The Hagstrom Report

Agriculture News As It Happens

Baucus endorses Colombia pact, but side issues could slow it down


Senate Finance Committee Chairman Max Baucus, D-Mont., enthusiastically endorsed the U.S. free trade agreement with Colombia today, but he and Obama administration officials signaled that Colombia will have to prove its commitment to labor rights and Congress will have to agree to reauthorize trade adjustment assistance for American workers before it will be approved.

Montana wheat growers, who export 80 percent of their production and are worried about a Canadian free trade agreement with Colombia going into effect in July, want Congress to approve the pact as soon as possible, but these two concerns could put that schedule into question.

In his opening remarks, Baucus quoted President John F. Kennedy — “Geography has made us neighbors. History has made us friends. Economics has made us partners, and necessity has made us allies” — and said it applies to the U.S. relationship with Colombia. But Baucus also said approval of the agreement that the Bush administration made with Colombia in 1996 “has been delayed by legitimate concerns for the rights and safety of Colombian workers.”

Baucus said the agreement negotiated between the Obama administration and the government of Colombian President Juan Manuel Santos Calderon “is not perfect, but it is progress … great progress” on the labor rights issues. But Baucus added that trade adjustment assistance would have to be brought up “in tandem.”

“We are not going to get one without the other,” he said.

Republicans have objected to renewing trade adjustment assistance for American workers hurt by trade liberalization with the benefit levels established in 2009. But Baucus, whose powers as Finance chairman are so great that in the 2008 farm bill he came up with an additional $1 billion per year for the food stamp program by extending an import inspection fee, said, “There are ways to pay for the 2009 provision.”

Deputy U.S. Trade Representative Miriam Sapiro also urged the committee and Congress to approve the agreement, but said that the Obama administration will not submit the formal agreement to Congress until the Colombian government has made more progress on the labor action plan to which it has agreed.

On the trade adjustment assistance issue, Sapiro said the administration is looking forward to working with Congress “on a robust program that will support Americans who need training and other services when their jobs are affected by trade.”

She said the assistance “is a key component of the president’s legislative trade agenda, along with renewal of our preference programs and permanent normal trade relations for Russia as that country joins the World Trade Organization.”

Sandra Polaski, Labor Department deputy undersecretary for international affairs, testified that the administration is pleased with the Santos administration’s willingness to protect workers’ rights, and expects the Colombian government to reach additional benchmarks in a labor action plan by June 15.

Polaski said that the administration believes that the Santos administration wants to achieve the free exercise of worker rights in Colombia, stop violence against labor leaders and also stop the misuse of cooperatives and temporary service agencies that undermine labor rights. The negotiation, Santos said, has been complex, but not difficult.

Jeffrey Vogt of the AFL-CIO said that the union does not believe the agreement is strong enough to support the agreement. But he added, “There is some room to be hopeful. The Santos administration has abandoned the heated, anti-union rhetoric of the [President Alvaro] Uribe administration, which repeatedly equated labor leaders with terrorists or traitors.”

Vogt also noted that the labor action plan attached to the agreement contains several provisions that Colombian trade unions and the AFL-CIO have long sought.

Several Democratic senators, including Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., whose constituents include the heavily unionized auto industry, signaled they want to be sure that Colombia will live up to its labor promises before they vote for the agreement. Sen. Ben Cardin, D-Md., said he wondered why more of the labor issues were not handled in the core agreement rather than in a side agreement, but Baucus said that some of the labor issues did not belong in a trade agreement.

Sen. Orrin Hatch, R-Utah, tried to pin down Sapiro on the date by which the agreement would be submitted to Congress and whether the submission would be preconditioned on Congress agreeing to trade adjustment assistance, but Sapiro said only, “We share your sense of urgency” that the “sequencing” of the trade initiatives would be a matter of discussion.

Gordon Stoner, a grain producer from Outlook, Mont., urged the committee to approve the pending trade agreements with South Korea and Panama as well as Colombia.

“We cannot afford to miss out on these markets as these countries are not waiting for the United States,” said Stoner , president of the Montana Grain Growers Association. “We encourage the Obama administration to prepare and submit all three free trade agreements to Congress for a ratification vote as soon as possible, and we urge the House and Senate to vote for their swift passage.”

U.S. competitors, including Australia, Canada, the European Union and Argentina, have already concluded agreements or are negotiating their own bilateral free trade agreements, Stoner noted.

“When the Colombia-Canada FTA becomes effective this summer, millers that would prefer to use U.S. wheat will have to turn to cheaper duty-free wheat from Canada to remain competitive. The tariff disadvantage would result in a more than $100 million per year loss to U.S. wheat farmers,” he said.