Why is Colombia not in the Trans-Pacific Partnership?
July 2, 2013
Last month, Vice President Joe Biden met with Colombian president Juan Manuel Santos in Bogotá as part of his whirlwind tour of the Americas. During and after the trip, Biden stressed the impressive progress Colombia has made in recent years in economic growth, in citizen security, and, most notably, in improving the rule of law and reducing violence in rural areas.
Having returned from Colombia just two weeks ago myself, I can confirm Biden's analysis. To be sure, the Colombia of today is much different, much safer, more secure, and more prosperous, than that of even 10 years ago. But there remains work to be done.
While the Santos administration has worked tirelessly and effectively to reduce the violence that has plagued the country for decades, the outcome of the government's ongoing negotiations with the FARC and the effects of increasing instability in Venezuela remain to be seen, as do their impact on Colombian security.
Still, recent years' improvements in security put Colombia on the threshold of a new period in its development—one in which it can reinvigorate its focus on and commitment to free trade. And Colombia has started to do just that, as a founding member of the Pacific Alliance and an active participant in a fast-growing number of free trade agreements (FTAs) with countries all around the world.
What, then, is the status of Colombia's commitment to liberalized trade policy? And where does it stand with the TPP?
Q1: What does the Colombian economy look like today? What free trade agreements does the country already belong to?
A1: The past five years have seen rapid and robust growth of the Colombian economy. With the government's steady efforts to curb the production and trade of cocaine, and the violence that comes with both, the economy has enjoyed previously unavailable room to expand, growing by an average of 3.82 percent annually since 2008. And that growth continues; projected GDP growth in 2013 is a high 4.2 percent.
With this growth, Colombia has proven an increasingly attractive destination for foreign direct investment (FDI). FDI inflows have increased by over 30 percent since 2008 as investors abroad have come to recognize and appreciate the ever-more stable and profitable nature of the Colombian economy.
Amidst this growth at home and increasing openness to foreign investment, Colombia has also demonstrated its deep commitment to free trade. To date, the country has signed 14 FTAs and is a signatory to and active member of several major trade blocks in the region and beyond.
Colombia's bilateral trade efforts include agreements with Chile, Mexico, Canada, the United States, and the European Union.
Colombia's multilateral FTAs include: the CAN (with Bolivia, Ecuador, and Peru), Mercosur (with Argentina, Brazil, Paraguay, Uruguay, and Venezuela), the Northern Triangle (with El Salvador, Guatemala, and Honduras), the EFTA (with Switzerland, Norway, Iceland, and Liechtenstein), and, of course, the Pacific Alliance (with Chile, Peru, and Mexico).
The government also has four approved but pending agreements with the Republic of Korea, Costa Rica, Panama, and Israel. And Colombia has time and again expressed its interest in participating in the TPP, though this desire has yet to bear fruit.
Q2: Why is Colombia not yet a member of the TPP?
A2: The reasons for Colombia's ongoing exclusion from the TPP are twofold.
On one hand, the states already part of the TPP—Australia, Brunei, Chile, Malaysia, New Zealand, Singapore, Peru, the United States, Vietnam, Canada, and Mexico—are all members of the Asia-Pacific Economic Cooperation (APEC). While membership in APEC is not an official prerequisite to entry into the TPP, member states have expressed their reluctance to consider new TPP members excluded from APEC membership.
While Colombia has sought APEC membership since 1995 and has participated in the organization as an observer, it has yet to be admitted to the group. Given that TPP members prioritize the membership of fellow APEC states, Colombia's TPP membership aspirations have been largely put aside.
On the other hand, the United States, an active and instrumental TPP member, has the potential to sway the group in Colombia's favor and arguably stands to gain from doing so. The two countries have long enjoyed a fruitful partnership, and many are surprised that the North American giant has not lobbied for its South American ally.
However, much of the U.S. hesitance to push for Colombia's entry derives from its own priorities. In high-level meetings between Colombian officials and their White House counterparts, the Obama administration has expressed its preference to conclude the second round of TPP negotiations, scheduled for later this month, before rocking the boat by pushing for expanded membership.
This hesitation and the delays it has furthered, however frustrating for Colombian president Juan Manuel Santos and his administration, are particularly comprehensible in light of the TPP's preexisting skepticism regarding the entry of non-APEC members. For now, it seems Colombia will have to wait a bit longer.
Q3: Why should Colombia be in the TPP?
A3: The reasons for Colombia's interest in the TPP are more or less self-evident. The country has enjoyed fruitful trade relations with countries throughout the Western Hemisphere and as its economy has grown and stabilized, it has increasingly sought out similar opportunities across the Pacific Ocean.
For their part, TPP member states and the organization as a whole have much to gain from Colombia's membership.
In May of this year, Colombia was invited to join the Organization for Economic Cooperation and Development (OECD) and in so doing, the country demonstrated its willingness to improve its own economic and social policies and comply with international demands.
Further, Colombia's long democratic tradition and consistent but recently reinvigorated commitment to trade liberalization and economic cooperation together speak to its value as a partner in the TPP. Its existing trade agreements with five of the group's members and its history of complying with its international obligations ensure that it would be a reliable and profitable member of the already promising organization.
And without a doubt, Colombia's solid alliance with the United States—including the bilateral trade agreement between the two—has shown the enormous value of Colombia and its economy to the United States. The U.S.-Colombia FTA increased U.S. exports to Colombia by more than 20 percent in its first year alone, and the growing Colombian economy would likely bring added benefits to the United States and its TPP partners upon joining.
Conclusion: The Obama administration's second term has all the right rhetoric on U.S. relations with its neighbors in Latin America, loudly promoting reinvigorated relations and close partnerships throughout the hemisphere. But so far, that rhetoric has yet to be matched with big ideas for new initiatives.
Colombia's membership in the TPP is one such opportunity. While the administration will likely come across other opportunities for expanded regional cooperation and interactions, pushing through Colombia's membership in the TPP would be a strong first step and one that would in all likelihood be well worth the while.
It's time that the Obama administration's Latin America rhetoric is matched by bold and decisive initiatives. Colombia's TPP membership is a great place to start.
Carl Meacham is the director of the Americas Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Jillian Rafferty, intern scholar with the Americas Program at CSIS, provided research assistance.
Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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