Since the President’s window for submitting the Colombia Free Trade Agreement to Congress in time to trigger a vote is rapidly shrinking, today’s Free Trade Fact of the Day will focus on the consequences of what will happen if protectionist forces win in Congress. From CATO’s Center for Trade Policy Studies:
A comprehensive trade agreement would also benefit Colombia by opening its market to more import competition, encouraging more foreign investment, and strengthening its ties to the world’s largest economy. If Congress were to reject such an agreement, it would inflict real pain on the Colombian economy and workers. A recent study by the University of Antioquia shows that not approving the FTA would decrease investment by 4.5 percent in Colombia. Furthermore, it would increase unemployment by 1.8 percentage points, representing a net loss of 460,000 jobs. GDP would go down 4.5 percent, and the poverty level would rise by 1.4 points.
With Venezuela’s Hugo Chavez actively trying to overthrow the democratically elected President of Venezuela Alvaro Uribe, the U.S. cannot afford to abandon a key South American ally at this time.