Remarks by Christopher A. Padilla
Acting Under Secretary of Commerce
for International Trade
“Strengthening America’s Security and Prosperity:
The Case for U.S.-Colombia Free Trade”
2007 National District Export Council Conference
November 9, 2007
Thank you, Israel, for that kind introduction. America’s District Export Councils are critical partners in strengthening America’s economy, so I’m pleased to have the chance to be with you today. The close partnership between the District Export Councils and the Department of Commerce is a great example of what can be accomplished when government and the private sector work together. Your efforts have been critical to spreading the message that trade is good for American workers and farmers. I look forward to continuing this close partnership in the year to come.
Yesterday you heard from Ambassador Schwab, and spent the day hearing panels on “the great trade debate” taking place in our country. For more than fifty years, with strong bipartisan support, America has worked for open markets and free trade. We have signed trade agreements to tear down foreign barriers, slash foreign tariffs, and open new markets for American products. We recognized that these policies would provide America with new and unprecedented opportunities, because ninety-five percent of the world’s consumers live outside of our borders.
This policy has worked remarkably well for America. We’ve reached billions of new consumers for our manufacturers, farmers, and service companies. Now more than ever, exports are a huge driver of American economic growth. In 2006, America exported an astounding $1.4 trillion worth of goods and services. This year so far, exports have so far accounted for one-third of our economic growth.
President Bush understands this, and has made opening up new markets for American workers a top trade and foreign policy priority. A key to our strategy is the negotiation of new free trade agreements, which are a crucial vehicle for enabling America to compete freely and fairly in overseas markets. Since 2001, the United States has implemented free trade agreements with eleven countries; bringing the total number of countries with FTAs to 14. We now have the opportunity to further strengthen our economy and enhance our security through four outstanding new trade agreements with Peru, Columbia, Panama, and South Korea.
All trade agreements generate debate, but the Free Trade Agreement with Colombia seems to have attracted quite a bit of attention, so I want to spend my time today focused on it. It is an agreement I feel passionately about, not only because of the enormous opportunities it would provide for America, but because I have seen firsthand the remarkable economic and social transformation that is going on in Colombia.
I recently had the opportunity to travel to Colombia with Secretary Gutierrez and several Members of Congress. Although my wife knew I was traveling to Colombia, I must confess I didn’t tell her that we would be making a stop in Medellín. We arrived there after dark, and as I climbed into the government van that would take us through the streets of Medellín, I could think of only one thing: the scene in the movie Clear & Present Danger, in which Harrison Ford’s motorcade is attacked by Colombian narco-terrorists minutes after he leaves the airport. Needless to say, there was a shared feeling of uncertainty as we departed, and I don’t recall anyone speaking, including the Members of Congress whose company I shared.
But while we were driving into Medellín, an amazing thing happened. We saw crowded outdoor cafes and restaurants bustling with activity, an impromptu soccer game in a well-lit park, children playing in the streets, and policemen armed only with nightsticks. It became vividly clear to me that the Colombia of today is not the Colombia of ten or even five years ago – and nowhere is this remarkable transformation more apparent than in Medellín. What was once the most violent city in the world is now a gateway to the global economy. Drug lords in Medellín have been replaced by apparel producers, flower growers, and small manufacturers who thrive by exporting their products to the United States. Under the steady leadership of President Álvaro Uribe, homicides in Colombia have dropped nearly 70 percent. The per capita homicide rate in Medellín is less than that of Baltimore.
Giving American Products a Fair Shake
Here’s the most ironic point about the current debate on whether to have a free trade agreement with Colombia: we already have free trade between the United States and Colombia, but it is one-way free trade. Beginning in the mid 1990s and continuing until today, Congress has voted routinely and overwhelmingly to throw open the U.S. market to duty-free imported Colombian products coming into the United States.
In fact, if you remember any numbers from my speech today, remember only these: 92, 16, and 365. Ninety-two percent of imports from Colombia currently enter the United States completely duty free. It has been that way for 16 years, since Congress first passed the Andean Trade Preferences Act that gave Colombia access to our market as a way to reduce poverty and fight the drug trade. And 365 is the number of Members of Congress from both sides of the aisle who voted strongly in favor of these one-way preferences the last time they were up for renewal. Don’t believe me? Here is a shopping bag of products. Let’s compare some prices:
- This can of Colombian coffee comes into the United States duty-free. But this bottle of Pepsi, made in the USA, pays a stiff 20% tax when sold in Colombia.
- These beautiful Colombian flowers – a major Colombian export – come into our market and pay zero tariffs. But this box of U.S.-made fertilizer, which helps those flowers grow, is charged up to 15% when exported to Colombia.
- This bag of carrots comes into the United States – and onto your dinner table – without paying any U.S. tariffs. But this tractor, made by Caterpillar in East Peoria, Illinois, faces a 10 percent duty when sold to a Colombian carrot farmer.
- This Pennsylvania apple pays a 15 percent tariff when sold in Colombia. Meanwhile, this Colombian banana enters the United States duty-free.
In fact, even the paper grocery bag containing my examples is subject to a major tariff when it is sold in Colombia. Now, I’ll bet you’re thinking that this isn’t fair. But the good news is that in our shopping bag we also have a great coupon that will eliminate all of these taxes on our products, in most cases immediately. The coupon isn’t from the Sunday papers… it’s called the U.S.-Colombia Free Trade Agreement, and it deserves a vote in the Congress of the United States.
Improving the Livelihood of Colombians
My little bag of groceries helps demonstrate why the Colombia FTA is good for America. But the agreement would be very good for Colombians, too. The FTA will help solidify and support many of the important economic and social reforms that President Uribe has made to improve the lives of millions of Colombians who have suffered from decades of violence and insurgency.
The past five years have seen enormous gains, giving new hope and opportunities for millions of Colombians. More kids are going to school, with enrollment up to 92 percent, compared to about 80 percent five years ago. We have seen a 64 percent increase in children receiving school meals. More than three million people have been added to the public health system since President Uribe took office, and the overall poverty rate has declined.
Opponents of the FTA raise concerns about violence against union leaders and activists, and some like to point out that Colombia has been a dangerous place to be a union leader. Well, Colombia has also been a dangerous place to be a schoolteacher, a bricklayer, a store clerk, or a government official. Violence in general has been a major problem in Colombia, where killing, kidnapping, and intimidation were the norm for decades. But Colombia has dramatically improved public safety – not only for union organizers, but for the society as a whole. The President’s security strategy has led a two-thirds decline in the number of assassinations of union members over the past six years, and the rate of violence against union leaders is now lower than the general rate of criminal violence. And the Government is also making a strong effort to prosecute those who have harmed union officials.
President Uribe is committed to doing even more, building on this great progress. We in the United States must assist him in these efforts. But defeating the FTA with Colombia will do nothing to help stem union violence, nor will it assist the Colombian government to bring more perpetrators of crime to justice. Indeed, defeating the FTA and turning our backs on progress there could actually set back the remarkable economic and social progress made to date.
Democracy and Security: Following Through on our Commitments
Finally, it is important to remember that the United States has invested considerable resources in the future of Colombia, and has done so with strong bipartisan support. In 2001, the Clinton Administration, working with a Republican-controlled Congress, passed Plan Colombia to fight the drug trade, reduce poverty and violence, and promote economic and social progress. Just this week, the Washington Post noted that Plan Colombia has been “a clear success in helping the Colombian government beat back drug traffickers, leftist guerrillas and right-wing insurgents.” The U.S. has invested more than $5 billion in Colombia, with significant and positive results such as a dramatic drop in cocaine production, kidnappings, homicides, and terrorist attacks. Why, after spending billions of U.S. taxpayer dollars to help Colombia, would the United States now turn its back on one of its most important allies in the Western Hemisphere?
If we reject the Colombia agreement, we could strengthen the voices of other leaders in Latin America who are taking a different path – whose recipe for governing includes undermining democratic institutions, seizing private property, and destabilizing neighboring countries. The vote on this agreement is about more than trade. We must make clear that we stand with our friends in elected democracies who are working to strengthen democracy and prosperity in a region that has seen too little of both.
Colombia Deserves a Vote
Ladies and gentlemen, in Colombia they have an expression: “Si abres tu mente, te abrimos las puertas.” -- “If you open your minds, we will open our doors.” I think this one phrase very eloquently sums up the vital question we face on whether to approve the free trade agreement with Colombia. If we open our minds and look at the facts, we will realize that the Colombia of today is not the Colombia of fifteen years ago, or the Colombia we know from the movies. If we open our minds and witness Colombia’s amazing transformation, Colombia will open its doors to our products… and a closer partnership.
This is a story that needs to be told, and this is an agreement that deserves a vote. Despite decades of violence caused by insurgency and a brutal and devastating drug trade, this is a Latin American nation that has remained committed to economic freedom, to openness, and to democracy. The hand of the Colombian people is outstretched – all that remains is for America to decide whether to take it in friendship, or to turn away in misguided fear. In my mind, the choice is clear: America should stand with those who stand for economic and political freedom. I hope you will agree.
Thank you very much.