A top Colombian trade official is in Utah to garner support for a free-trade agreement between the South American country and the U.S.
During a visit Tuesday with the Deseret Morning News editorial board, Eduardo Munoz, Colombian vice minister of foreign trade, said that if Congress endorses the U.S.-Colombia Trade Promotion Agreement, Utah exporters stand to benefit.
Munoz said Utah companies export $6.8 billion, including $6.7 million to Colombia, mostly in the form of machinery, computers/electronics and industrial goods. But tariffs remain a huge financial barrier. The Colombian tariff on machinery, for example, is 11.1 percent. Full implementation of the agreement would mean zero duties on those products.
"I don't have any specific figures as to how exports from Utah would react, but we hope that with zero duties on all of those exports, trade would work its way into a market that is growing, where import demand is very solid and where there would be no duties," Munoz said.
The agreement would kill duties on many U.S. exports to Colombia immediately, with many others phased out over time. More than 90 percent of all Colombian exports already enter the U.S. duty-free. U.S. exports topped $6.7 billion in 2006 and Colombia is the 14th-largest export market for U.S. farmers' and ranchers' products.
Colombia's import demand is growing faster than any other country in the region except Venezuela, and Colombia's population grew nearly 8 percent last year.
"With import demand growing as rapidly as it is, it would stand to reason that we would import more from the U.S., because the U.S. is the main provider of imports for Colombia anyway," Munoz said. "If you add to that equation the preferential treatment that U.S. goods would get in the Colombian market, then it also stands to reason that the U.S. would export more to Colombia as a result of the (agreement)...What people see is that, indeed, a new market would be open to U.S. goods and services a market that is not open today in a preferential way."
Some Americans fear that free-trade agreements will result in the loss of U.S. jobs, but Munoz disagreed. "Very few jobs are going to be lost by allowing Colombian imports, because you already do allow those, but more jobs will be created by exporting with preferential access to the Colombian market," he said. "That's what it amounts to."
But Munoz acknowledges that the trade and economic aspects of the agreement yield few complaints. The holdup with the agreement tends to focus on social or governmental issues, including violence against union leaders in Colombia. A recent letter from seven congressmen to the Canadian Labour Congress called the agreement unacceptable because of the murders of Colombian labor leaders, government corruption issues and other factors.
Munoz said President Alvaro Uribe is cracking down on violence in general and specifically violence against labor leaders. The country, with financial backing from the U.S., also is stepping up the protection of at-risk people.
Munoz believes he will be able to build support for the agreement while in Utah. Gov. Jon Huntsman Jr. is supporting free-trade agreements with Colombia, Panama, Peru and Korea.
Munoz and others will speak about the Colombian pact from 8 a.m. to 12:30 p.m. today at the Salt Lake Chamber in an event hosted by the U.S. Chamber's TradeRoots trade-education program.
Kathleen McInerney, associate manager of TradeRoots, said many legislators understand the positives of the Colombian agreement, but the public does not."It's more about educating the public about really what trade means and how it does boost your income," she said. "What you hear are the negative stories. You don't often hear the stories like... small businesses that are really excelling at exporting and how they're able to hire so many more people because of that."
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