MONTGOMERY VILLAGE, Md., October 2, 2011 —President Obama's recently mentioned that free trade agreements are pending approval in Congress. One of these is with Colombia, South America, the country where I was born and where I lived until I was 21 years old.
From that insiders perspective following is my personal knowledge flavored by my understanding of Colombian culture and politics. I also have definite views of what the Free Market treaties have done to our American economy.
Competing on a non-level playing ground has not been very successful for the American worker. Making goods in a country that has rational economic, labor, and environmental structures is a lot more expensive than in a country that doesn't have them.
This combined with very low labor costs makes competition very hard if not impossible.
What Could We Sell to the Colombians?
Thriving Bogota
In recent trips to Colombia, I have observed that there is a saturation of automobiles, consumer electronics, and other products from the same vendor countries that we patronize. Countries like China, Korea, Japan, France, Italy, The Czech Republic, Brazil, and others have already claimed their foothold economically in Colombia.
Competing with them would be very difficult.
However, there is one thing that we in the US have plenty of to share: creativity. We are great at coming up with new ideas and in some cases implementing them. Our software developers usually have brand new approaches and new ideas that meet the needs of the consumers.
This could be an area that could provide an advantage in countries like Colombia. That is if there were any respect for intellectual property rights there.
In conversations with family and friends in Colombia and on my trips there, I was impressed to find that most of them usually had the latest software, programs that we pay a lot of money for and can't afford to update every time there is a new version released. Yet in Colombia these programs are used by just about anyone that has a computer.
Then I found the reason for this apparent discrepancy. At the entrances to all commercial centers in Bogotá and other large cities, you can purchase a pirated copy of any type of software for about $2 or less.
Programs like DreamWeaver and Photoshop can be in any Colombian computer for about $1. Of course, a dollar goes further in Colombia, but still.…
This, of course, is not limited to software. Music CDs, video DVDs, and books are also pirated and sold freely in the street for a couple of bucks.
Foreign consulting services do not fair much better. While things have improved from the time I worked professionally in Latin America in the 1990s, it is still a very tricky business. Many professionals there believe that if another professional can do it, they can also do it cheaper. Plagiarism of services or goods is not seen as a disgrace, and it is extremely difficult to get the authorities interested in prosecuting something that is seen countrywide as just a way of doing business.
Many Colombians, and for that matter many Latin Americans, believe that only physical things have real value, such as land. For example, it is easier for them to see that a new machine that makes more gizmos is going to be better than a consultant telling them how to improve their current manufacturing process to make more profit.
One area in which America could have some success is in the improvement of agricultural products and technology. U.S. agricultural technology is decades ahead of Colombia's. When you add to this the factor of bio-engineered agricultural products, it is a reality that U.S. agricultural products would probably ace out any competition from Colombia. Is it good for any country to have its ability to feed its population taken away? That's another matter, entirely.
Dependence on bio-engineered crops has as its roots the creation of dependence on proprietary pesticides and fertilizers. What this usually means is that once a farmer switches to a particular bio-engineered seed, he is essentially agreeing to purchase proprietary plant enhancement products from the supplier, upon which the patented seed is dependent.
So if a Colombian grower wants to compete with U.S. imported grain, he has to become a captive audience to chemical companies in America. The U.S. has insisted on no restrictions in the use of bio-engineered agricultural products in all its trade agreements, including the one with Colombia.
From the current perspective of U.S. exporting capabilities, any benefit to the US economy is somewhat limited in a Free Trade Agreement with Colombia.
So what is it that the proponents of the Free Trade Agreement perhaps really want?
Tragic History of Colombia Labor Unions
One possible answer could be deduced from the history of the labor organizing movement in Colombia, especially in the last three decades. For more than 30 years, over 3,000 labor leaders and organizers have been killed in Colombia, mostly by Right Wing paramilitary forces. While the current Colombian government has assured the U.S. that prosecution of guilty parties will be taken care of, most labor movement supporters are doubtful. Yet the U.S. negotiators are satisfied by this assurance, wanting to expedite the agreement, one that strongly supported by the U.S. Republican House of Representatives.
Funeral of murdered union member
However, the labor movement in Colombia is now all but defunct. The total number of workers represented by unions is just a few thousand (out of about 40 million people). Only about four percent of workers are members of unions in Colombia. This would seem to be very agreeable to some on the Right in the U.S. who would like to see our own unions defunct as well.
For the U.S. multinational corporations, the opportunity of moving even more jobs to a country that doesn't support trade unions, or that looks the other way when its leaders and organizers are killed, is unique. Add to this the cheap labor force, a consequence of the small number of organized workers, and you have a perfect match.
So in all likelihood, the U.S. will lose even more jobs once these agreements are implemented, especially the one with Colombia. This is why all American labor unions oppose these agreements.
Since about half of the population of Colombia currently lives below the UN definition of poverty, bringing any type of jobs to Colombia would probably help some of the poor. The Colombian laws allow for companies to hire workers as "temporary" or "contractual," meaning they do not receive any benefits and can be paid the minimum wage.
Earlier this year, the minimum wage in Colombia was increased to the equivalent of U.S. $252 a month, plus around $30 for a transportation subsidy per month. This amount is barely sufficient for a person to eat and pay for a room for a month and is incredibly less than what it is in the U.S.
From my perspective, a Free Trade Agreement will probably destroy the agricultural sector as it is today in Colombia. It may marginally improve the lives of the 20 million poor by providing very low paying jobs.
But is this what’s meant by “free?”
Mario Salazar, the 21st Century Pacifist, is a bleeding heart liberal, agnostic, exercise fanatic, Redskin fan, technophile, civil engineer, combat infantry veteran, jewelry maker, amateur computer programmer, Environmental engineer, Colombian-born, free thinker, and, not surprisingly, pacifist. You can find his articles - ranging from politics to cooking a mean brisket - in 21st Century Pacifist at The Washington Times Communities. Follow Mario on Twitter @chibcharus #TWTC and Facebook at Mario Salazar.
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