Google+
Close

The Corner

The one and only.

The Consequences of Trade Inaction in Latin America



Text  



Approving free-trade agreements with Colombia, Panama, and South Korea would be a boon to our economy, create jobs for Floridians, and help solidify our alliances with these steadfast allies. The agreements with Colombia and Panama in particular would boost Florida’s economy, where over 1 million Floridians remain out of work. Unfortunately, the president has inexplicably allowed these golden economic opportunities to languish by not submitting the deals to Congress for up-or-down votes.

An unacceptable consequence of America taking our Latin American neighbors for granted is that China, among other nations, has capitalized on our complacency, signed their own deals, and made great strides to surpass America as the region’s leading trade partner.

A February 2011 Foreign Relations Committee report by Sen. Richard Lugar, “Losing Jobs and Alienating Friends: The Consequences of Falling Behind on Free Trade with Colombia and Panama,” notes that “U.S. market share is being lost to China, Brazil, and other countries in Latin America that benefit from trade accords with Colombia.”

For example, the report notes:

When the Colombia-Canada FTA is implemented, as early as this summer, the immediate effect is likely to be the replacement of U.S. wheat in Colombia with lower-priced, duty-free Canadian wheat. FTA tariff reductions will also benefit Canadian heavy equipment and other capital good exports to Colombia at the expense of U.S.-manufactured products, which still face tariffs ranging from 5 to 20 percent. … In the past 2 years, however, the United States has lost $1 billion in agricultural exports to Colombia due to regional accords and international commercial competition. For the first time in U.S.-Colombian agricultural trade history, the U.S. has lost its position as Colombia’s number one agricultural supplier to Argentina.

Losing our competitive advantage to China is a particular concern. As Senator Lugar’s report points out, “In South America, China has replaced the United States as Brazil’s largest trading partner. … Today, China is Colombia’s second largest trading partner after the United States. The [Private Sector Competitiveness] Council predicts that China will supplant the United States as the leading trade partner within 10 years if current trends continue without a U.S.-Colombia FTA.”

America’s trade complacency is unacceptable. We should be an indispensable friend to our Latin American neighbors, but instead we are being replaced as their leading trading partner and most reliable ally.

In the 21st-century economy, America cannot effectively compete with China and other nations if we don’t aggressively move to open new markets to American products and services. We simply cannot accept an American trade policy that is a fool-proof plan to lose American jobs, alienate our friends, and allow America to be diminished.

Florida in particular will be short-changed if we don’t approve trade agreements with Colombia and Panama. According to Enterprise Florida, last year Colombia ranked as Florida’s second-largest international trade partner. Nearly half of all U.S.-made high-tech goods exported to Colombia originated in Florida. Florida is the principal gateway for Colombian firms entering the North American market. And using U.S. Department of Commerce rule-of-thumb estimates, passage of the U.S.-Colombia agreement would likely result in the addition of 6,400 Florida jobs annually. With regards to Panama, over 10 percent of its worldwide trade moves through Florida. Fifty-six percent of all U.S.-made high-tech goods exported to Panama originated in Florida. And the agreement’s passage would likely result in approximately 1,800 jobs annually.

Our Latin American allies are not going to wait around forever for America to get its act together. During the president’s trip to Latin America, I hope his eyes will be opened to the reality that the void of sustained, proactive American engagement in Latin America is being filled by other nations who recognize the opportunities in the region. Although he is not even visiting Colombia and Panama next week, meeting face-to-face with their leaders and telling them what it will take for these agreements to earn his support, I hope the president understands the economic and strategic consequences of pursuing his job-destroying policy of trade inaction.

— Sen. Marco Rubio (R., Fla.) serves as ranking member of the Senate Foreign Relations Subcommittee on Western Hemisphere, Peace Corps and Global Narcotics Affairs.



Text