Bullying Latin America
by Eric Farnsworth, Council of the Americas
and Gary Clyde Hufbauer, Peterson Institute for International Economics
Op-ed in the Baltimore Sun
August 2, 2007
© Baltimore Sun
The spirit of Teddy Roosevelt is back in Latin America, and it's not a pretty sight. Despite repeatedly warning against the pitfalls of turning away from our own hemisphere, Congress is nonetheless rapidly lining up behind an updated version of Roosevelt's credo, urging the United States to "speak loudly and carry a whip."
Exhibit A: the trade agenda. President Bush's power to "fast track" trade deals has expired, without much hope for renewal before 2009. The current round of World Trade Organization talks is moribund, thus killing any possibility for a revival of Free Trade Area of the Americas negotiations. The farm bill and its massive agriculture subsidies will soon be reauthorized. About the only bright spot for those who believe the United States supports trade as a critical component for regional development is the possibility that Congress will soon pass trade agreements with Panama, Peru, and Colombia. But now even these small steps are in question.
After long hours of negotiation, the White House and Capitol Hill fashioned a compromise in May on the primary sticking point: the role of labor issues in US free trade agreements. Under the compromise, the United States and its foreign partners will both affirm their commitments to the International Labor Organization's 1998 Declaration on Fundamental Principles and Rights at Work. Although essentially a deal between Republicans and Democrats, the bargain has been accepted by all three prospective Latin American free trade partners with the United States.
But despite such solid progress, Congress has now thrown a wrench in the deal. Leaders are insisting that Peru's congress rewrite its labor laws to ensure conformity with the International Labor Organization's declaration before Congress will consider the US-Peru agreement.
This is not really the right approach for dealing with good friends in Latin America.
The normal course of US enactment of a free trade agreement has five steps, all carefully orchestrated, before such an agreement can take effect: (1) agreement between the US trade representative and the foreign trade ministry; (2) notification of Congress; (3) signature by or on behalf of the president; (4) ratification by Congress and the foreign legislative body; (5) detailed monitoring by the US trade representative to ensure that foreign laws have been amended to comport with the terms of the free-trade agreement. Only then does the agreement enter into force.
The right way to oppose the agreements would be simply to vote against them. Asking foreign legislatures to pass politically sensitive domestic legislation before a vote in the US Congress—without a guarantee that the trade agreement would be passed or even be brought up for a vote—is an unnecessary departure from past practice, because the agreements would not go into force (even after a favorable vote) until all domestic legal adjustments were made. It also provides fodder for regional leaders who decry the traditionally heavy-handed US approach to Latin America.
But at least Peru and Panama can see a way clear to a vote, possibly this summer but more likely in autumn. For its part, Colombia, arguably our closest friend in South America, has been told by congressional leaders that they cannot support a deal "at this time." Unfortunately, opponents of the Colombia agreement have positioned it as a "reward" that Colombia does not "deserve," rather than what it truly is: a critical vehicle to assist the Colombian people to defeat the scourges of narcotics trafficking and the vicious violence of unreconstructed guerrillas.
Importantly, the Colombia free trade agreement would also open a market to US exports that has been closed, despite the fact that the US market is open to Colombian goods. Rather than a reward for Colombia, this deal is a critical building block of US strategic interests in the region.
Coming hard on the heels of the defeat of immigration reform in the Senate, which was a significant blow to Central America and the Calderon administration in Mexico—a friendly government that barely won a hotly contested vote against a firebrand, anti-US populist—the reluctance to move the trade agreements with alacrity is causing our allies in the region to evaluate whether the costs of friendship with the US outweigh the benefits. This is a difficult and unnecessary position for us to be in, and it is completely of our own making.
And our self-appointed opponents in the region, the only ones who will win if we continue along the current path, are busy licking their chops.