While Washington frets that gridlock over budget deficits will hurt the economy in the long run, policymakers have apparently forgotten that gridlock can produce economic harm in all sorts of ways. Take trade.
The Wall Street Journal reported that, in Colombia, lawmakers have voted for legislation that will “open the floodgates to trade with China.” Columbia Trade Minister Sergio Diaz-Granados made clear that his nation pursued China in part because of Washington’s continued unwillingness to ratify the long-pending U.S. free trade agreement with its key South American ally.
Colombian officials said that, given their choice, they’d rather have the U.S. trade deal than any other. But, our leaders have forgotten or chosen to ignore a basic reality – that nations in an increasingly inter-dependent world no longer have to wait on the United States to chart their economic futures.
Our gridlock on trade has put not just the Colombian deal in limbo, but deals with South Korea and Panama as well. The deals sit in Congress, victims of a battle between the White House and Democrats, who don’t want to move the deals without more Trade Adjustment Assistance funds for workers who lose their jobs due to trade, and Republicans who want to cut the funds as part of broader deficit-cutting efforts.
Washington’s stance on the Columbia deal, which the administrations of President George W. Bush and then-Colombian President Alvaro Uribe inked in 2006, represents a self-inflicted wound on at least two levels.
First, Democrats and their friends in organized labor worry that more trade would cost union jobs in the United States. While trade probably does cost some union jobs in the short run, most experts of the left and right believe that, over the long run, trade boosts growth and creates more jobs and higher living standards.
For the United States, this deal would eliminate duties on 80 percent of exports of consumer and industrial products to Colombia immediately and the rest within a decade. U.S. firms in most service sectors would get immediate access to Colombian markets.
Second, Democrats criticize Colombia for its long history of violence against trade unionists. But Uribe attacked the problem head-on, confronted the nation’s paramilitary forces, and dramatically reduced violence against unionists while significantly boosting convictions for antilabor crimes. He made the nation as a whole much safer as murder, kidnapping, and terrorism statistics plunged.
Moreover, Uribe’s Colombia served as an important bulwark against Venezuelan strongman Hugo Chavez, who promotes his vision of an anti-American “21st Century socialism” across the region with help from his allies in Bolivia, Nicaragua, and Ecuador. Our continued unwillingness to ratify the Colombia trade deal can only serve to weaken U.S. ties with its important ally to the south.
Colombia isn’t waiting for Washington to get its act together. It’s looking for other trade partners. That’s an important warning to a White House and Congress that, on this issue and others, would rather fight than make progress.