Colombia trade benefits seen at risk without US deal
Colombia trade benefits seen at risk without US deal
Wed Jan 25, 2006
By Doug Palmer
WASHINGTON (Reuters) - Colombia could lose current trade benefits with the United States if the two countries are unable to finish talks on a free trade agreement, U.S. industry and congressional sources said on Wednesday.
The warning came as U.S. and Colombian negotiators began their 14th round of talks this week and next in Washington.
Colombia, Peru and Ecuador all started free trade talks with the United States in May 2004, and at the time hoped to finish by early 2005. Peru finally wrapped up a deal in December, but Colombia and Ecuador have balked at some of Washington’s demands for agricultural market openings.
The three countries, along with Bolivia, currently have duty-free access to the U.S. market for many goods under U.S. legislation dating back to the early 1990s.
The program has helped the four countries double their exports to the United States over the past 15 years to more than $15 billion annually. Leading Colombian exports have been petroleum-related products, clothing and cut flowers.
The latest extension expires at the end of this year, and the idea of making those trade benefits permanent was one reason Colombia, Peru and Ecuador have been eager for a free trade pact with the United States.
Now, if Colombia and Ecuador are unable to finish talks with the United States, there is a risk that Congress will not renew those trade benefits, said Frank Vargo, vice president for international affairs at the National Association of Manufacturers.
"Colombia has to recognize that the clock is running," Vargo said. That applies not only to the trade benefits, but to the short window Congress is expected to have to consider trade agreements this year, he said.
U.S. law requires the Bush administration to notify Congress 90 days before signing any trade agreement. At the same time, lawmakers in the House of Representatives who face reelection in November are unlikely to want to vote on any trade pacts in September and October, he said.
A Republican aide on the Senate Finance Committee agreed Colombia and Ecuador could lose current trade benefits if they are unable to finish talks with the United States.
"The issue of renewal is certainly being pondered here in Congress ... It’s not a foregone conclusion," the aide said, speaking on condition he not be identified out of deference to lawmakers who will make the actual policy decision.
Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, also has warned that agricultural market access terms of the Colombia agreement must be at least as good as the U.S.-Central American Free Trade Agreement, or CAFTA, that Congress approved last year, the committee aide said.
If Colombia can’t agree to those terms, "there’s really not much point in continuing negotiations" because the agreement would not come to the floor for a Senate vote, the aide said.
A spokesman for the U.S. Trade Representative’s office would not comment on whether Colombia could lose trade benefits if it fails to reach a deal with the United States.
She focused instead on chances for the two countries to finish their talks. "We are making good progress in narrowing differences," USTR spokeswoman Neena Moorjani said.
