Canada seeks Colombia agreement, as US deal stalls

Bloomberg

Canada Seeks Colombia Agreement, as U.S. Deal Stalls

By Theophilos Argitis and Alexandre Deslongchamps

6 May 2008

May 6 (Bloomberg) — Canada’s Trade Minister David Emerson said he may soon complete a free trade agreement with Colombia, rejecting a plan by U.S. congressional Democrats to wait until the Latin American nation improves its human rights record.

Emerson said in an interview he’s ``cautiously optimistic’’ an accord with Colombia can be reached by September. The two countries still need to resolve disagreements on agricultural products, which will require another round of negotiations, he said.

``Democracy is beginning to take root in a meaningful way,’’ Emerson, 62, said in a Bloomberg interview in Ottawa yesterday evening. ``We should give them a hand economically.’’

Prime Minister Stephen Harper has made strengthening ties with Latin America a priority in an effort to broaden markets for Canadian commodities and reduce dependence on a slowing U.S. economy. Harper says the trade accord also will help Colombia stem violence against labor leaders.

An agreement would give Canadian farmers preferential access to the U.S.’s third largest market for wheat exports in Latin America. It also underscores the risks of growing trade protectionism in the U.S. that includes labor union efforts to thwart a trade accord with South Korea, said Jeffrey Schott, an economist at the Peterson Institute for International Economics in Washington.

Wheat Exports

``Colombia is a forward attack to try to pre-empt other agreements from moving forward,’’ Schott said in a telephone interview. ``You stop Colombia and you stop Korea.’’

U.S. farmers are promising to use the Canadian agreement to ratchet up pressure on the Congress to pass a deal. The U.S. is Colombia’s largest trading partner, with $18 billion of trade between the two countries in 2007, according to the U.S. Census Bureau. Canada’s trade with Colombia amounted to about C$1 billion ($1 billion) last year, according to Statistics Canada.

The U.S. share of Colombia’s wheat imports has averaged 56 percent over the past decade, compared with 35 percent for Canada, according to data provided by U.S. Wheat Associates.

``We certainly are using that argument,’’ said Alan Tracy, president of the U.S. Wheat Associates, a marketing organization. ``For us to fail to ratify the U.S.-Colombia free trade agreement would distort trade, in this case in Canada’s favor.’’

A trade agreement with Canada would also be a political victory for Colombian President Alvaro Uribe, 55, who has been criticized for failing to stop killings of trade union organizers.

U.S. Ally

The U.S. political battle over the trade agreement pits the Bush administration against Democrats in Congress who, backed by unions and human-rights groups, say Washington’s staunchest ally in South America shouldn’t get the benefits of a trade agreement until it stamps out violence against labor organizers.

Both Democrat presidential candidates, Barack Obama and Hillary Clinton, are also opposed to the trade accord.

As of mid April, 17 union members had been killed in Colombia compared with 26 in all of last year, according to Colombian government figures. Such killings, which reached a peak of 196 in 2002, make Colombia the deadliest country in the world for union organizing, according to Human Rights Watch.

The administration and businesses groups say the accord is needed to bolster a key ally in the region. Colombia, which is fighting a four-decade war against Marxist guerrillas and cooperating with the U.S. on drug eradication, is also an ally against a belligerent neighbor in Venezuelan President Hugo Chavez.

`Aid and Comfort’

An accord would also keep countries like Canada and the European Union from edging out U.S. companies, Wally Herger, the top Republican on the trade subcommittee, said today. ``If we don’t get there first, it will be very difficult to catch up,’’ Herger told trade lobbyists today. ``The Colombian agreement is too important to be left by the wayside.’’

A Canadian trade deal may help remove some of the stigma of dealing with the Latin American country, said John Kirton, a political scientist at the University of Toronto.

An agreement ``will give aid and comfort to all the liberalizing forces within the United States who are instantly going to notice it and say if the Canadians are doing Colombia, why can’t we,’’ Kirton said.

Less Resistance

Harper faces less resistance in Canada than Bush does in the U.S. Congress. The opposition Liberals have indicated they’re prepared to back a trade agreement with Colombia that includes labor and environmental protection provisions, providing Harper’s minority Conservative government with enough support to pass the agreement in Parliament.

``If issues of human rights and the environment are addressed in a meaningful way, that obviously puts us in a favorable position,’’ said Navdeep Bains, the Liberal legislator responsible for international trade.

An accord would largely favor Canada. Already, about 80 percent of Colombian exports to Canada are duty-free, according to figures provided by the trade department. Colombia imports wheat and other cereals, newsprint, off-road dump trucks and machinery and electrical equipment from Canada and exports coal, coffee, banana, cut flowers and sugars. Canadians invested C$453 million in the country in 2006.

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