H.E. Luis Alberto Moreno

"U.S.-Colombia: On the Road to Free Trade"
(program information)

A presentation by

H.E. Luis Alberto Moreno
Ambassador of Colombia to the United States

April 19, 2004
World Trade Center of New Orleans

Good afternoon. It is a pleasure to be here today in New Orleans to speak about the Colombia-U.S. trade negotiations because Louisiana has always been a leader in business and trade, and because we both have so much to gain from the initiative our two countries will embark on next month.

I want to thank the World Trade Center, the U.S. Chamber of Commerce and those companies and organizations for sponsoring this event. This is the first visit I will make to several cities around the United States in the months ahead to engage in a dialogue directly with local leaders, businesses, industry groups, port officials, farmers and workers who are part of our bilateral trade relationship. This outreach will help us better understand the many issues and concerns that must be addressed to complete a successful agreement. And I define "success" as an agreement that offers new opportunities in both our markets.

This is not my first visit to this great city and I pledge it won’t be my last. I look forward to coming back to New Orleans after the Colombian and U.S. negotiating teams have successfully completed their work, to talk with you again about the specifics of the agreement and explore with you a joint strategy to secure ratification and implementation.

The free trade negotiations will take place against a backdrop of an already flourishing bilateral trade relationship, one in which Louisiana companies, workers and farmers are important partners. Total bilateral trade between Colombia and the United States reached $10.1 billion in 2003. Louisiana exported $374 million to Colombia last year, about ten percent of total U.S. exports to my country. Only the states of Florida and Texas exported more goods to Colombia than did your state. Key exports from Louisiana to Colombia are agricultural products, chemical manufactures and processed foods.

In recent years, Colombia has emerged as one of Louisiana’s most important foreign agriculture markets. Agricultural exports from Louisiana to Colombia amounted to $243 million in 2003. In fact, Colombia is today your largest agriculture market in the Western Hemisphere outside of NAFTA. We purchase 18% of all Louisiana agriculture exports to the world.

The free trade talks are a tremendous opportunity to expand this trade in agriculture, and well as in manufacturing products and services. Additionally, it creates an opportunity for U.S. and Louisiana companies to expand investment in Colombia, as the U.S. is already the largest foreign investor in Colombia.

To better understand where we are headed, it is important to appreciate how we arrived at this junction and how our trade relationship interacts with broader Colombian and U.S. strategic goals. Those of you who follow Colombia closely know our recent economic history. But for many Americans, their knowledge and understanding of my country is largely the consequence of the drug war and security situation that is today, at last, being brought under control.

Amidst the challenge of many years of conflict, our economy has been highly resilient. Our long history of sound macroeconomic management has shielded Colombia from the hyper-inflation, debt crises and unstable growth rates many developing countries and much of Latin America have experienced over the past quarter century. Colombian companies and workers have always adapted quickly to new competitive challenges. We have a strong entrepreneurial spirit that welcomes foreign capital, investment, technology and knowledge sharing. We’ve always honored our international obligations; never faulted on a single dollar or peso of debt. We’ve been a profitable home for hundreds of U.S. and multinational companies who have been partners in our development.

Over the past 15 years, our economic relationship with the U.S. has changed significantly. This began in the early 1990s when Colombia implemented a series of market reforms to open our economy to trade and investment. At the same time, the U.S. recognized a need to help those Andean countries fighting narco-trafficking by offering us an important tool to build stronger economies and create alternative development to the illegal drug trade. That tool was the Andean Trade Preference Act, which gave preferential treatment to many export products from Colombia and the Andean region into the U.S. market.

ATPA has been very successful in stimulating trade between all of the Andean countries and the United States and within the Andean region. But it was enacted as a temporary measure, and many critical goods were excluded. The U.S. Congress passed a renewed and expanded ATPA in 2002, but it too is temporary and will expire in December 2006.

In the late 1990s, the Colombian economy experienced its first recession in 70 years. Unemployment soared, trade stagnated and investment and growth dried up. Our economy was in need of additional structural reforms. When President Alvaro Uribe took office in 2002, he moved quickly to build a foundation for sustainable growth to return to Colombia. This included reducing the Government’s fiscal deficit, reforming outdated pension systems and improving efficiency in the public sector. In addition, the new administration adopted a comprehensive defense and security strategy to bring law and order to all regions of the country and to more aggressively fight guerrillas, self-defense forces and narco-terrorists threatening Colombia’s democracy, economy and society.

A sustainable recovery is now upon us. Colombia’s economy expanded by 3.7 percent last year, the highest rates since 1995. We are projecting even higher growth for this year. Inflation and interest rates are modest; and unemployment has fallen from 17 percent at the height of the recession to 14 percent today. An improving security situation has given new confidence to investors – as a result, total investment rose 25 percent last year, and Colombia’s stock market was the best performing worldwide. Our external sector also rebounded – both global exports and imports rose 9 percent in 2003, after having declined in 2002.

As the recovery took hold, President Uribe looked for new ways to enhance long-term economic and political security. So last year, he proposed to President Bush that our two countries negotiate a free trade agreement, one that would make permanent and reciprocal our bilateral commerce, provide equal treatment for Colombian and U.S. farmers, workers and investors and create new jobs in both our economies. President Bush agreed such an agreement would benefit both Colombia and the United States. After months of preliminary preparations we are ready to begin formal talks on May 18 in Colombia.

We expect and hope other Andean countries will enter these talks when they are ready. Colombia welcomes a broader regional agreement that not only advances bilateral trade with the United States but encourages greater inter-regional trade and new opportunities for cross-border investment. An Andean region of vibrant growing economies benefits all of us, including states like Louisiana that have strong ties to our region.

I have been following closely the intense debate taking place in the United States right now about free trade agreements and their impact on American workers. Given this uncertain climate, one might think this is not a good time for Colombia to be advocating an agreement. But I am confident that advocates of free trade and open markets – like all of you here today – will be persuasive in urging policy makers, workers and farmers not to reject proven policies that have made America the driving engine of global economic growth over the past half century.

The current debate about free trade will not be resolved in the abstract. It will be settled by facts and by real examples of jobs created and business partnerships developed. I believe Colombia will be a shining example of how expanding trade and investment benefits both partners in an FTA. Colombia is today a sizable market of 44 million consumers with a Gross Product of $82 billion. Despite rising trade in recent years, there remains considerable room in this market for new commercial and investment opportunities for U.S. companies in agriculture, manufacturing and services. There is excellent potential for growth in Colombia’s industrial and consumer sectors – growth that will look first to the north, to the U.S. market, as a preferred supplier and business partner. And of course, we will look to a healthy and growing American economy to expand Colombian exports.

But this free trade negotiation is more than just about lowering tariffs and opening markets. It will offer full reciprocity in our trade relationship. It will provide greater confidence to investors and traders because it will be permanent. It will establish a process to manage and resolve commercial disputes. And it will encourage further modernization of the Colombian state, which will acquire commitments in the agreement in areas like competition, customs administration, intellectual property, government procurement, and labor and environmental practices.

Our two economies are highly complementary to each other. U.S. exports to Colombia include agricultural products such as corn, wheat, cotton and soybeans and manufactured goods, chemicals and machinery we need for our industrial and technological development. And there are great opportunities for U.S.-based service companies across a wide range of business areas.

Likewise, Colombian exports to the U.S. include natural resources like coal and oil – energy not subject to the volatility of Middle East events – and products like coffee, fresh flowers, tropical fruits and vegetables not grown in the United States.

One example of how trade works to benefit both our economies is Colombia’s apparel sector, which depends on Louisiana-grown cotton as a raw material. Resources and production are shared between Louisiana cotton farmers and Colombian apparel workers, each depending on and needing the other to successfully compete against a flood of imports from China or India.

Beyond the commercial benefits to workers and farmers that will arise out of a free trade negotiation, there are other important benefits to this initiative. A free trade agreement will strengthen democratic institutions in Colombia that are under threat by violent actors in our society – guerrillas, self-defense forces and narco-traffickers competing for billions in illegal drug profits, targeting institutions, infrastructure and civilians in their deadly crossfire.

Colombia and the United States have together invested billions of dollars to rid the plague of illegal drug trade from both our countries. At last we are realizing real success in this fight. American military equipment, training, law enforcement cooperation, intelligence support and economic and social assistance are making a difference on the ground. We are taking Colombia back from the narco-terrorists day by day, town by town, hectare by hectare.

Critical to sustaining this effort is building a stronger Colombian economy, one that provides an alternative to growing illegal crops like coca and poppy. I am confident free trade will for decades bear the fruit that U.S. assistance programs have seeded over the past four years. And as our economy strengthens, Colombians will be able to bear a greater portion of the burden of providing security and human rights protections to our citizens.

Colombia is ready today to negotiate this agreement. The political will and business commitment exists and there is strong public support for this initiative. All issues are on the table; all economic sectors are in play. A free trade agreement will, no doubt, require some Colombian companies, workers and farmers to adjust to a more challenging, more competitive future. No doubt, the same will be true for some here in Louisiana. We’re ready for this challenge and I am sure you are as well.

Finally, as we begin this journey, let me offer you all an invitation to visit Colombia in the months ahead. Colombians and Louisianans share a love of fine food and great music. These are part of our cultures and identities. We may enjoy different flavors and listen to different rhythms, but we both want to reach beyond our borders to develop business opportunities and create entrepreneurial partnerships. There’s no better time for us to meet and see how together we will foster the next generation of trade, investment, jobs and progress.

Thank you.

Email this page to a friend