Official: U.S., Colombia reach deal on trade pact

By Julie Pace

Associated Press

Published: Wednesday, April 6 2011 12:03 p.m. MDT

WASHINGTON — After weeks of intense negotiations, the United States and Colombia have reached a deal on a free trade pact that the White House says is a vital part of President Barack Obama's economic agenda.

The administration said the agreement came together after the Colombians agreed to offer greater protections for workers and union leaders, an area of key concern for the U.S. The final pact will boost U.S. exports to Colombia by more than $1 billion per year and could support thousands of American jobs.

The deal has bipartisan support in Congress, which must approve the agreement before it can be implemented. Republican lawmakers have used the pact as a political bargaining chip, threatening to block the confirmation of a new commerce secretary and hold up final passage of another deal with South Korea if the administration did not finalize a deal with Colombia, as well as another pending agreement with Panama.

Completing the Colombia deal could increase pressure on the Panamanian government to address outstanding issues that remain in those negotiations, administration officials said. U.S. concerns with Panama are focused on the transparency of tax laws there, though officials say Panama will likely pass a tax-information exchange agreement that could end the stalemate by the end of this month.

Under the agreement with Colombia, 80 percent of U.S. exports of consumer and industrial products to Colombia will become duty-free, with the remaining tariffs phased out over the next 10 years. More than half of U.S. agriculture exports to Colombia would also become duty-free, with almost all tariffs eliminated within 15 years.

With Colombia, the third largest economy in Central and South America, set to implement trade pacts with Canada and the European Union, the administration said finalizing the deal now was crucial to the U.S. keeping an economic foothold in the country.

Sen. Mitch McConnell, R-Ky., said the agreement would help U.S. businesses compete on a level playing field internationally.

"It would help create American jobs. And it would help our relationship with an important ally in Latin America," McConnell said Wednesday.

Colombian President Juan Manuel Santos was expected to meet with Obama in Washington Thursday to formally agree to the deal.

The U.S. signed the agreements with Colombia, Panama and South Korea in 2007 under President George W. Bush. But the then-Democratic-led Congress never brought the agreements up for vote, giving the Obama administration time to renegotiate areas it found objectionable.

The key U.S. concerns in negotiating the Colombia pact focused on high rates of violence against Colombian labor union leaders and insufficient protections for workers' rights. Under the new agreement, the Colombian government will phase in an action plan throughout the year aimed at increasing protections for labor.

The measures include:

— Expanding by April 22 the scope of existing protections to help union leaders protect labor activists, workers trying to join unions, and former union activists who may be threatened because of past activities.

— Reforming Colombia's criminal code by June 15 to criminalize and penalize actions or threats that could limit workers' rights, including the right to organize.

—Directing Colombia's National Police to assign 95 full-time investigators to support prosecutors handling cases involving crimes against union members by December.

The administration urged U.S. labor organizations, many of whom have been reluctant to back the Colombia deal over concerns about workers' rights, to reconsider their opposition to the deal based on the steps Colombia has agreed to.

Administration officials offered no timeline for sending the Colombia agreement to Congress, though they said they were confident the steps Colombia agreed to would lead to a favorable vote.

"We're going to engage with Congress on the issuing of scheduling and sequencing but that process has not yet been done," said Mike Froman, White House deputy national security adviser for international economic affairs.

News of the deal with Colombia won praise from the business community.

Tom Donohue, president of the U.S. Chamber of Commerce, applauded Obama and Colombian President Juan Manuel Santos for their "courage and pragmatism" in striking the accord.

"This proves the United States can still lead on trade," Donohue said. "The Chamber will work closely with the White House and Congress to secure approval of the three pending free trade agreements in the weeks ahead."

Obama has made trade a central part of his economic agenda, in part because he sees it as a way to boost U.S. exports and jobs, and because it's an area where the administration believes it can get Republican support. Republicans have generally supported trade agreements.

The president has set a goal of doubling U.S. exports by 2015, in part by entering into new trade agreements.

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