[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
THE COLOMBIA AND PANAMA FREE TRADE
AGREEMENTS: NATIONAL SECURITY AND
FOREIGN POLICY PRIORITIES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
THE WESTERN HEMISPHERE
OF THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
MARCH 17, 2011
__________
Serial No. 112-17
__________
Printed for the use of the Committee on Foreign Affairs
Available via the World Wide Web: http://www.foreignaffairs.house.gov/
______
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COMMITTEE ON FOREIGN AFFAIRS
ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey HOWARD L. BERMAN, California
DAN BURTON, Indiana GARY L. ACKERMAN, New York
ELTON GALLEGLY, California ENI F.H. FALEOMAVAEGA, American
DANA ROHRABACHER, California Samoa
DONALD A. MANZULLO, Illinois DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California BRAD SHERMAN, California
STEVE CHABOT, Ohio ELIOT L. ENGEL, New York
RON PAUL, Texas GREGORY W. MEEKS, New York
MIKE PENCE, Indiana RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina ALBIO SIRES, New Jersey
CONNIE MACK, Florida GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas DENNIS CARDOZA, California
TED POE, Texas BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania KAREN BASS, California
TIM GRIFFIN, Arkansas WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
VACANT
Yleem D.S. Poblete, Staff Director
Richard J. Kessler, Democratic Staff Director
------
Subcommittee on the Western Hemisphere
CONNIE MACK, Florida, Chairman
MICHAEL T. McCAUL, Texas ELIOT L. ENGEL, New York
JEAN SCHMIDT, Ohio ALBIO SIRES, New Jersey
DAVID RIVERA, Florida ENI F.H. FALEOMAVAEGA, American
CHRISTOPHER H. SMITH, New Jersey Samoa
ELTON GALLEGLY, California DONALD M. PAYNE, New Jersey
C O N T E N T S
----------
Page
WITNESSES
The Honorable Christopher A. Padilla, vice president,
Governmental Programs, IBM Corporation (former Under Secretary
for International Trade, U.S. Department of Commerce).......... 4
The Honorable James R. Jones, U.S. Congressman (retired),
partner, ManattJones (former U.S. Ambassador to Mexico)........ 12
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Christopher A. Padilla: Prepared statement......... 7
The Honorable James R. Jones: Prepared statement................. 14
APPENDIX
Hearing notice................................................... 28
Hearing minutes.................................................. 29
The Honorable Connie Mack, a Representative in Congress from the
State of Florida, and chairman, Subcommittee on the Western
Hemisphere: Prepared statement................................. 30
The Honorable David Rivera, a Representative in Congress from the
State of Florida............................................... 32
The Honorable Albio Sires, a Representative in Congress from the
State of New Jersey: Prepared statement........................ 34
THE COLOMBIA AND PANAMA FREE TRADE AGREEMENTS: NATIONAL SECURITY AND
FOREIGN POLICY PRIORITIES
----------
THURSDAY, MARCH 17, 2011
House of Representatives,
Subcommittee on the Western Hemisphere,
Committee on Foreign Affairs,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:07 p.m., in
room 2172, Rayburn House Office Building, Hon. Connie Mack
(chairman of the subcommittee) presiding.
Mr. Mack. The subcommittee will come to order. First I
would just like to say that I appreciate so much those that are
in attendance, the witnesses, the members who are here.
Obviously, it is a third day. We have votes today coming up.
Members will be leaving tonight and tomorrow, so we are going
to try to move quickly through the hearing, although I think
this is such an important hearing that it is my intention to
find another time when we can also maybe continue this hearing
or have another hearing on the same set of issues.
After recognizing myself and the ranking member, or Mr.
Sires in this case, for opening statements, I will recognize
each member of the subcommittee for 2 minutes. I would ask the
members that if they wish to forego their opening statements or
shorten them, that would be greatly appreciated so we can get
to our witnesses, but it is your choice. I don't want to take
away your opportunity to be heard on this as well.
We will then proceed directly to hearing testimony from our
distinguished witnesses. The full text of the written testimony
will be inserted in the record. Without objection, members may
have 5 days to submit statements and questions for the record.
After we hear from our witnesses, individual members will
be recognized for 5 minutes each to question our witnesses. The
chair now recognizes himself 5 minutes, and following my own
direction, I will forego my opening statement, will place it
into the record, but I just would like to say that the free
trade agreements in Panama and Colombia represent much more
than just trade agreements.
These agreements represent in my opinion, or the lack of
agreements to this point, represent in my opinion a failed
foreign policy by this administration, that we are missing
opportunities to lead, we are missing opportunities to create
alliances with allies who count on the United States'
friendship to help in their countries, which has a direct
impact on our own economy and our national security.
And so I am very concerned that the administration in its
trip to Latin America has decided to forego Panama and
Colombia. I think there is nothing more important that the
administration can do right now than to show its support to our
allies in Latin America. And the best thing the President could
do is, either on the way to Latin America or when he gets back,
to announce that he is going to send the free trade agreements
to the Congress for passage.
The old tired excuses about we are not sure if we have the
votes in the House are wrong. The votes are here. We can pass
the free trade agreements. And I think that it is time that the
President, the administration, gets serious about foreign
policy and recognizes that you can't lead or be a leader if you
don't know what it is you stand for. And I am not sure that the
administration knows what it stands for when it comes to
foreign policy.
Mr. Sires is recognized for 5 minutes.
Mr. Sires. Thank you, Mr. Chairman. As someone who has
since I got here promoted the trade agreement with Colombia, I
agree that we are missing an opportunity that is very
important. I was one of the co-sponsors of a letter last year
to the President with Congressman Dreier in trying to get the
administration to put forward the Colombia trade agreement. I
certainly think it is an important step for this country.
I think that Colombia has been more than a friend to this
country, and we need friends in that region. I felt that they
have worked tirelessly with this country, including when we
wanted to put the Iranians on notice about their nuclear
program.
So I am truly supportive of this agreement. I will be very
brief so we can get this hearing, and I appreciate the chairman
holding this hearing. We share a lot of opinions together in
terms of Colombia and Panama. Thank you very much, Mr.
Chairman, for holding this hearing.
Mr. Mack. Thank you very much. Mrs. Schmidt is recognized
for 2 minutes for an opening statement.
Mrs. Schmidt. Thank you, Mr. Chairman. And I will be brief.
I echo your sentiments that it is failed foreign policy, failed
economic policy, and failure with our friends down in Latin
America. I can only echo that Colombia under President Uribe
was stable, he turned the country around. Santos is following
in his footsteps.
In Panama, it is not only stable, but the widening of the
canal is only going to open up economic opportunities for the
U.S. When you look at the benefits that we would get under
Colombia, 80 percent of U.S. exports of consumer and industrial
products to Colombia, 90 percent to Panama, this is a no-
brainer. We really need to get on with these free trade
agreements, and I hope that the President does that when he
enters this trip at the end of this month.
Mr. Mack. Thank you, Mrs. Schmidt. And Mr. Meeks is
recognized for 2 minutes if he has a wish to make some
comments.
Mr. Meeks. Thank you, Mr. Chairman. I want to thank you
also for conducting this hearing. And I think that unlike some
other issues that we have to deal with here in the United
States Congress, you will find that this is an issue where we
can have some bipartisanship, that it just simply means that we
just got to sit down and think rationally. And when you do then
you really begin to understand the benefits of us making sure
that Panama and Colombia are passed. Because truly it is
beneficial for both sides and our entire hemisphere. Truly, it
just makes sense when you look at Colombia and Panama, great
friends and allies of the United States and who have each made
tremendous strides on their own governments in trying to make
sure that they have turned a corner there. And for us, you
know, it is simple to me that they have access to our markets
and we don't have access to theirs. And so it just seems to me
it would help us create jobs and should be a part of the
President's export initiative. And I am hopeful for the first
time in a very long time that in short order we will be able to
get a bipartisan free trade agreement with Colombia and Panama
passed.
And I thank you, gentlemen. I wait to hear from you. And
again, I thank the chairman for conducting this hearing. I
think it is beneficial and will help us get down the road.
Mr. Mack. Thank you, sir, very much. Mr. Rivera from Miami
is recognized for 2 minutes.
Mr. Rivera. Thank you so much, Mr. Chairman. Thank you for
holding this hearing. And thank you to the witnesses who are
going to be presenting. I think it is important as we go
forward to discuss every opportunity possible to make sure that
Colombia and Panama are linked to the greatest extent that we
can with the South Korea Free Trade Agreement. It is important
that if you support free trade that the world know that we
support all free trade, not just South Korea, but also Colombia
and Panama, and that these free trade agreements be seen as a
package. I think it is unfortunate that in the upcoming trip
that President Obama is taking to Latin America he is not
including stops in Colombia and Panama, two of our best allies
in the region, two allies where not only there are mutual
economic security interests, but national security interests.
And I would hope as the President is embarking on his trip and
conducting his trip while he is in Latin America that he makes
sure not to shun them, at least in his public pronouncements on
free trade. Because passing the Colombia free trade agreement,
for example, is of utmost importance to moving our economy
forward, creating jobs. It will eliminate trade barriers and
immediately boost U.S. exports. In fact, U.S. GDP would
increase by roughly $2.5 billion and exports would increase by
over $1 billion, which would create thousands of jobs in the
United States.
While we are languishing in our commitment and dedication
to free trade with these countries, the European Union and
Canada have been promoting it quite vigorously and they are
doubling and tripling their business with Colombia in the
region. And I think this administration should take note of
those movements. This would be important to make positive
policy gestures toward our allies and making sure that Latin
America knows we are enthusiastic about doing business with our
allies.
So I would just close by saying it is important to make
sure that the message is sent that we approve all three trade
agreements as a package; South Korea, Colombia and Panama.
Mr. Mack. Thank you, Mr. Rivera. I would now like to
introduce our witnesses. And again thank you so much for your
patience in being here. First, the Honorable Christopher
Padilla. Mr. Padilla served as Under Secretary for
International Trade at the U.S. Department of Commerce. Prior
to serving as Under Secretary, Padilla was Assistant Secretary
of Commerce for the Export Administration, where he oversaw
U.S. regulations governing the exports of items controlled for
national security reasons. Currently Mr. Padilla serves as vice
president of IBM, where he leads the company's Global
Government Affairs Program and manages a team of professionals
in more than 30 countries. Thank you so much for being here.
And second, the Honorable James Jones, a former
Congressman, a former Ambassador to Mexico. During his service
in Mexico, Ambassador Jones was very successful in his
leadership during the Mexican peso crisis, the passage and
implementation of NAFTA, and in developing new cooperative
efforts to combat drug trafficking. He also assisted U.S.
businesses with commercial ventures in Mexico. Ambassador Jones
provides business development advice and consulting for clients
primarily in Mexico and Latin America.
Thank you both for being here. Mr. Padilla, you are
recognized for 5 minutes.
STATEMENT OF THE HONORABLE CHRISTOPHER A. PADILLA, VICE
PRESIDENT, GOVERNMENTAL PROGRAMS, IBM CORPORATION (FORMER UNDER
SECRETARY FOR INTERNATIONAL TRADE, U.S. DEPARTMENT OF COMMERCE)
Mr. Padilla. Thank you, Mr. Chairman, members of the
subcommittee, for holding this hearing. I am honored to be here
and honored to be on a panel with Ambassador Jones. In 2007,
Mr. Chairman, I was serving as Under Secretary of Commerce, and
I traveled with then Secretary Gutierrez and a bipartisan
congressional delegation, including Mr. Meeks, to Medellin,
Colombia. And as we got off the plane at the airport in
Medellin I saw a line of armored SUVs waiting on the tarmac to
take us into the city, and I confess, all I could think of was
the scene from the movie, ``Clear and Present Danger,'' where
Harrison Ford's convoy of U.S. Government officials in white
SUVs gets ambushed in the streets of a Colombian city. I was a
little nervous. And in my SUV, I don't know about yours, Mr.
Meeks, I had a couple of Members of Congress who shall remain
nameless, it was a bipartisan group, and they weren't saying
anything either, so I think maybe we were all nervous.
But as we drove into town at dusk we saw people crowding
into busy sidewalk cafes, we saw excellent infrastructure, we
saw families walking through parks with their children, and it
was not the Colombia of the movies, nor the caricature that at
least I had in my mind. What I was seeing was a country
transformed. And in Colombia today terrorism and violence are
being replaced by the rule of law, a huge investment in
education and free markets. Colombia has strengthened its labor
laws, it has cracked down on violence against unionists, and
last year it was removed from the ILO's list of countries
subject to labor rights monitoring. The increase in security
has been so dramatic that today, a resident of the District of
Columbia is eight times more likely to be murdered than a trade
unionist in the country of Colombia. And far from being
persecuted, Colombian labor unions are growing and they are
growing fast, faster than any other country in the hemisphere
with labor union membership, growing by 75 percent in the last
7 years.
But our dialogue here in Washington seems stuck in the
past. We seem not to recognize this progress. Most notably in
recent months the White House has stated it wants to move
forward, but it has also said that there are further
unspecified labor concessions from Colombia that will be
needed. I am frankly not sure what more we can ask from this
good friend and ally.
The second point I want to make is that the United States
already has free trade with Colombia and Panama, but it is one-
way free trade, or at least it was until the ATPA recently
expired. A can of Colombian coffee comes into this country duty
free, and it did for 19 years under the Andean Trade
Preferences Act. But a computer server made by IBM in the U.S.
pays a 5 percent tariff when we sell it in Colombia. Even Lou
Dobbs I think could love this trade agreement, Mr. Chairman,
because it rectifies what is an unbalanced, one-way free trade
relationship, and it is all good for the United States.
The third point I would make is that Colombia and Panama
both stand out as shining examples of the success of U.S.
foreign policy. In 1999, then Speaker Hastert and then
President Clinton worked together on a bipartisan basis to
create Plan Colombia, and since then Colombia has leveraged
more than $7 billion in U.S. assistance to fight terrorism and
drugs and to protect human rights. As a result, the FARC
terrorists have been largely defeated. Coca production is down
by 40 percent. Just a few weeks ago Colombia came off the U.N.
Drugs Watch List. Who would have thought a decade ago that we
would see such progress? All done while maintaining a vibrant
commitment to free markets and democracy.
Surely, this is the model that we hope other countries,
including in the Middle East, will follow to maintain a
commitment to democracy in free markets even as they defeat a
terrorist insurgency and deal with insecurity on their own
borders.
What message does it send to the region if we turn our back
on these allies despite their commitment to democracy, security
and free markets? I fear, Mr. Chairman, that any continued
delay would only embolden those who have a different and darker
and non-democratic vision for this hemisphere.
Mr. Chairman, America is falling behind in its economic
engagement in this hemisphere. As Mr. Rivera and Mr. Sires both
noted, Chinese investment in the region is increasing. The EU
and Canada both have free trade agreements with Colombia and
Panama. When Mercosur signed an agreement with Colombia
recently, U.S. exports of agricultural products to Colombia
dropped by half because they were replaced by Argentine and
Brazilian exports.
There is no more time to waste. Mr. Chairman, these
countries are not the same countries they were even back in
2007, or certainly the ones they were at the end of the 1990s.
Their progress should be recognized. The economic case for a
close relationship with these neighbors is compelling, and it
is immediate. In enhancing or embracing a fuller partnership
with Colombia and Panama, we serve not only our own foreign
policy interests, but we set an example for others in the
Western Hemisphere and the world to follow.
Thank you very much, Mr. Chairman.
[The prepared statement of Mr. Padilla follows:]
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Mr. Mack. Thank you, Mr. Padilla. Ambassador Jones, you are
recognized for 5 minutes.
STATEMENT OF THE HONORABLE JAMES R. JONES, U.S. CONGRESSMAN
(RETIRED), PARTNER, MANATTJONES (FORMER U.S. AMBASSADOR TO
MEXICO)
Mr. Jones. Thank you very much, Mr. Chairman. It is a
particular honor to testify here today. Your father, back when
I was House Budget Committee chairman, was a valuable member of
that committee and a friend, and I am delighted that you would
invite me to testify here.
My experience in trade goes back to 1973 when I first came
to Congress. And during my 14 years in Congress I was on the
Trade Subcommittee of Ways and Means that whole time. Then
going to New York as CEO of the American Stock Exchange and
developing both for our companies and for the relationships
with the developing markets of Latin America, Asia and Africa.
And then as Ambassador to Mexico before, after and in the
implementation of NAFTA. And most recently the 12 years I have
been CEO of ManattJones Global Strategies, our firm takes
companies based in the United States into developing markets of
Latin America and opens the markets, et cetera. And I found
where trade can be helpful and trade can be unhelpful in doing
business for American firms.
Now, I don't believe that free trade agreements solve all
the problems, and I must admit that many of us who have
testified on behalf of NAFTA, et cetera, perhaps overstated the
benefits to be projected. But I think it is indisputable that
the free trade agreements the United States has made has been
to the benefit both in the United States and our trading
partners.
The common benefits are that (A) we, U.S. exports increase
in every instance. For example, Mexico was sort of an
afterthought as a trading partner before NAFTA and now it is
the second largest market for U.S. goods and services. The net
job increases both in the United States and in our trading
partner is indisputable. And what is also interesting,
particularly in NAFTA, is that the jobs that are NAFTA-related
in the United States pay on average almost 20 percent more in
wages than non-NAFTA or nontrade international jobs in the
United States.
The intangible benefits are also very important to the
United States and to United States business, and I particularly
found this true in NAFTA. Doing business in Mexico for a U.S.
company before and after NAFTA is the difference of night and
day. The NAFTA regulations, the NAFTA requirements, are such
that you rarely, if ever, are approached with something that
would be a crime in the United States when you are doing
business for a NAFTA country.
So I think those are all common things that free trade
agreements bring to our country. Not all trade agreements are
alike and not all of them should require the same kind--some of
them should require much more scrutiny, but I don't believe
that these two trade agreements with Colombia and Panama fit
that concern for several reasons.
Number one, as has been mentioned, we currently have great
trade advantages, and those advantages are being eroded because
the United States has dallied while other countries have made
free trade agreements throughout Latin America and have cut
into our market share.
Secondly, the exports and the imports with both Colombia
and Panama are complementary and not competitive with the
United States economic interest. For example, the U.S. has
trade surplus in manufactured merchandise with both countries.
Now, that is something that is very unusual. We have always had
a services component surplus, but always a manufacture
component deficit. We have surpluses with both Colombia and
Panama. Neither Colombia nor Panama exports to the United
States items that diminish job creation in the United States.
In fact, it is just the opposite. The vast majority of
imports to the United States from Colombia and Panama are oil,
coffee, precious stones, cut flowers, fruits, prepared goods,
seafood and gold. Those are not competitive with what we are
producing in the United States.
And fourth, the major U.S. exports to Colombia and Panama
are machinery, aircraft, yarn, fabric and such agricultural
products as wheat, corn, rice, and to a lesser extent pork and
beef. So the U.S. has many advantages, but those are being
diminished as we dilly and the other countries establish free
trade agreements. The United States in the late 1990s and in
the first decade of this century lost some very big
opportunities to strengthen our ties with our Western
Hemisphere neighbors. After the fall of communism, Latin
America embraced free market economics and honest, competitive,
open democracy, as well as making small strides toward the
improvement of the rule of law. Nearly every nation in Latin
America except Cuba admired and wanted to emulate the United
States. But we became, as a nation, distracted elsewhere and we
neglected attending to the needs and aspirations of our friends
in the hemisphere.
Now, these countries did not ask for foreign aid. What they
wanted was more trade and to be more a part of the economic
system of the United States. But both Democrats and
Republicans, here it is bipartisan, dropped the ball, and as a
result the perception throughout Latin America is one of
neglect and disinterest by the United States.
These two FTAs (free trade agreements), I think, can
strengthen our foreign relations in the hemisphere while at the
same time open new market opportunities for U.S. firms and can
add U.S. jobs. Rarely does Congress ever come up with a
proposal, that you have to study, that would be called a no-
brainer, as Mrs. Schmidt said. But these two free trade
agreements come as close to being no-brainers and should be
approved. They will have economic foreign policy and security
benefits for the United States.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Jones follows:]
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Mr. Mack. Thank you, Mr. Ambassador. We appreciate both
testimonies. And I am going to begin with the questions.
Mr. Rivera from Miami, you are recognized for 5 minutes.
Mr. Rivera. Thank you, Mr. Chairman. I want to try and
drill down on this issue of unresolved issues that I keep
hearing about with respect to Colombia. It was quite
disconcerting a few weeks ago when we had Assistant Secretary
of State for Western Hemisphere Arturo Valenzuela here
testifying, and he was asked specifically what are these
unresolved issues, and he was not able to respond. In another
meeting subsequent to that hearing with Trade Secretary Kirk, I
asked him the exact same question, and there were several
Congressmen present in that meeting, and he was unable to
respond. But I keep hearing this specter of the term
``unresolved issues.'' And I think that is just a code word,
those are code words for labor concerns, as I talk to some of
my colleagues here now.
My understanding is that the Vice President of Colombia is
a former union leader, is that correct, Mr. Padilla.
Mr. Padilla. Yes, that is my understanding, sir.
Mr. Rivera. It is also my understanding that he is very
supportive of this free trade agreement between the United
States and Colombia. So let's talk about some of these issues
of, drill down even further, labor concerns. I have heard
issues about death with labor leaders and labor members in
Colombia. But I was given some statistics recently that said
homicides against unions have declined by 83 percent since
2002, from 196 to 33 cases.
Can you speak a little bit to this issue of violence with
union leaders?
Mr. Padilla. Certainly. Maybe I can start. There is no
question that violence against labor leaders has declined
dramatically in Colombia. The homicide rate in that country
overall has dropped by half, kidnappings have dropped by 90
percent, and the country has made a special effort to protect
trade unionists. In fact, the country has a program on which it
spends about $360 million to provide protection details for
anyone who asks for them and can make the case that they need
it. And about 2,000 labor union leaders and about 10,000 judges
are under that program.
There is no question, Congressman, that in the past
Colombia has been a dangerous place. It is a place with a
violent history, it was subject to a violent terrorist
insurgency. But I think the evidence is clear that there has
not been, particularly in recent years, some sort of an effort
to target labor union leaders. In fact, I think just the
opposite; they have received more protection, and as a result,
the level of violence has declined quite dramatically.
Mr. Rivera. Go ahead, Mr. Jones, Ambassador Jones.
Mr. Jones. Just two comments. Number one, one of the
advantages of being around a long time is you get to see things
ebb and flow, and both political parties have to work out the
political issues of their own base, and so I think that is what
is going on ultimately. And I think before too long they will
come to the realization that the fact is, Colombia has made
great strides in protecting the unions. There is no question.
In fact, I was on the board of a major U.S. company and we had
an opportunity to buy the major beer company in Colombia not
too long ago. And the CEO said there is no way he would send
any of his people into Colombia because everybody was targeted,
and now a few years later it is much more improved.
So I would say, based upon an anecdotal from my time in
business primarily, that 10 or so years ago union leaders were
targeted. I don't think that is the case now, and I think the
Colombian Government actually is going the other way to
prosecute and to protect union people.
Mr. Rivera. It is also my understanding that the Colombia
Free Trade Agreement and its labor provisions are identical to
the Peru Free Trade Agreement, which had broad bipartisan
support, is that correct?
Mr. Padilla. Yes, it is correct, Congressman. It reflects
the May 10th agreement, so-called May 10th agreement, made on a
bipartisan basis between the then Bush administration and
Democratic leaders of Congress, and the language on labor and
environment in Colombia and Peru is identical.
Mr. Rivera. Well, I think that pretty much makes the case
that Colombia, and perhaps Panama as well, are being targeted
and tarnished unjustifiably by this administration and the
detractors of the Colombia Free Trade Agreement, which I think
just makes the argument even more forcefully that all three
trade agreements need to be treated as a package, because I
don't think Latin American countries, particularly strong
allies like Colombia and Panama, should be discriminated
against, which is why I think if they are not brought forward
as a package then South Korea should not go forward.
Thank you.
Mr. Mack. Thank you, Mr. Rivera. Mr. Sires is recognized
for 5 minutes for questions.
Mr. Sires. Thank you, Mr. Chairman. Ambassador Jones, I
couldn't agree with you more. I have seen myself a change in
Colombia the last few years. I travel just about every year to
Colombia with a group that raises money for an orphanage, and
every year that I go there I am amazed of the changes that go
on in the country. I also had a very interesting dinner with
one of the presidents of the colleges in Bogota, where during
the dinner he stated to me that the second most studied
language in Colombia today is Mandarin.
So to me that raised a red flag. Obviously China is a big
presence now in Colombia and increasing every year. So if we
don't move forward with this trade agreement as Colombia has
moved forward with the EU, Brazil, Canada and China, how would
this further neglect of this agreement affect the American
industries?
Mr. Jones. First of all, let me comment on your issue of
learning Mandarin. A very short time ago, just a few years,
China was the 19th or 20th trade partner of Colombia's and now
they are the second. And the projections show they will surpass
the United States as the largest trade partner unless we are
able to pass a free trade agreement.
But that is not the only one we are losing business to. We
are losing business to Argentina, Brazil, and the Mercosur
countries in agricultural products. And ADM has lost a
significant amount of business, for example, in wheat and corn
into Colombia.
So I think that, as I tried to point out in my testimony,
our trade with Colombia is very complementary. What they sell
to the United States are things that are not integral to the
United States and what we sell to Colombia is integral to the
United States and not to Colombia. So I think it is one of
those hand-in-glove type agreements that we ought to be
pursuing are passing.
Mr. Sires. I think last year Colombia signed a trade
agreement with Canada worth about $1,700,000,000 that we
probably lost out on.
Mr. Padilla, in your estimation, what is the roadblock,
other than obviously the unions? Because I am trying to find
out myself to see if I can unblock it.
Mr. Padilla. Well, I would associate myself with Ambassador
Jones' comments on this. I don't really think it is about labor
issues in Colombia. I think great progress has been made. I
think this is about the difficult domestic politics of trade in
the United States, candidly. And what I hope will happen is
that President Obama will take ownership of these two
agreements, as he did with the Korea agreement, to his credit,
in which he embraced that agreement, is prepared to submit it
to Congress, and I think it will get a very strong bipartisan
vote. There is no reason in my view that he couldn't and
shouldn't do the same with Colombia and Panama, and I hope that
he will.
I think that really is the issue. The reason that I think
Ambassador Valenzuela and Ambassador Kirk were not able to
answer your question is we have not told the Colombians what we
want. They have been asking for years and we have not told
them, and the reason is because of the political challenges of
dealing with this agreement in our own domestic politics.
Mr. Jones. I would just add to my friends on my side of
your aisle, and that is the reason I ticked off the products
that Colombia sells to us and the products that we sell to
them, it is in organized labor of the United States' best
interest to promote this because the jobs are in manufacturing,
in aircraft and various things, machinery and things like that.
And those are the products we are selling to Colombia and can
sell more of if indeed this free trade agreement passes.
Mr. Sires. Just to comment, I also attended the swearing in
of the new President, and to me it was disappointing there were
not people from the State Department there in support of the
President, of one of our friends getting sworn in. If it wasn't
for a delegation--and, you know, I mentioned this to the
Secretary of State when she was here--it was kind of
disappointing that we did not have a good strong delegation in
support of the new President in the direction that he is going
to follow, as he said, he is going to follow in the same
direction as Uribe. So it was disappointing. But we were there
though.
Thank you very much. Thank you very much for being here.
Mr. Mack. Thank you, Mr. Sires. Mr. Meeks is recognized for
5 minutes for questions.
Mr. Meeks. Thank you, Mr. Chairman.
Mr. Mack. If I may, I just want to say publicly that I
appreciate you being here. I know that you are no longer on the
subcommittee.
Mr. Meeks. Unfortunately.
Mr. Mack. Unfortunately for all of us. But your voice is
important, and so I appreciate you taking the time to be here.
Mr. Meeks. Thank you, Mr. Chairman. And the Western
Hemisphere is, though unfortunately the numbers do not prevail
so that I could be back on the subcommittee, but the work of
the subcommittee is important and your leadership is vital. And
even though my name is not on the official roster I think that
you will see me as a frequent visitor to this subcommittee and
the hearings that it has because the Western Hemisphere is
deeply embedded in my heart. So I will be participating as
often as I possibly can and as often as you will be willing to
put up with me.
Let me say that, first of all, I can't--there is not one
single thing that I have heard from either one of you that I
disagree with you. I think that we are all in lockstep in that
regards. And I think that even with my colleagues here we all
feel that we need to get this free trade agreement done, we
need to talk about and pass South Korea, but these two trade
agreements need not be left behind. I do think though that part
of what is challenging is the internal politics and in trying
to make sure that we pay attention to concerns that individuals
have. And I will tell you, politics says that trade is only
approved by 34 percent of the American public.
So we all have our work cut out, so that we can really tell
the American people the truth about trade, that basically our
trade agreements balances our trade deficits, doesn't cause
trade deficits. And when you look at the country that we have
trade deficits, it is generally around oil and those areas and/
or with China, who we really don't have a--we have an
agreement, but not the kind of trade agreement that we are
talking about here that makes sure that we have the opportunity
to go into other markets.
And so some of the fear that I believe that the vast
majority of Americans have with reference to trade agreements
is that we will lose jobs, and that is not true. We clearly
know that that is not true. If you just look statistically we
can get around the fear. People sometimes confuse trade
agreements with outsourcing. Those are two completely different
things. Trade agreements helps bring jobs. And I think that the
President is on the right track when he starts talking about
his export initiative. I think that we need to fix what we do
here also and give the American people the right perspective. I
think that we do need to pass TAA, for example, because
psychologically that helps the country, and puts them in a
better position to understand trade. And those who may lose
out, lose their job, and it might not even be from trade, but
lose their job, we are concerned about them working. So if we
pass TAA, I think that helps our argument and helps us move
forward in trying to remedy this.
And I also think that you know I have had a number of Latin
America countries come to me concerned that we haven't extended
the preference agreement. I think that is important. That sends
a message also. And I think that people should graduate from
the preference agreement to a trade agreement. That should be
the natural flow of things. That is the way--especially on our
hemisphere. They are our neighbors, and we need to change
policies. I don't care whether it is a democratic
administration or a republic administration. We are in the
post-Cold War era, so we need to think of Latin America in a
different way than we did when it was a Cold War.
And the best way to think of it differently is to make sure
that we begin to pass trade agreements where we become
interdependent upon one another; whether we can begin to share
and show respect to one other. And I think that as we look at
the countries that we have entered into trade agreements with,
that has happened. And I think that we miss a golden
opportunity if we do a trade agreement, and I am a big time
supporter of what we did with Peru, I was one of the major
proponents there, but then it becomes a slap in the face that
Colombia, who is just as big an ally to us, for us to pick and
choose and say, okay, we will do one with this one but not with
that one.
And so I think that is the frustration that is beginning to
set in with our Colombian allies. Why are we being picked on,
why are we different, you know, when we can do one with Chile,
how come you can't do one with us, you can do one with Peru,
how come you can't do one with us? And so I think that we have
got to get it done. I also think that there is times, and here
is where I think the challenge is for the current
administration. Every administration likes to put his or her,
we have only had he's, we would like to have a she sometime
soon also, but every administration likes to put their own
stamp on it so it looks like it reflects something they did or
didn't do. And I think that we are getting there.
I think that Ambassador Jones was absolutely right, that
now there is conversation that has taken place, and I am
hopeful that just as soon as we can do South Korea, that
immediately thereafter or right there at the same time, we will
be able to pull through with Colombia.
So I really don't have much of a question because I agree
with everything that has been said. But all I want to do is to
work with everyone in a bipartisan manner. Let's get this thing
done because it is good for America and it is good for Colombia
and Panama.
Mr. Mack. Thank you, Mr. Meeks, and thank you for bringing
your passion to the hearing, and you are welcome at the
subcommittee hearing any time, even if I disagree with you. I
think that the frustration is that everything points to a
reason why these free trade agreements should be passed. The
President should send them to the Congress immediately and they
should be passed. Every hoop that the countries have been asked
to jump through they have jumped through, to the point now
where when you ask those who should know what else is it that
you are looking for, they can't answer. I mean, I think we have
exhausted every legitimate policy discussion on this, and now
it is just politics.
I would like, if you could, one of the things that I don't
know is focused enough upon on these trade agreements is, what
does it say about our foreign policy as it relates in Latin
America for these two trade agreements? We have spent so much
money over the years in Colombia to help with the drug cartels
and the terrorist organizations, they are allies of ours. In
your opinion, what does it mean if we continue to sit on the
sidelines and have an almost nonexistent foreign policy in
Latin America? What do you think it means to Colombia and
Panama and how do you think that relates to our security?
Mr. Padilla. Well, Mr. Chairman, let me first, if I could,
just say to Mr. Meeks, I want to thank you for your leadership
on this issue. You have been on this issue for a lot of years,
and when these agreements pass with a strong bipartisan vote,
as they will, we will owe you a debt of gratitude as a country.
So thank you for your leadership. I know it is a difficult
issue, particularly with some of your colleagues.
Mr. Chairman, I think that what this says is that our Latin
American friends cannot be sure that we are with them and we
are falling behind. I think that is what it says. I would
contrast this with our experience in Central America where we
passed the Central America Free Trade Agreement, which was a
very difficult free trade agreement to pass, also done by Mr.
Meeks' leadership. Exports exploded to those countries. Our
economic relationships deepened. And what we are seeing, for
example, in El Salvador, where the President is going to visit,
is a peaceful transfer of power from the right to the left, and
yet that country has remained committed to democracy and free
markets. I wish the same were true in Nicaragua. We need to
show our engagement. And we get into trouble in Latin America;
over the years, we have gotten into trouble, when we ignore the
region, as we too often do. And I fear if we continue to delay
these agreements for basically domestic political reasons, that
it sends a message to our allies that they are better off
dealing with themselves, with Brazil or with other countries in
the region, and I don't think that serves our long-term
interests.
Mr. Jones. Mr. Chairman, I think we need to remind
ourselves that Colombia chairs the U.N. Committee, United
Nations committee implementing sanctions against Iran, that it
has partnered, and I know this quite deeply--they are training
the new Mexican Federal police force to combat the
narcotrafficking and the criminal organizations in Mexico that
threaten our borders. They are working in Afghanistan at our
request on the counternarcotics trafficking and growing
situation. So they have been a staunch partner of the United
States.
I think regrettably, both in terms of reporting and in
terms of foreign policy, the United States has ignored Latin
America all too often. We will have a spurt of interest in
Latin America, and then it dies down. And right now we are in a
position where they perceive us as not interested in them,
ignoring their interests and they are getting frustrated,
Colombia, specifically. And that is why they have so
aggressively gone after these other free trade agreements with
the European Union, with Canada, China, and the Mercosur
countries.
So I think our whole foreign policy, and this is true of
Democrat and Republican administrations, need to focus more on
our own neighborhood. Because if we are going to have a problem
it is going to--and it could be exacerbated--by losing friends
in our own neighborhood in the Western Hemisphere. So I would
say that this is just a step forward in trying to combat that
perception that we are not interested in the Western
Hemisphere.
Mr. Mack. Would you agree with me and others on this
committee? I don't want to put words into all the committee
member's mouths, that the fact that the President has chosen
not to go to Panama and Colombia on this trip isn't something
else that could be frustrating to Colombia and Panama--that as
the President takes his trip, that once again they are being
overlooked?
Mr. Jones. I am generally a glass half full kind of guy,
and what I am thinking this is going to show--his trip, the
President's trip--will show the importance in a very personal
way of the Western Hemisphere to the United States, and
hopefully the trips to Panama and Colombia will come after we
have reached the political agreements here in the United States
and pass these two free trade agreements and it will be much
more of a celebration at that time than it would be right now.
Mr. Padilla. I think it is a little unfortunate, Mr.
Chairman. One thing I observed in my time in government is that
personal relationships between leaders really matter, and I
think one of the reasons we have moved forward on Korea is
because of the excellent personal relationship between
President Obama and President Lee in Korea. And there is only
so many times you can go to a G-20 meeting and meet the
President of Korea and not have something to say about a trade
agreement.
That is not the case with President Santos or President
Martinelli. So I think it is unfortunate, it is a missed
opportunity, but I, like Ambassador Jones, am very hopeful that
we will soon have reason for another trip and that trip will be
a celebratory one.
Mr. Mack. Thank you. And I want to take this opportunity
again to thank you both for being here and to share your
insights. I wish we had more time. Like I said, I hope that we
will have another opportunity to have a hearing on this topic
because I do think it is important.
And I just want to leave with this: That I am deeply
concerned about what all of this means to the world as it
relates to our foreign policy. And as I stated in my opening,
that you can't lead if you don't know what you stand for. And I
think that the United States needs to get back on a track of
knowing what we stand for and trying to lead in that direction.
So thank you so much for being here, and the hearing is now
adjourned.
[Whereupon, at 2:55 p.m., the subcommittee was adjourned.]
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