Columbian Free Trade Debate

Colombian flower exports, which represent about 60 percent of flowers sold in the U.S., currently enjoy duty-free access to U.S. markets under the Andean Trade Preference and Drug Eradication Act (ATPDEA). That act is set to expire on Dec. 31, 2008.

If it is not renewed, or if Congress does not approve the U.S./Colombia FTA sent by President Bush on Monday, U.S. floral importers of record will have to pay duties on Colombian flowers entering this country. Under federal law governing implementation of the U.S./Colombia Free Trade Agreement (FTA), Congress now has 90 legislative days to vote for or against the measure.

Currently, the FTA is embraced by the National Association of Manufacturers and the National Chamber of Commerce. Anti-trade Democrats already oppose the pact because they believe the Colombian government has not done enough to reduce violence in the country, especially against trade unionists. Thus, the issue has become a political hot potato.

From an economic perspective, however, a Colombia FTA is in the best interest of both countries. It eliminates tariffs and strengthens the rights of American exporters while giving Colombians predictability in their relationship with us, their largest trading partner.

This agreement would give our exporters the same duty-free access to the Colombian market. It creates an even playing field for U.S. businesses, farmers and workers who now pay hundreds of millions of dollars in duties on their exports to Colombia each year—duties that will be eliminated with the FTA. This agreement also increases investor rights, strengthens the rule of law and reinforces Colombia’s democracy and stability.

For a brief (3-page) summary of the agreement, click here.

Weak dollar affects flower imports

A recent article in the Houston Chronicle recently highlighted the plight of the Columbian flower industry in the wake of the devaluation of the dollar in the U.S. Since 6 of every 10 flowers sold in the U.S. hails from Columbia, Columbian flower profitability is extremely sensitive to demand impacts caused by the economic slowdown stateside. As a result, the income (in pesos) of Columbian growers has plummeted in spite of their worldwide exports increasing to $1 billion last year. About a dozen large Columbian flower farms have closed in the past 3 years, eliminating about 15,000 jobs. For the complete story, click here.