The Magazine

Trading with Our Friends

Does the Democratic Congress really want to alienate Colombia and Peru?

Jul 30, 2007, Vol. 12, No. 43 • By DUNCAN CURRIE
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Congress seems poised to scuttle a free trade agreement with Colombia--and thus hand Venezuelan president Hugo Chávez, the anti-Yanqui gadfly, an unexpected gift. In late June, Democratic House leaders announced that the U.S.-Colombia FTA, signed last November and awaiting congres sional approval, would not even be considered until Bogotá showed "concrete evidence of sustained results" in thwarting paramilitary activity and curbing violence against union workers. Meanwhile, approval of separate FTAs with Peru and Panama has been delayed pending a congres sional visit to those countries in August. Top Democrats originally agreed to support the latter pacts in return for labor and environmental concessions, but now they insist that the Peruvian and Panamanian governments amend their domestic laws before the deals can be ratified.

When he took over the Ways and Means Committee this year, New York Democrat Charlie Rangel appeared committed to hashing out a trade compromise. "I think Charlie has given a good-faith effort," says Republican congressman Ron Lewis of Kentucky, who believes Rangel was "held back" by senior Democrats such as House speaker Nancy Pelosi and Michigan's Sander Levin, head of the Ways and Means trade panel. Other free trade advocates take a less charitable view of Rangel. "He gets good marks on style," says Daniel Griswold, a trade policy analyst at the Cato Institute. "On substance, though, he's virtually indistinguishable from Nancy Pelosi, Steny Hoyer, and the rest of the leadership."

Rangel may be a free trader "at his core," as one Republican told me just before the 2006 election, but he is also a good soldier when trade rows become partisan battles. Such is the case today. Democrats allowed George Bush's trade promotion authority to expire at the end of June, and, according to one well-placed Democratic House aide, "There's no chance of a general renewal." Despite a personal appeal from Peru's president, Alan García, to act swiftly, the Democrats seem intent on postponing ratification of the U.S.-Peru FTA until after Rangel, Levin, and others visit Lima (the capital) in August.

Peruvians themselves are divided on trade relations with the United States. Indeed, their presidential election last year provided a microcosm of the ideological struggle now raging in the Andes. The second-round runoff pitted García, who ruined Peru's economy during his first stint as president in the 1980s but has since embraced more responsible macroeconomic policies, against Ollanta Humala, a radical nationalist favored by Chávez. It was the market-friendly center left against the antimarket far left--and García prevailed. "Peruvians want to be like Chileans and Brazilians," says Carol Graham, a senior fellow at the Brookings Institution. "They don't want to be like Venezuelans." García can be a valuable U.S. ally, should he continue offering a practical, pro-American alternative to Chavismo. But the current trade spat is not helping.

Even if the Peru and Panama deals eventually go through, as Rangel maintains they will, those countries are much less economically and strategically significant than Colombia, which sits next door to Venezuela and is the third most populous nation in Latin America (after Brazil and Mexico). Colombian president Alvaro Uribe, a center-right leader who is close with Bush, has waged a courageous campaign against the vicious narcoterrorists of the Revolutionary Armed Forces of Colombia (FARC), a leftist guerrilla movement now supported by Chávez.

So far, however, that has not helped him secure congressional approval of the FTA, which most Colombians favor. Democrats and U.S. labor groups tick off a litany of concerns, including the murders of trade unionists, paramilitary infiltration of politics, and the culpability of Colombia's army and intelligence services in various atrocities. "The members wanted to see progress on all those issues before there was an FTA," says the Democratic House aide.

But Uribe has made demonstrable progress on "all those issues" since taking office in 2002. He has presided over a massive drop in homicides, assassinations, kidnappings, and terrorist attacks. "Even on the unions' own figures," reported the Economist magazine in May, murders of trade unionists "have fallen to less than two-fifths of the number in 2001." The big story about Uribe is not that some of his supporters may have links to thuggish right-wing paramilitaries--these groups emerged before he became president--but that he has demobilized or jailed thousands of paramilitary fighters while concurrently weakening the FARC rebels and driving them into the jungles. Indeed, the only reason we are now learning the extent of paramilitary political infiltration is that Uribe's demobilization push has exposed it.