Yesterday the US congress approved the Free Trade Agreement (FTA) with Colombia. This agreement will need to be ratified by President Obama, and will enter in effect by August 2012. In the meantime, the sobering reality of the FTA is expected to hit the most vulnerable sectors in Colombia, affecting lots of millions negatively. The full magnitude of its impact might take some time to assess and evaluate, but at this moment there are already some obvious losers and winners.
On the winner’s side, US based multinational corporations will benefit from favorable treatment, guarantees and protections that safeguard their investments, and eliminate tariffs and other trade barriers. Alongside those are the key sectors of the Colombian economy that for a number of years have become dominant: chiefly the finance-insurance-service triangle. This triangle is the most integrated with global capital. Sectors from the textile, leather, and local assembly industries are expected to do well. The exports of bananas, flowers, and African palm oil will not be affected.
Losers are expected to include small producers in rural and urban areas, and small farmers. These will certainly constitute a reservoir of “crises” for the insurgency and organized crime to draw upon. In other words, the FTA, in spite of benefitting a few winners, might generate enough violence amongst to the greater number of losers, which could erode the economic gains of everyone!
For recent NACLA articles on the U.S.-Colombia FTA, see “Congress Prepares for U.S.-Colombia FTA Vote: Producers Expect the Worst“, “Buenaventura, Colombia: Where Free Trade Meets Mass Graves” or “The Colombia FTA: Only Corporations Win.” For more from Nazih Richani’s blog, Colombian Cuadernos, visit nacla.org/blog/cuadernos-colombianos, or see the NACLA Report July/August 2009, “Coercion Incorporated: Paramilitary Colombia.”
