WASHINGTON/BOGOTA, (Reuters) – A long-delayed free-trade deal between Colombia and the United States came into force yesterday, a step that should boost the Andean nation’s exports and foreign investment, President Juan Manuel Santos said.
Colombia’s weak labor record, including murders and attacks on union activists, had held up the free-trade pact for years as powerful U.S. union groups opposed it on the grounds that Colombia lacked the capacity to enforce worker protections.
But Congress finally passed the agreement in October, more than four years after it was negotiated by the administration of former President George W. Bush.
Santos said the treaty should give further impetus to Colombia’s economic growth and create new jobs – a key aim of his government.
“This agreement is an enormous opportunity for Colombian production, for Colombian jobs. I’m enthusiastic about the prospect of generating jobs,” Santos told local radio.
He said the agreement should boost annual economic growth by between 0.5 and 1 percentage point and create about 100,000 jobs per year. Colombia’s economy expanded by 5.9 percent last year, its strongest performance for four years.
In Washington, the Colombian ambassador said trade between the United States and Colombia could double in three years.
“It’s going to be huge and I’m ready to bet we’re going to double bilateral trade in three years,” Ambassador Gabriel Silva said in remarks to the U.S. Chamber of Commerce.
But despite the government’s optimism, farmers fear the agreement could put many ranchers and growers out of business because of an increase of cheap U.S. food imports.
The United States is Colombia’s top trade partner and the main destination for Colombian exports. Two-way trade between the two countries totaled about $37.5 billion in 2011, according to official data.
It has also been the biggest source of foreign investment in Colombia in recent years. Between 2001 and 2011, it accounted for about 27 percent of total foreign direct investment.
Colombia joins fellow South American nations Peru and Chile in signing a free-trade accord with Washington.
