From Medellin, Hopeful Signs For A Colombia Free-Trade Pact


Investor’s Business Daily
April 3, 2009
Perspective – by Monica Showalter

Colombia asserted itself on the international stage last week, with the 50th annual governors’ meeting of the Inter-American Development Bank in Medellin. Some 6,000 bankers and businesspeople came.

All spruced up for the meeting, Medellin did its best to reclaim its identity as a great industrial center in the Americas, erasing the terrible image it once had as center of the global drug trade.

Looking at the graceful, Hong Kong-like skyline amid flowers and greenery, it’s hard to believe Medellin ever had such a past.

Corporate titans from Brazil, Spain, Japan, China and Germany were present along with the bankers, having invested $8.5 billion in Colombia in 2008. A few U.S. executives were present too, but the Americans seemed overshadowed by the others.

It isn’t surprising, because Colombia is rapidly moving to diversify its trading partners, signing deals with China, Japan, Korea, the European Union, Canada and Central America, following Chile’s model of signing freetrade deals with all comers.

The U.S., with its Colombia free-trade agreement still on ice in Congress, was the only country that looked isolated and out of tune with the world without its pact.

It’s frustrating. But there were four signs that word is filtering back to Washington that the U.S. is getting left behind. This may mean the Obama administration is looking for a way to pass the pact and bring the U.S. back into the global mainstream.

First , former President Clinton made an impassioned defense of Colombia last Saturday against what could only have been its anti-free-trade critics at a “conversation” event with IADB President Luis Moreno.

“I just thought you were getting a raw deal,” the former president said. “You have been through one tough situation after another and you keep looking better to me, so I would just urge you not to give up.”

What else could he have been talking about but the Colombia free-trade treaty?

“None of the people who have watched this country over the last 20 years can doubt that a heroic struggle has been made, not only to reclaim the land for law abiding people but to do it in a way that gives a more law abiding, open and free society. Are you perfect? No. So whoever’s perfect should feel free to cast stones at you. Whoever’s not should ask, ‘If I had to live with what they have, could I have done as well?’ I think you ought to be proud of this country. I am,” Clinton concluded, bringing the audience to its feet.

It looked like a rebuke to Colombia’s congressional critics. Clinton’s statement was delicately finessed to avoid controversy.

But it suggested support for the pact and may translate to influence with those in the Obama administration. It’s hard to assess what influence Clinton has with them, even with his wife, Secretary of State Hillary Clinton, who isn’t afraid to disagree with him.

But it’s worth noting that the secretary was in Mexico that same week, talking to the Mexican government. She’s capable of the same for Colombia.

Second , Colombia’s trade minister, Luis Guillermo Plata, told reporters he had received calls from U.S. Trade Representative Ron Kirk, stating an interest in working with him on matters of mutual interest to the countries. He didn’t disclose specifics, but what else could they be but trade?

The fact Kirk even called him is encouraging. What’s more, there are signs that Plata has become an important figure in Colombian President Uribe’s administration this year, based on his successes with other trade treaties. Uribe praised Plata and kept him at his side throughout the conference.

Third , Treasury Secretary Timothy Geithner came to the conference and broadly emphasized the importance of trade:

“We need to reaffirm our commitment to maintain open policies toward international trade and investment and to avoid protectionist measures that could threaten recovery. This will be a challenge for all of us, given the severity of the pressures we each face domestically.”

He was describing a dynamic most clearly seen not in other countries attending, but in the U.S. At a minimum, this doesn’t sound as though Geithner opposes the pact. Geithner’s closeness to Obama, and his presence at the conference, add reasons for hope.

U.S. officials have said that the treaty will have to be rewritten to please Big Labor and protectionist Democrats in Congress before it can come to a congressional vote, and that isn’t encouraging. They’ve done this before, extracting new concessions like hostagetakers looking for a second ransom, only to come up with new demands.

Fourth , and finally, Uribe’s response to rewriting the treaty suggested he was closing no doors. I asked Uribe whether he’d be willing to accept new terms from Congress.

“We have worked as hard as we can with the U.S.” he told me. “In the case of the U.S., we work to do our best but need patience. Patience, and importantly, prudence.”

True, Clinton may be politically powerless. Geithner may have been offering excuses. And Plata may have been saying less than he seemed. But Uribe could have easily signaled a deal was a deal and closed the door to more nonsense from Democrats, who have negotiated this deal nearly to death.

He didn’t.

That seemed to be the clearest signal yet that something important may be going on behind the scenes that could surprise us.

As the past year’s news from Colombia has shown, there are often big surprises from this country.

Showalter, an IBD reporter and researcher, filed this report out of the Inter-American Development Bank meeting held in Medellin, Colombia, last week.

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