workers. They said that because of this, the U.S. workers’ jobs would be jeopardized by competition from low-wage countries with lax labor laws.” [3]