Canada may gain as US delays Colombia agreement

Bloomberg | April 28, 2010

Canada may gain as US delays Colombia agreement

By Theophilos Argitis

April 28 (Bloomberg) — Colombian Trade Minister Luis Guillermo Plata said Canadian exporters may gain as U.S. lawmakers delay approval of a free-trade agreement with the Latin American country.

Plata was in Ottawa to court lawmakers from Canada’s main opposition Liberal Party in a bid to cement their support for a trade accord and assure its passage in Parliament. He testified at a committee hearing yesterday, met with Liberal leader Michael Ignatieff and dined twice with other Liberal lawmakers during his two-day visit.

“Many of the things that we buy from the U.S. we could buy from Canada and we could buy tariff-free,” Plata, 42, said, pointing to purchases of wheat, barley, corn, machinery and mining equipment.

“The U.S. has to think about it,” he said in an interview at the Colombian embassy in Ottawa. “If they come late to the party, and Canada has been able to move forward and been able to displace them from the market, it will be very hard to reclaim that market.”

Colombian President Alvaro Uribe, whose term expires in August, negotiated a free-trade agreement with the U.S. in 2006.

“I’m pretty confident it will be done, I’m just disappointed that we worked very hard for this and that for us time has run out. So under my watch it won’t happen and it’s saddening,” Plata said.

Trade Glitches

President Barack Obama has said he would press for passage of free-trade agreements with South Korea, Panama and Colombia, though he cautioned that “different glitches” must first be negotiated with each country.

The administration wants to balance its goal of doubling U.S. exports with concerns from Democratic lawmakers and labor unions that the trade agreements fail to align labor, tax and environmental policies.

Plata, who met with U.S. Trade Representative Ron Kirk last week in Washington, said U.S. officials initially signaled to him that lawmakers would make progress on trade accords after the U.S. Congress passed new health care legislation.

“To my surprise I find a very big disconnect between the speech and the reality,” he said. “The reality is that I don’t see the U.S. moving.”

Colombia was the U.S.’s eighth-largest market for corn last year, down from sixth place a year earlier, according to data from the U.S. Department of Agriculture. Its ranking for wheat fell to 10th place from seventh place in 2008.

Out of the Game

If Canada seals a trade deal with Colombia, it may spur U.S. lawmakers to expedite the delayed accord, said Walter Bastian, the U.S. Commerce Department’s top official on Latin America.

U.S. trade talks with Chile were expedited in similar fashion after Canada cemented a deal with the South American country, he added.

“When people started to realize the lost business opportunities, it spurred negotiators to get it done,” Bastian said in an interview in Nicaragua today. “The rest of the world isn’t standing still. We don’t want to be left out of the game.”

Congress should speed the accord’s approval without neglecting the need to address violence against Colombian union workers, he said.

Bridge the Gap

Prime Minister Stephen Harper’s governing Conservatives have made strengthening ties with Latin America a priority in an effort to broaden markets for Canadian commodities and reduce the country’s dependence on the U.S. economy.

Harper’s Conservatives lack a majority of seats in Parliament and need the support of opposition lawmakers to pass legislation. The Liberals have said they will back an amended version of the agreement that includes yearly assessments of human rights conditions.

The other two parties — the New Democratic Party and Bloc Quebecois — are opposed to the agreement.

“Having something in place with Canada brings credibility to the table,” Plata said. “Canada found the way to bridge the difference between Liberals and Conservatives. There is no reason why you shouldn’t be able to bridge the difference between Republicans and Democrats.”

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source: Bloomberg