FATAL NAIVETE ON FREE TRADE
January 23, 2009
At her Senate confirmation hearing last week, Hillary Clinton expressed confidence the U.S. alliance with Colombia will always be good, free-trade treaty or not. But growing signs show she's got it wrong, says Investor's Business Daily (IBD).
Last year, Columbia's Trade Minister Luis Plata warned that denying free trade to Colombia in a hemisphere full of U.S. free-trade treaties amounted to sanctions on an ally because the other countries with which America has agreements are its competitors.
The matter is urgent, because the global economic downturn is hitting Colombia hard now:
- With Colombia's joblessness hitting 10.8 percent and industrial output down more than 13 percent in November, it can't wait much longer.
- What's more, the absence of a free-trade deal has driven much of the country's trade to Venezuela, an economy that faces a massive collapse as falling oil prices, waste, corruption and Hugo Chavez's hostile investment climate take their course; Colombia's economy could go down with it.
Colombia already has tariff-free trading on its exports to the United States for its cooperation in the war on drugs. It collects $1 billion in tariffs on U.S. imports, but would gladly give that up to draw foreign investment that would flow under the trade treaty.
Colombia has begun a $16 billion stimulus package, attempting to boost investment in upgrades for private industry to make it more competitive globally. But this amounts to crumbs compared with what real foreign investment would do, explains IBD.
Source: Editorial, "Fatal Naiveté On Free Trade," Investor's Business Daily, January 23, 2009.
Browse more articles on Economic Issues