COLOMBIA SIGNS FREE-TRADE AGREEMENT WITH THE U.S.

Colombia's government finished negotiations with the US, joining Peru as the second country to sign the Andean Free Trade Agreement (AFTA). Colombia sought to maximize its role as a key US military and political ally, holding intense negotiations throughout February. The US and Colombia announced an end to negotiations on Feb. 27, with many agricultural-industry heads and editorial writers in Colombia expressing dismay at the concessions their government had made. Government spokespersons praised the deal as an opportunity for large economic growth in both nations.

Peru and Ecuador were also part of AFTA talks, with Peru unilaterally completing its deal with Washington in December (see NotiSur, 2006-01-13) and Ecuador still conducting negotiations. Bolivia has been attending talks as an observer, but it will not be able to enter into AFTA, and, if the newly inaugurated government of President Evo Morales wants an agreement with the US, it will have to negotiate bilaterally (see NotiSur, 2005-05-20). Soy producers in Bolivia have strong fears that the AFTA deal will cut off their ability to sell to the US market, and they are pressuring Morales, an avowed socialist, to negotiate a free-trade agreement (FTA) with Washington.

The opening of market access for Peru and Colombia has put pressure on industries in smaller economic powers like Ecuador and Bolivia, although broad popular opposition in those nations could play a greater role in blocking agreements.

Colombia holds on to mostly duty-free access to US market

The US and Colombia finally resolved difficult farm issues that kept negotiations going for nearly two years, both countries said. The pact, which must be approved by both congresses, strengthens economic ties between Washington and Bogota, which already receives billions of dollars in US aid to fight leftist insurgents linked to the Andean country's cocaine trade.

"The agreement will help foster economic development in Colombia, and contribute to efforts to counter narco-terrorism, which threatens democracy and regional stability," said US Trade Representative (USTR) Rob Portman in a statement. It also "will generate export opportunities for US agriculture, industry, and service providers, and help create jobs in the United States."

Ecuador, Peru, and Colombia have duty-free access to the US market for most of their goods that expires at the end of this year. The deal with Colombia, like the one with Peru, locks in and expands that duty-free access.

In exchange, Colombia will immediately eliminate tariffs on nearly 82% of US industrial goods and phase out the rest over ten years. Many US farm and food products, like high-quality beef, cotton, wheat, soybeans, apples, peaches, and frozen French fries, also get immediate duty-free...

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