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64–142 PDF 

" ! COMMITTEE PRINT 

112TH CONGRESS

1st Session 

S. PRT. 

2011

112–4 

LOSING JOBS AND ALIENATING FRIENDS: THE 

CONSEQUENCES OF FALLING BEHIND ON FREE 

TRADE WITH COLOMBIA AND PANAMA 

A REPORT 

TO THE MEMBERS 

OF THE 

COMMITTEE ON FOREIGN RELATIONS 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

FEBRUARY 8, 2011 

Printed for the use of the Committee on Foreign Relations 

Available via World Wide Web: http://www.fdsys.gpo.gov 

COMMITTEE ON FOREIGN RELATIONS

JOHN F. KERRY, Massachusetts, Chairman

BARBARA BOXER, California 

ROBERT MENENDEZ, New Jersey 

BENJAMIN L. CARDIN, Maryland 

ROBERT P. CASEY, JR., Pennsylvania 

JIM WEBB, Virginia 

JEANNE SHAHEEN, New Hampshire 

CHRISTOPHER A. COONS, Delaware 

RICHARD J. DURBIN, New York 

TOM UDALL, New Mexico 

RICHARD G. LUGAR, Indiana 

BOB CORKER, Tennessee 

JOHNNY ISAKSON, Georgia 

JAMES E. RISCH, Idaho 

JIM DEMINT, South Carolina 

JOHN BARRASSO, Wyoming 

JAMES M. INHOFE, Oklahoma 

FRANK G. LOWENSTEIN, Staff Director

KENNETH A. MYERS, JR., Republican Staff Director

(II)

C O N T E N T S 

Page 

Letter of Transmittal ............................................................................................... v 

Background .............................................................................................................. 1 

Observations ............................................................................................................. 3 

Conclusion ................................................................................................................ 7 

Appendix I ................................................................................................................ 9 

Appendix II ............................................................................................................... 11 

Appendix III ............................................................................................................. 17 

Appendix IV ............................................................................................................. 18 

(III)

LETTER OF TRANSMITTAL 

UNITED STATES SENATE, COMMITTEE ON FOREIGN RELATIONS, Washington, DC, February 8, 2011. 

DEAR COLLEAGUES: I directed my senior Senate Foreign Relations Committee staff member for Latin America and the Caribbean, Carl Meacham, to travel to Panama and Colombia from January 18 to 21, 2011, to assess the consequences of U.S. failure to 

ratify Free Trade Agreements (FTAs) with these countries. 

As Congress debates renewal of trade preferences for Colombia, 

which are due to expire on February 12, 2011, under the Andean 

Trade Preference Act (ATPA), it should also consider the importance of retaining U.S. competitiveness in Latin America through 

approval of the pending FTAs. During President Obama’s recent 

State of the Union Address, he advocated for passage of the South 

Korea Free Trade Agreement and mentioned his interest in advancing the Panama and Colombia FTAs. This was an important 

development, but the President needs to do more to build support 

in Congress for the agreements with Panama and Colombia. 

I have been a strong supporter of the Panama-United States 

Trade Promotion Agreement (TPA) and the United States-Colombia 

Trade Promotion Agreement (CTPA) since their signing. Approval 

of these free trade agreements would eliminate trade barriers and 

facilitate access for U.S. exporters in these countries. Delay has already resulted in significant loss of market shares and jobs for U.S. 

businesses. 

In Panama, large-scale projects, such as the $5.25 billion Panama Canal Expansion, the $1.5 billion Panama City Metro, and 

hundreds of millions of dollars in highway expansion contracts, 

have been awarded to non-American firms. The United States recently lost its position as Colombia’s number one agricultural supplier. Total U.S. agricultural exports to Colombia decreased from 

$1.8 billion in 2008 to $827 million in 2010. Meanwhile Argentina’s 

total agricultural exports to Colombia increased from $457 million 

in 2008 to $1 billion in 2010. Ratification of the free trade agreements would help to reverse these trends and solidify market opportunities for U.S. goods and services. 

(V)

vi 

The United States is being displaced in South America as the 

preferred and logical trading partner. U.S. market share is being 

lost to China, Brazil, and other countries in Latin America that 

benefit from trade accords with Colombia. When the ColombiaCanada FTA is implemented, as early as this summer, the immediate effect is likely to be the replacement of U.S. wheat in Colombia with lower-priced, duty-free Canadian wheat. FTA tariff reductions will also benefit Canadian heavy equipment and other capital 

good exports to Colombia at the expense of U.S.-manufactured 

products, which still face tariffs ranging from 5 to 20 percent. As 

non-U.S. goods and services effectively gain preferential access to 

these economies, the United States will lose significant opportunities. 

Beyond the compelling economic arguments, these FTAs are important to U.S. influence and standing in the region. Continued 

delay on a matter of such importance to our allies calls into question U.S. reliability. The FTAs are increasingly considered by Panamanians and Colombians as a crucible in the bilateral relationships. They serve as a symbolic litmus test of U.S. commitments 

to its friends in a neighborhood where various countries are taking 

sharply divergent paths. 

The United States not only enjoys a long-standing bilateral relationship with Panama but a particularly close partnership with 

Colombia. This Andean country promotes and adheres to representative democracy and open markets at a time when some of its 

neighbors ignore these principles. Without the FTA, we risk diminishing a constructive alliance with a country that has achieved so 

much in cooperation with the United States. 

For the first time, nations such as Chile, Mexico, Peru, and 

Colombia are promoting joint efforts to expand intraregional trade 

and business ties as well as commerce with Asia. Failure to conclude an FTA with Colombia, a nation that shares our democratic 

values and economic development priorities, would signal U.S. neglect for like-minded allies within an ideologically divided hemisphere. 

Mr. Meacham’s report provides significant insight and important 

recommendations to advance U.S. interests in Latin America. I 

hope you find the report helpful. I look forward to working with 

you on these issues and welcome any comments you may have. 

Sincerely, 

RICHARD G. LUGAR, 

Ranking Member. 

(1) 

1 Villareal, M. Angeles. The Proposed U.S.-Colombia Free Trade Agreement. Congressional 

Research Service Report for Congress, October 1, 2010. 2For example, see witness testimony from the January 25, 2011, Hearing at the House Committee on Ways and Means on Hearing on the Pending Free Trade Agreements with Colombia, 

Continued 

LOSING JOBS AND ALIENATING FRIENDS: THE 

CONSEQUENCES OF FALLING BEHIND ON 

FREE TRADE WITH COLOMBIA AND PANAMA 

From January 18 to 21, 2011, Senate Foreign Relations Committee minority staff traveled to Panama City, Panama, and 

Bogota ́, Colombia. During this official visit, staff met with senior 

government officials, U.S. Embassy officials, trade associations, 

think tanks, the local private sector, and representatives of U.S. industry. At the request of Senator Lugar, the Committee Ranking 

Member, the purpose of the trip was to assess the economic and political consequences of U.S. inaction on pending free trade agreements. 

BACKGROUND

Both Colombia and Panama are awaiting U.S. congressional approval of free trade agreements (FTAs) that were signed in 2006 

and 2007, respectively. These comprehensive agreements would 

eliminate tariffs and other barriers on U.S. exports and services. 

THE UNITED STATES-COLOMBIA TRADE PROMOTION AGREEMENT (CTPA)

As the fifth-largest economy in Latin America with a population 

of 45 million, Colombia ranks 22nd among U.S. export markets and 

27th in the world as a source of U.S. imports. U.S. exports to Colombia totaled $9.4 billion in 2009, while U.S. imports totaled $11.3 

billion.1 Within Latin America, Colombia is the third-largest exporter of oil to the United States (after Mexico and Venezuela) and 

the third-largest destination for U.S. products (behind Mexico and 

Brazil). Colombia, which has the third-largest population in the region and a growing middle class, is an increasingly attractive foreign investment market. 

About 90 percent of U.S. imports from Colombia already enter 

the United States duty-free under the Andean Trade Preference 

Act (ATPA), a unilateral trade preference program designed to promote alternatives to illegal drug production as sources of economic 

growth. Many U.S. exports to Colombia, on the other hand, face duties as high as 35 percent, leading the U.S. business community to 

argue that an FTA with Colombia would level the playing field by 

providing U.S. producers equal access to the Colombian market.2

2 

Panama, and South Korea and the Creation of U.S. Jobs: http://waysandmeans.house.gov/Calendar/EventSingle.aspx?EventID=220430. 3 United States International Trade Commission (USITC), U.S.-Colombia Trade Promotion 

Agreement: Potential Economy-wide and Selected Sectoral Effects, Publication 3896, December 

2006. 4 Hornbeck, J.F. The Proposed U.S.-Panama Free Trade Agreement. Congressional Research 

Service Report for Congress, January 6, 2011. 

The United States-Colombia Trade Promotion Agreement (CTPA) 

would immediately eliminate duties on 80 percent of U.S. exports 

of consumer and industrial products to Colombia. An additional 7 

percent of U.S. exports would receive duty-free treatment within 5 

years of implementation, and most remaining tariffs would be 

eliminated within 10 years of implementation. The agreement also 

contains provisions on customs administration and trade facilitation, technical barriers to trade, government procurement, investment, telecommunications, electronic commerce, intellectual property rights, and labor and environmental protection. 

Regarding agricultural trade, Colombia currently applies tariff 

protections on all agricultural products, including some that exceed 

100 percent. The pending CTPA, upon implementation, would provide immediate duty-free access on 77 percent of all agricultural 

tariff lines, accounting for 52 percent of current U.S. exports to Colombia. Colombia would eliminate most other tariffs on agricultural 

products within 15 years, while the United States would make permanent the ATPA preferences for Colombia’s agricultural exports. 

A congressionally mandated report by the United States International Trade Commission (USITC) concluded that the primary 

impact of a free trade agreement with Colombia would be increased 

U.S. exports to Colombia as a result of enhanced U.S. access to the 

Colombian market.3 The largest estimated increases in U.S. exports to Colombia, by value, would be in chemical, rubber, and 

plastic products; machinery and equipment; and motor vehicles and 

parts. In terms of percentage increases, the largest increases in 

U.S. exports would be in rice and dairy products. 

Some of the congressional debate surrounding the U.S.-Colombia 

FTA has centered on concerns about violence against union members in Colombia. Members who support the CTPA argue that Colombia has made significant progress in recent years to curb violence and address the country’s most pressing human rights issues. 

(See Appendix II for a detailed list of advancements in human 

rights and labor issues. This information was gathered by staff 

from multiple sources, including the Government of Colombia, Colombia’s Vice Presidency, the Colombian Ministry of Interior and 

Justice, Office of the Prosecutor General, and the Ministry of Social 

Protection. The International Labor Organization served as an additional source.) 

THE PANAMA-UNITED STATES TRADE PROMOTION AGREEMENT (TPA)

With a population of 3.5 million people, Panama represents a 

much smaller market for the U.S. than Colombia. Nevertheless, it 

maintains a stable economy and historically close ties to the United 

States, even following the transfer of the Canal to Panama in 1999. 

The United States is Panama’s single largest source of imports, 

while Panama is one of the few Latin American countries with 

which the United States has a merchandise trade surplus.4

3 

5 USITC, U.S.-Panama Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects, Publication 3948, September 2007. 6 Hornbeck, J.F. The Proposed U.S.-Panama Free Trade Agreement. Congressional Research 

Service Report for Congress, January 6, 2011. 7 Information provided by U.S. Embassy in Colombia. 

The U.S.-Panama TPA would result in significant liberalization 

of trade in goods and services, including financial services. Over 88 

percent of U.S. exports of consumer and industrial goods to Panama would become duty-free immediately, with remaining tariffs to 

be phased out over 10 years. Like the FTA with Colombia, it also 

includes provisions relating to customs administration and trade 

facilitation, technical barriers to trade, government procurement, 

investment, telecommunications, electronic commerce, intellectual 

property rights, and labor and environmental protection. 

A USITC study found that the likely main trade effect of the 

FTA would be to increase U.S. exports, given that 96 percent of 

U.S. imports from Panama already enter duty-free. Detailed estimates suggest that when fully implemented, the largest growth 

will accrue to U.S. exports of rice, pork, beef, and passenger vehicles.5

Congressional concerns have focused on Panama’s alleged status 

as a ‘‘tax haven.’’ This issue was addressed with the signing of a 

U.S.-Panama Tax Information and Exchange Agreement (TIEA) on 

November 30, 2010. The TIEA permits either country to request information on most types of federal (U.S.) or national (Panama) 

taxes. Its purpose is to enhance tax information transparency, an 

important element in combating illegal financial transactions, including those linked to drug smuggling and money laundering. The 

agreement does not enter into force until Panama changes its tax 

code, which it has committed to do by the end of 2011.6

OBSERVATIONS

Staff believes that three U.S. policy priorities will be affected if 

Congress does not ratify the U.S.-Colombia and U.S.-Panama Free 

Trade Agreements. First, in an ailing economy, our ability to create 

jobs depends largely on expanding domestic and international commerce. The FTAs would create jobs, while the failure to approve 

the FTAs would lead to a loss of U.S. jobs and market share. Second, if we fail to pursue ratification of the Colombia FTA, we will 

likely miss an opportunity to expand on gains achieved through 

Plan Colombia on issues of human rights and labor in Colombia. 

Lastly, without the FTAs, the U.S. loses credibility and diminishes 

its ability to influence countries in Latin America. 

LOSING MARKETS IN COLOMBIA

Colombia buys more U.S. products than many important U.S. 

trade partners, including Russia, Spain, and other mid-sized economies. In the past 2 years, however, the United States has lost $1 

billion in agricultural exports to Colombia due to regional accords 

and international commercial competition.7 Staff believes that despite strong historical ties between our two countries, and with 

heightened demand for commodities produced in Colombia, other 

trading opportunities are presenting themselves. Colombia, like the 

4 

8Foreign Affairs and International Trade Canada, http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/andean-andin/can-colombia-colombie.aspx 

rest of Latin America, has not waited for the U.S. to ratify trade 

agreements while other attractive options have become available. 

Because of its own trade accord with Colombia, MERCOSUR (the 

Southern Common Market, made up of Argentina, Brazil, Paraguay, and Uruguay) continues to expand its exports and make significant market-share gains in Colombia’s agricultural sector [see 

Appendix III for Colombia’s agricultural import statistics]. For the 

first time in U.S.-Colombian agricultural trade history, the U.S. 

has lost its position as Colombia’s number one agricultural supplier 

to Argentina. Total U.S. agricultural exports to Colombia decreased 

from $1.8 billion in 2008 to $827 million in 2010, while Argentina’s 

total agricultural exports to Colombia increased from $457 million 

in 2008 to $1 billion in 2010. 

The dramatic loss of U.S. market share is primarily in grains 

(corn, wheat, and soybean meal) and is likely to continue as evidenced by agricultural trade gains made by most countries in the 

region (Brazil, Canada, Chile, Ecuador, Bolivia, Peru, and Mexico). 

According to senior officials at the U.S. Embassy in Bogota ́, 

MERCOSUR countries currently receive a 9-percent tariff discount 

for their grain exports, while U.S. grain exporters pay the full price 

under a price band system. The WTO-inconsistent price band system would be eliminated immediately upon implementation of the 

U.S.-Colombia FTA. 

Moreover, Colombia and Canada have approved a free trade 

agreement that will enter into force this year. According to the 

Government of Canada, the FTA with Colombia ‘‘will stimulate the 

growth of our commercial relationship and help level the playing 

field for Canadian business vis-a-vis competitors who have or are 

seeking preferential market access in Colombia.’’ 8 In contrast, U.S. 

business will continue to lose market share. For example, in staff’s 

meetings with representatives of Archer Daniels Midland Company 

(ADM) in Bogota ́, ADM representatives indicated that the United 

States could lose its entire wheat-market share in Colombia following implementation of the Canada-Colombia FTA—a scenario of 

great concern to the U.S. wheat industry. 

The U.S.-Colombia trade relationship does not exist in a vacuum. 

In South America, China has replaced the United States as Brazil’s 

largest trading partner. According to an analysis of trade statistics 

by the Private Sector Competitiveness Council, China has increased its exports to Colombia by 224 percent during the first 9 

months of 2010. Today, China is Colombia’s second largest trading 

partner after the United States [see graph in Appendix IV of the 

projected market share gain of China in Colombia]. The Council 

predicts that China will supplant the United States as the leading 

trade partner within 10 years if current trends continue without a 

U.S.-Colombia FTA. In addition, Canada, Chile, Mexico, and many 

European nations are expanding their presence in Colombian markets as a result of their own trade accords. According to Colombian 

Government officials, the U.S. is losing to Brazil in mega-construction projects both in Colombia and in neighboring countries. Colombia is currently negotiating trade deals with South Korea and 

5 

Panama and has plans to conclude other trade agreements, including one with Japan. 

LOSING INFLUENCE IN COLOMBIA

Failure to gain approval of the FTA has broad implications. If 

the United States fails to ratify the FTA with Colombia, the U.S. 

Government is likely to lose an opportunity to further Colombia’s 

progress in improving respect for human rights and lowering violence through enforceable commitments on trade-union protection 

and reforms of existing labor legislation. 

While significant security gains were made during the administration of Alvaro Uribe, President Juan Manuel Santos has demonstrated with concrete measures that labor and human rights are 

top priorities of his government. In an unprecedented action, President Santos proposed legislation to offer reparations to victims of 

violence and land restitution to hundreds of thousands of Colombians who lost their land due to decades of armed conflict. Also, for 

the first time, the Colombian Government has committed to examine with human rights groups all labor homicides since 2000. Especially important to pro-labor groups in this country is President 

Santos’s pending legislation to dissolve those Cooperative Work Associations (CTAs) that enable employers through sub-contract relationships to evade paying full benefits to workers. 

In addition, Colombia’s private sector is changing for the better. 

The country’s largest companies today have stronger trade-union 

relations, overseas investment, and expanding corporate-responsibility programs. As noted by Camilo Reyes, the Colombian American Chamber of Commerce Executive Director in Bogota ́, Colombian corporations have become advocates of labor and other regulations, consistent with the U.S.-Colombia FTA provisions. It is 

widely viewed that these reforms are improving employment conditions for Colombians. These same business enterprises are now regional multinationals and are investing hundreds of millions of dollars in the United States. Staff believes that it is an imperative to 

ratify the U.S.-Colombia FTA in order to fortify these job-creating 

relationships. 

Absent the FTA, the U.S. Government will likely lose political 

leverage with Colombia apart from historical ties that count for 

less each day. Colombia—now a member of the United Nations Security Council—is increasingly looking outward for both new commercial relations and political support. As mentioned to staff by a 

senior Colombian Government official, ‘‘where the money goes, the 

political influence seems to go as well.’’ 

FRUSTRATION IN PANAMA

Senior Panamanian Government officials are feeling frustrated 

and betrayed after the publication of statements attributed to the 

U.S. Trade Representative indicating that a push to ratify the Panama FTA at the same time as South Korea’s would be a ‘‘huge mistake.’’ Senior government and private-sector officials informed staff 

that Panama has done everything asked of it, and they expressed 

their disbelief about the perceived unwillingness of the Obama 

administration to expand, or even maintain, a commercial relationship that grants the United States a $4 billion trade surplus. 

6 

In a conversation with staff, Foreign Minister Juan Carlos 

Varela expressed the view that Panama would be ‘‘very frustrated’’ 

if the FTA is not moved in the next 3 months. Noting that Panama 

had addressed FTA-related requests and has been a strong partner 

on security issues, he said Panama ‘‘has done everything you 

asked.’’ 

Moreover, Minister of the President Jimmy Papadimitriu (thirdhighest government official) told staff that President Martinelli’s 

administration remains committed to resolving all of the issues 

that have been cited as reasons not to send the FTA to Congress. 

In this regard, legislation to implement the Tax Information Exchange Agreement (TIEA) was approved by the Cabinet on January 

18, 2011. Staff was told by other senior Panamanian Government 

officials that it is expected to be passed by the National Assembly 

by mid-February, 2011. 

The Martinelli administration has sent to Panama’s National 

Assembly legislation focusing on the importance of ‘‘knowing your 

client’’ (partially addressing tax-haven concerns), the right to collective bargaining in economic processing zones (addressing one of 

three labor concerns), and the right for unions to strike in companies less than 2 years old. Regarding the remaining labor concern, 

senior Panamanian Government officials reiterated that the 

Martinelli administration (supported by Panama’s business and 

labor movement) would not introduce legislation which would reduce the number of members needed to start a union from 40 to 

20. 

U.S. officials at the U.S. Embassy in Panama City explained that 

the Martinelli administration made a policy decision to extricate 

Panama from the tax haven notice process of the Organization for 

Economic Co-operation and Development (OECD) as part of its 

efforts to create an environment conducive to the passage of the 

FTA by the U.S. Congress. It has pursued with OECD members 

signature of 13 double-taxation treaties, which include fiscal information exchange clauses, and it signed on November 30, 2010, a 

Tax Information Exchange Agreement (TIEA) with the United 

States. According to Panamanian Government officials, the 

Martinelli administration’s interest in the country’s extrication 

from the notice process was necessary not only to remove a stigma 

from Panama’s financial sector, but also to build confidence and 

transparency in the banking sector. 

Given the lack of movement on the FTA after Panama signed the 

TIEA, Panamanian officials were outraged. Minister Papadimitriu 

and Minister of Commerce and Industry Roberto Henriquez both 

explained that they had been given a list of conditions relating to 

the FTA, which were delivered by Dan Restrepo, President 

Obama’s senior aide for the Western Hemisphere, in June 2009. In 

reaction, Minister Henriquez said that ‘‘Panama has given what 

was requested and has received nothing in return.’’ He further 

noted that U.S. inaction on the FTA was ‘‘pushing Panama away’’ 

and that the current course would damage commercial relations. 

He also referenced the agreements with Canada and the European 

Union as potentially reducing U.S. sales in the short term. 

Asking rhetorically, ‘‘where is the U.S.?’’, Henriquez highlighted 

the mega projects that have been awarded to non-American firms. 

7 

Henriquez also pointed to Panama’s growing economy (34 consecutive quarters of economic growth) and its increasing regional links 

(such as aviation expansion that led Copa Airlines to purchase over 

$2 billion of Boeing aircraft), and asked why the United States is 

isolating itself from this economic opportunity. He said that exports 

from Panama ‘‘will not take a single job’’ from the United States 

since virtually all of its exports already receive duty-free treatment, 

and that U.S. exports to Panama will only increase with the tariff 

reduction contained in the FTA. 

CONCLUSION

In the 2011 State of the Union address, President Obama affirmed his support for free trade agreements as tools to improve 

U.S. competitiveness and to create jobs. Yet he neglected to offer 

a timetable for the long-delayed ratification of the accords with Colombia and Panama, in contrast to his call for approving the South 

Korea deal ‘‘as soon as possible.’’ Nor has the President made an 

effective push in the U.S. Congress to persuade skeptical Members 

of the benefits of these accords. In an era of divided government, 

however, these two agreements provide an opportunity for bipartisan cooperation on the administration’s stated goal of doubling 

exports in 5 years. 

At stake are U.S. commercial and political interests in the Western Hemisphere. While many analysts have framed the FTAs in 

terms of benefits for the United States, the agreements are now vitally important for preventing further losses—in market share, 

jobs, and influence. Staff, therefore, strongly encourages the administration to invest the political capital needed to gain their ratification in the House of Representatives and the Senate. 

Central to this effort will be addressing criticisms of Colombia’s 

human rights record, which linger despite the dramatic improvements achieved over the past decade. When staff asked senior Colombian trade officials if they would consider meeting additional 

conditions, especially given that some of the opposition to ratifying 

the FTA is regarding human rights, they answered flatly, ‘‘Maybe 

before we would have. But the context has changed. Today, everybody wants this market, as is.’’ Further delays on the FTA only reduce U.S. relevance regarding Colombia’s labor reforms and other 

human rights issues. Even following congressional ratification, the 

U.S. Government will continue to maintain leverage during the implementation phase, when Colombia would be required to change 

its laws to comply with the FTA provisions. In the case of the U.SPeru Free Trade Agreement, this implementation process took 

nearly 1 year. 

The political implications of losing influence in Colombia are 

real—losing Colombia means losing an important ally who has 

demonstrated steadfast support for critically important U.S. policies in the region and around the world. With Canada and the European Union’s economic interests in Colombia set for ‘‘take-off,’’ 

and with MERCOSUR and China’s growing economic and political 

interests looming, our delay on the FTA is helping to accelerate a 

broader realignment in regional affairs, one not necessarily in the 

U.S. interest. 

8 

While Colombia and Panama implement agreements with other 

trade partners, inaction leaves the United States at a competitive 

disadvantage precisely when our economy requires solutions that 

promote job creation and growth without deficit spending. Because 

the U.S. market is already largely open to both countries’ imports 

due to unilateral trade preference programs, continued delay only 

hurts U.S. exports and services. It is not too late to reverse marketshare losses, rescue relations with key allies, and regain our status 

in Latin America, but the clock is ticking. We must act now. 

(9) 

A P P E N D I X E S 

Appendix I 

CONTRIBUTOR

Kezia McKeague, Legislative Assistant, Committee on Foreign Relations, United States Senate 

MEETINGS WITH INDIVIDUALS IN COLOMBIA

U.S. DIPLOMATS

P. Michael McKinley, Ambassador to Colombia 

Joe Lo ́pez, Counselor for Agricultural Affairs 

Margaret Hanson-Muse, Senior Commercial Officer, Foreign 

Commercial Service 

Tim Stater, Economic Counselor 

COLOMBIAN GOVERNMENT OFFICIALS

Paula Caballero Go ́mez, Foreign Ministry Director of Economic, 

Social, and Environmental Affairs 

Santiago Pardo, Chief FTA Negotiator at the Trade Ministry 

Juan Carlos Pinzon, Chief of Staff to the President 

Juan Mauricio Ramı ́rez, Deputy Director General, National Planning Department (DNP) 

OTHER INDIVIDUALS AND GROUPS

Imelda Restrepo, Economic Studies Director at the National Industry Association (ANDI) 

Rosario Co ́rdoba, President of the Private Sector Competitiveness 

Council 

Ricardo Duarte, attorney and former Vice Minister of Trade 

Rafael Mejia, President of the National Agriculture Association 

Mauricio Lo ́pez and Eduardo Lo ́pez, Partners with Archer Daniels Midland (ADM) 

Santiago Lo ́pez Jaramillo, Legal Affairs Director at the National 

Association of Foreign Trade (ANALDEX) 

Camilo Reyes, Executive Director of the Colombian-American 

Chamber of Commerce 

Ricardo Triana, Council for American Enterprises (CEA) Executive Director 

Juan Pablo Jimeno, Chicago, Bridge and Iron Country Manager 

Antonio Go ́mez, Caterpillar Representative 

Sergio Clavijo, President of financial think tank, ANIF 

10 

MEETINGS WITH INDIVIDUALS IN PANAMA

U.S. DIPLOMATS

Andrew Plowman, Counselor for Economic Affairs 

William Muntean, Economic Officer 

PANAMANIAN GOVERNMENT OFFICIALS

Juan Carlos Varela, Vice President and Foreign Minister 

Jimmy Papadimitriu, Minister of the President 

Roberto Henriquez, Minister of Commerce and Industry 

Francisco Alvarez de Soto, Vice Minister of Commerce for International Trade 

OTHER GROUPS AND INDIVIDUALS

Mario Jaramillo, Chairman of Concertacio ́n Nacional para 

Desarollo and Ambassador-designate to the U.S. 

Roberto Troncoso, Chairman of APEDE’s Committee on International Trade 

American Chamber of Commerce Board of Directors including 

President Juan Carlos Arias and Executive Director Maurice 

Be ́langer 

(11) 

Appendix II 

RECENT ADVANCES IN LABOR & HUMAN RIGHTS IN COLOMBIA

UNDER SANTOS ADMINISTRATION (SINCE AUGUST 7, 2010): 

• President Santos selected Angelino Garzo ́n, a long-time labor 

leader, as Vice President, tasked with human rights and labor 

issues, including oversight of land restitution. The VP is working tirelessly to inculcate the importance of respect for human 

and labor rights in all levels of government. 

• Santos & VP have opened regular dialogue with labor and 

human rights groups, repairing the poisoned relationship 

under the previous administration. They and other GOC officials have already hosted or participated in dozens of meetings 

on human rights or labor. 

Labor-Specific Advances under Santos Administration: 

• Santos will soon receive congressional approval to create a separate Ministry of Labor (currently fused with Health). The VP 

said the separate Ministry would be better able to address critical labor issues such as inspection programs, pensions, gender 

equality, better salaries and working conditions, and improved 

social dialogue. 

• The VP has been outspoken on combating violence against 

labor leaders and abuses in the workplace. 

• The GOC committed for the first time ever to work with 

human rights groups and unions to review all labor homicides 

since 2000, and to conduct jointly a first-ever census of all 

Colombian trade unions. • VP announced a plan to better protect teachers, based on a 

proposal from the national teachers’ union. The plan would 

make schools safe havens against violence. • Thanks to Santos administration efforts, a new law includes a 

dissolution mechanism for cooperative worker associations 

(CTAs, a top union concern because they allowed some employers to escape responsibilities to workers through informal subcontracting arrangements) that fail to adhere to labor law, and 

higher fines (up to $1.4 million) for CTAs and all methods of 

third-party contracting that violate the labor code. The law 

also provides a sanction mechanism for public officials that 

enter into a third-party contracting agreement with a company 

that does not adhere to labor law. • The GOC has recognized it needs to triple the number of labor 

inspectors to 1,200. 

• The GOC is aggressively building on important gains in reducing child labor in Colombia. In November, it announced an increase in government support to complement the 2008 national 

12 

strategy to prevent and eradicate child labor. The plan utilizes 

interagency coordination to promote the overall welfare of 

children—including access to education and health services. 

The GOC also supports the Families in Action program, which 

provides $360 per year to each of 2.6 million families that enroll their children in school rather than permit them to work 

illegally. 

• The VP is in preliminary discussions with the Courts to assign 

about 30 judges to focus exclusively on a range of human 

rights and labor issues. 

• Reducing informality (about 60 percent of the workforce) is a 

top Santos priority, and the GOC aims to formalize at least 

500,000 jobs by 2014. The GOC has already submitted several 

initiatives, such as the ‘‘First Job Law,’’ to this end. 

• Despite private sector objections, Santos increased the minimum wage for 2011 by 4 percent and augmented transportation allotments for workers. 

Other Human Rights-Related Advances Under Santos Administration: 

• Santos moved quickly to repair the Executive’s broken relationship with the Courts, meeting with all of the high justices on 

his first day in office and treating them with respect since. 

• Santos expended significant political capital in convincing the 

Supreme Court to fill the 18-month vacancy at the helm of the 

independent Prosecutor General’s Office by replacing former 

President Uribe’s nominees with a new slate. 

• Viviane Morales took office on January 13 as Colombia’s first 

female Prosecutor General, and the new Deputy Prosecutor 

General and Director of Prosecutors are in place. This restores 

leadership to the most crucial independent institution for ending impunity in Colombia. 

• Santos’s legislative agenda has focused on human rights, and 

has included bold legislation that seeks to get at the core of 

Colombia’s most problematic issues. 

• Santos’s proposed Victims’ and Land Restitution Law offers 

reparations for the first time to millions of Colombians who 

have suffered from decades of violence, and aims to facilitate 

the return of lands to more than 400,000 families who lost 

their land to conflict, illegal armed groups and displacement. 

Santos overcame political opposition to include victims of state 

security forces in the definition of those who will receive reparations. The GOC has initially budgeted $22 billion for implementation of this law, and has programmed consultations with 

indigenous and Afro-Colombian communities over the first half 

of 2011 to ensure their concerns are addressed in implementation. 

• In addition to the separate Ministry of Labor, Santos will soon 

receive congressional approval to create separate Ministries of 

Justice, Environment, and Housing, in order to increase focus 

on these issues. 

• Santos has also requested congressional permission to dismantle the scandal-ridden Department of Administrative SecuVerDate Nov 24 2008 11:59 Feb 04, 2011 Jkt 062931 PO 00000 Frm 00018 Fmt 6601 Sfmt 6601 S:\HEARING FILES\112TH CONGRESS, 1ST\STAFF TOPIC REPORTS\CARL\64142.TXT
13 

rity (DAS), and replace it with a more focused and disciplined 

intelligence-only agency. • Congress approved a Santos-supported law to increase the jail 

sentence to 30 years for killing human rights defenders or journalists. • The GOC presented an integral anticorruption law to Congress 

(approved by Senate, pending in House), which includes administrative, penal and disciplinary penalties, and creates two 

national committees. • The GOC presented a royalties reform law, which will share 

the royalty income from extractive industries with all of 

Colombia’s departments, focusing on the poorest regions. The 

funds will be geared toward economic development, social, infrastructure, and other projects. • Santos and VP have demonstrated their commitment to human 

rights defenders by improving their access to government institutions, expanding the program that provides them with physical protection, condemning threats against them, and publicly 

extolling their importance. • The Ministry of Interior & Justice increased the annual budget 

for its protection program by $11 million to $72 million. The 

program protects about 10,000 journalists, labor leaders, 

human rights defenders, and opposition figures; and no one 

who has participated in the program has ever been killed. • Following up on a commitment between Presidents Obama and 

Santos to broaden our relationship, Deputy Secretary of State 

Steinberg launched the High-Level Partnership Dialogue with 

Foreign Minister Holguı ́n in October. The launch included the 

first meeting of the bilateral interagency working group on 

human rights, which discussed the Land and Victims’ Law, 

fighting impunity, better protecting human rights defenders, 

intelligence reform, and other issues. The VP led the GOC’s 

delegation, which included senior officials from the Foreign, 

Defense and Interior & Justice ministries, the Presidential 

Program on Human Rights, and the Prosecutor General’s 

Office. The group will next meet in Washington in March. 

• The VP promoted and signed in November a joint human 

rights declaration with civil society, independent state entities, 

and the international community. The declaration convokes the 

parties to prepare a Human Rights Conference for December 

2011, which will establish a permanent multisector National 

Human Rights Commission to work on consensus human 

rights issues. 

• For the first time ever, the GOC included a chapter on human 

rights in its 4-year agenda and budget-setting National Development Plan. In consultation with Afro-Colombian communities, the GOC also developed a chapter on Afro-Colombian 

issues in the Plan. 

• Santos created new Presidential programs for Indigenous and 

Afro-Colombian affairs. 

• The GOC will be supporting a number of events in 2011 to increase awareness of Afro-Colombian issues, such as: March 21 

Conference against Racism and Racial Discrimination, May 21 

Day of the Afro-Colombian, October 12 Celebration of the U.N. 

14 

Year of African Descendents, October 21 Day of the AfroColombian Woman. 

• The GOC is developing a specific law to address the unique social, economic, environmental, and security needs of AfroColombians in San Andres. 

• The GOC is designing a new ambitious program to address the 

issues faced by displaced Afro-Colombian women, promoting 

their leadership and access to equal opportunity. 

• Santos has called for the prosecution of sensitive cases involving security forces. 

• Santos signed into law the new Military Penal Code, which 

will transition military justice to the oral accusatory system 

and increase transparency. 

• The Ministry of Defense established a commission to revamp 

the Military Justice System, including streamlining case transfers to civilian courts and ensuring military judges are better 

trained and more independent. 

• In December, the Ministry of Defense announced a new gender 

training and equality program, a significant step for the maledominated armed forces. 

• The Ministry of Interior & Justice meets regularly with human 

rights NGOs. The agenda for February’s meeting is for the 

NGOs to present a list of priority cases involving impunity for 

GOC followup. 

• In November, the GOC launched a new program against domestic violence. 

• The Prosecutor General’s Office created a Forced Displacement 

and Disappearance Unit in November, with 22 prosecutors and 

85 judicial police (to be increased to 120 police in February). 

• According to NGO CODHES, displacements in Colombia decreased by 8 percent in 2010 compared to 2009. 

• In December, Colombia became the 20th country to join the 

International Convention against Forced Disappearance. 

• The Santos administration in 2010 proposed several legislative 

initiatives to combat violent criminal bands (BACRIM) and bolster law enforcement: 

• Increase penalties for illegal possession of firearms 

• Criminalize gang membership and stiffen sentences for minors 

• Repeal the law that allows possession of small amounts of 

drugs 

• Allow search warrants to be executed at any time of day 

• Lengthen warrants to monitor communications 

• The Colombian National Police will grow by 20,000 officers 

over the next 4 years, and the GOC has dedicated nearly $90 

million for neighborhood policing programs. 

• The Prosecutor General’s Office has created a dedicated 

BACRIM unit with 28 prosecutors located throughout the 

country. The Santos Government and courts have designated 

30 judges that will move around the country to adjudicate 

BACRIM cases, thereby reducing the prospects of corrupting 

local judges. 

15 

Recent Advances Preceding the Santos Administration: 

• The security situation in Colombia has improved drastically 

over the past decade, with the homicide rate falling by half 

from 2002 (69.8 per 100,000 persons) to 2010 (33.5 per 

100,000). Even with these improvements, Colombia remains a 

violent place, with 15,238 total murders in 2010. • Homicides of unionists have decreased significantly: from 194 

in 2001 to about 48 in 2010 according to the National Union 

School (ENS), or from 205 in 2001 to 27 (38 if nonunionized 

teachers are included) through November 2010 according to the 

GOC. Information is scarce as to how many of these homicides 

were due to the victims’ labor affiliation and how many were 

not related to union activities. • According to the major labor confederations, approximately 

820,000 workers are currently union members. So the homicide 

rate for union members in Colombia in 2010 (5.8 per 100,000, 

using ENS figures) is almost six times lower than the national 

average for all Colombians (33.5 per 100,000). The homicide 

rate for union members in Colombia in 2010 (5.8 per 100,000) 

is also comparable to the overall homicide rate in the United 

States (5 per 100,000) • The Prosecutor General’s Office expanded its Human Rights 

Office in 2006 to include a labor sub-unit to investigate and 

prosecute cases involving crimes against union members. The 

subunit currently employs 19 prosecutors, 19 assistant lawyers, and 76 investigators who work with local prosecutors 

around the country. • Since 2000, the Prosecutor General’s Office has received 1,344 

total cases and obtained 271 convictions involving 350 individuals in crimes against unionists, with 221 (81.5 percent) of 

these convictions since the initiation of the labor subunit. 177 

additional cases are currently under investigation. • Since 2008, three specialized judges have been assigned exclusively to hear 185 labor violence cases that were chosen by a 

tripartite agreement at the International Labor Organization 

(ILO). The current VP is working to increase the number of 

judges dedicated to labor violence cases. • In 2009, Congress passed a law to increase prison sentences 

and the statute of limitations for homicides against union 

members. • From 2008 to 2010, based on International Labor Organization 

(ILO) recommendations, the GOC doubled the number of labor 

inspectors to 423. • The ILO’s high-level mission (October 2009) reported some 

progress on violence issues as well as certain labor code reforms. An ILO Committee of Experts’ 2010 report noted some 

continuing violations of labor standards, but recognized Colombia’s efforts to combat violence in general and the decrease in 

violent acts against trade unionists. The ILO also commended 

Colombia for strengthening criminal penalties and prison sentences for perpetrators of violence against union members. 

• In June 2010, the ILO announced its list of countries under observation by the Committee on the Application of Standards, 

and Colombia was not included. Colombia’s exclusion is excepVerDate Nov 24 2008 11:59 Feb 04, 2011 Jkt 062931 PO 00000 Frm 00021 Fmt 6601 Sfmt 6601 S:\HEARING FILES\112TH CONGRESS, 1ST\STAFF TOPIC REPORTS\CARL\64142.TXT
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tional considering that it had been included almost every year 

since 1989. • The National Administrative Department of Statistics reported 

an overall decrease in agricultural child labor from 17 percent 

in 2003 to 10.9 percent in 2007. • In 2004 the Ministry of Interior & Justice created the Preventive Security Program to train unionists in self-protection and 

risk reduction. • Colombia has ratified all eight of the core International Labor 

Organization (ILO) conventions. Unions are free to affiliate 

with international labor confederations. Forced or compulsory 

labor is prohibited by law. • The dismantling of drug cartels and demobilization of 

paramilitaries created a void in drug and crime businesses that 

is being filled by new, violent criminal bands (BACRIM). The 

GOC has captured over 10,000 BACRIM members and detained several senior leaders since 2006, and created an Integrated Intelligence Center against BACRIM in 2009. 

17 

Appendix III 

Colombia Agricultural Import Statistics 

Year To date: January–September 

Partner country 

United States dollars Percent share 

Percent 

change 

2008 2009 2010 2008 2009 2010 

2010/ 

2008 

World ................................... 3,997.3 3,643.4 3,891.4 100.0 100.0 100.0 –2.6 

United States ...................... 1,879.0 1,032.4 827.5 47.0 28.3 21.3 –56.0 

Argentina ............................ 456.8 736.2 1,011.2 11.4 20.2 26.0 121.3 

Brazil .................................. 170.2 305.3 311.4 4.3 8.4 8.0 83.0 

Canada ............................... 223.9 215.5 240.8 5.6 5.9 6.2 7.6 

Chile ................................... 224.9 221.2 259.3 5.6 6.1 6.7 15.3 

Ecuador ............................... 228.3 267.9 277.8 5.7 7.4 7.1 21.7 

Bolivia ................................. 218.8 200.7 254.9 5.5 5.5 6.5 16.5 

Peru ́ .................................... 92.7 159.4 150.3 2.3 4.4 3.9 62.2 

Mexico ................................. 75.8 87.8 91.5 1.9 2.4 2.4 20.8 

Others ............................. 426.8 417.0 466.6 10.7 11.4 12.0 9.3 

Source : Global Trade Atlas 

18 

Appendix IV 

Æ