Reasons for a Free Trade Agreement with Colombia

Video Transcript of Under Secretary Christopher Padilla

Hello and thank you for listening. Here in Washington, we’re engaged in a debate about whether or not Congress should approve a pending free trade agreement between the United States and Colombia. Now there are many reasons why the Colombia free trade agreement makes sense for America. It makes sense for our national security, to strengthen a relationship with a key ally in the Western Hemisphere that’s busy fighting an active terrorist insurgency on its own territory while remaining true to democracy and free markets. It’s a country that’s made remarkable progress in reducing poverty, increasing economic growth, cutting violence and terrorism and kidnappings. But there’s a very strong economic argument for this agreement as well. It’s not widely known, but the United States already has free trade with Colombia – but it’s one-way free trade. Beginning in the 1990s and continuing until today, Congress has routinely and overwhelmingly voted to throw open the U.S. market to Colombian products as a way to help that country fight the drug lords and to reduce poverty in Colombia. But as a result, almost all Colombian products come into our country duty-free, without paying any tariffs. And it’s been that way for quite some time. In fact, if you remember any numbers from my remarks today, remember just these: 92, 16, and 365. Ninety-two percent of all Colombian products come into the United States today and pay absolutely no tariffs – they enter our market for free. It has been that way for 16 years since Congress first passed the Andean Trade Preference Act as a way to help that country develop its economy and fight the drug trade. And 365 is the number of Members of Congress from both sides of the aisle who voted to renew this program overwhelmingly the last time it was up for a recorded vote. The result though is an unbalanced and one-way trade relationship. And if you don’t believe me, I’ve brought today a shopping bag of products to help illustrate the point.

Many of us probably drink Colombian coffee. I had some for breakfast this morning. This Colombian coffee comes into the United States duty-free; it pays no tariff at our border. And it’s been that way for quite some time. But this bottle of soda, made in the United States, and exported to Colombia, pays a twenty percent tariff when it enters that country. Zero percent coming into America, twenty percent for the U.S. product going into Colombia. That’s just one example. These Colombian flowers – Colombian flowers are a major export from that country – come into our market and pay absolutely no tariffs at all. But this U.S.-made fertilizer, which is exported to Colombia to help those flowers grow, pays a stiff fifteen percent tariff when it’s sold in that country. Now, these carrots come into our market and onto your dinner table pay absolutely no tariff and they are imported from Colombia. But this tractor, made in East Peoria, Illinois, with U.S. parts and components by U.S. union labor, pays a stiff ten percent tariff when it’s sold to a Colombian carrot farmer. An apple, grown in Pennsylvania, has to pay fifteen percent when it’s sold into Colombia, but a banana grown in Colombia pays zero when it comes into the United States. Now Ladies and Gentlemen, even the paper bag containing my examples, has to pay a tariff if it’s sold to a grocery store in Colombia. Now, I bet you’re thinking that this isn’t fair – and you’d be right. But the good news is that we have a terrific coupon in our bag; it is a coupon that would eliminate almost all of the taxes on our products immediately upon going into effect. And that coupon is called the Colombia Free Trade Agreement, and it deserves a vote in the Congress of the United States. Thank you very much for listening.