Nearshore Americas

Colombia Nudges Closer to China, After Waiting, Waiting on U.S. Trade Pact

Source: Dow Jones

BOGOTA — As Washington drags its feet in deciding whether to move forward with a long-delayed free-trade deal with Colombia, lawmakers in Bogota have passed legislation that could open the floodgates for more trade with China, where the government plans to take two high-level trade missions over the next three months.

Colombia Trade Minister Sergio Diaz-Granados said last week’s passage of the ” Chinese Trade Promotion and Protection” bill could even allow for concrete talks to begin with China on the construction of a railway that would link Colombia’sCaribbean coast with its Pacific coast, and would serve as an alternative to the Panama Canal.

Increasing commercial ties with China suggest Colombia, which is Washington’s closest political ally in South America, may be losing patience with its principal trading partner, especially as the Chinese knock on its door with investment money in hand.

In an interview late Monday at his offices in downtown Bogota, Diaz-Granados said he remains hopeful a free-trade agreement with the U.S. will be passed before the end of the year, but added Colombia can no longer “sit with its arms crossed, waiting.”

“We’ve been talking about a U.S.-Colombia free trade deal for 20 years, and it’s certainly the trade deal we want more than any other,” Diaz-Granados said. “But in the meantime, we have to continue working in other directions. Our business leaders need to pursue other markets and diversify.”

The official said he will travel to various Chinese cities next month for trade talks, and Colombian President Juan Manuel Santos will visit the Asian country in September to discuss trade and other issues. China has been making inroads in Latin America for some time. In 2009, it supplanted the U.S. as Brazil’s largest trading partner, and Venezuela’s leftist President Hugo Chavez has for years been allowing Chinese companies to set up shop in oil fields and factories once owned by U.S. firms before they were expropriated.

Colombia has so far resisted forging too many ties with China, its No. 2 trading partner. About 40% of Colombia’s exports go to the U.S. and only 3% to China, while 28% of Colombia’s imports come from the U.S., compared with 13% from China.

Repeated delays by the U.S. in implementing a free-trade deal are likely to further China’s influence in Colombia. President Santos said earlier this year that if no final trade agreement is reached this year, Colombia may simply stop trying.

The proposed trade agreement was approved by both governments in 2007, but Democrats in Washington have continually backed away from ratifying the deal amid opposition from important labor groups such as the AFL-CIO, which argues it would cost U.S. jobs and rejects what it says are “horrifying levels of labor and human rights violations” in Colombia.

Minister Diaz-Granados says the ball’s in Washington’s court.

Meanwhile, China isn’t the only other place Colombia is looking at. A free trade deal with Canada is likely to be implemented before the end of this year, negotiations have begun for trade deals with South Korea and Turkey, and discussions with Japan could begin soon, he said.

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Diaz-Granados said it’s still too early to begin formal talks with China on a free-trade agreement, although the trade promotion and protection bill, which is expected to become law within a month or two, is a historic step and the most important bilateral act to date. Diaz-Granados said it could provide a framework for more serious talks on China building the railroad across northwestern Colombia. “The idea of building a railroad linking the Caribbean and the Pacific has been around for decades.

“The difference is that 50 years ago there was no China. Now there is, and (China is) a country with massive infrastructure and transportation needs,” the minister added.



Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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