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Bills meant to help Latin American economies by creating better circumstances for their exports to the United States are having a difficult ride in the Senate. As part of his misguided strategy meant to gain ground for the Democrats in the runup to the November congressional elections, majority leader Tom Daschle has said that he will not advance legislation requested by President Bush that would make it possible for the United States to negotiate trade accords with Latin American countries.
This is a two-way street. During the past decade, exports represented one-fourth of the U.S. economic growth and have been the backup of 12 millions jobs in the United States. As the nation is emerging from a recession, it should do everything possible to identify and develop new markets for American products and services, particularly at a time that other countries vigorously pursue accords that promote their international trade.
The most importunate measure Congress may pass to further this objective is the Trade Promotion Authority (TPA), known before as Fast-Track Authority, which gives the president the authority to negotiate trade agreements that Congress can only vote up or down but not amend-a necessary condition if foreign countries are to enter into the long and complex negotiations these pacts require.
These agreements not only expand U.S. markets for its goods and services but also bring down the price of goods for American families and businesses.
From 1975 to 1994, when the previous TPA-equivalent expired, all American presidents were granted this authority. However, since the law lapsed, the U.S. has fallen behind the rest of the world in negotiating trade agreements. There are today in the world 150 regional trade or tariff agreements. The U.S, is part of only three of them. The European Union has negotiated 22 of those agreements, and is negotiating 12 others with more countries. Since 1994, Mexico has negotiated new free-trade agreements with 29 countries.
The fact is that for the U.S. these agreements are suspended in limbo, while other countries have taken the opportunity to forge new agreements. And in many cases those agreements signify higher tariffs and barriers for American firms than for their foreign competitors, which translates into jobs and export losses for the U.S.
A progressive trade strategy is particularly important for U.S. high-technology industry, which last year represented 29 percent of U.S. exports. Aside from eliminating or reducing tariffs on high-technology products, trade agreements deal with intellectual property, elimination of non-tariff barriers and the establishment of policies that encourage Internet commerce, as well as faster and more efficient processes at customs.
For foreign countries, particularly those under development. these agreements signify for them a better chance of acceding to developed markets and of selling their products in more markets and at better prices.
It could happen that more free trade could create some disturbances in the U.S. labor market-the source of the major argument Daschle wields against these pacts-but this could be remedied with legislation to help displaced workers to find new work opportunities. President Bush has already proposed that such legislation be part of TPA.
The House has already passed TPA. There is no reason, except the Democrat majority's kowtowing to the AFL-CIO, why the Senate should not approve the Trade Promotion Authority.
There is another measure before the Senate involving Latin America that is important and is in trouble: Colombia could be excluded from some of the U.S. help for fighting drug traffic. But it's not the Senate fault if this happens.
The U.S. Senate is about to vote an extension of the 1998 Andean Trade Preference Act (ATPA) under which imports from Colombia, Ecuador, Peru and Bolivia enter the U.S. duty-free as compensation for having pledged to combat drug production and traffic. The latest extension of this legislation expired December 4 but was prolonged by President Bush's executive order until May 16.
However, in a visit last week to Bogota, U.S. deputy secretary of Commerce William Lash warned Colombia's Commerce secretary Angela Marνa Orozco that Colombia would be left out of the extension the Senate is expected to pass (the House already did) because it owes more that $130 million in penalties adjudicated by international arbitration panels for having broken contracts signed by Colombian state-owned companies with U.S. firms.
Unpaid are penalties of $73 million to Nortel and $63 million to TermoRio for nonfulfillment of contracts. The Senate is expected to approve the extension but will exclude Colombia from the benefits of ATPA until those penalties are paid, Lash said. Colombia would then be paying millions of dollars in custom duties on its exports to the U.S. that would put it at a competitive disadvantage with its Andean neighbors.
Colombia is not contesting the arbitrators' judgment, but its not saying when it will pay, either. It should, and soon.
Claudio Campuzano (claudio-campuzano@hotmail.com) is U.S, correspondent for the Latin American newsweekly Tiempos del Mundo and editorial page editor of the New York daily Noticias del Mundo. He writes weekly for World Tribune.com