Business

Too soon to blame FTA for drop in Colombia’s export growth rate: US

posted by Zach Edling
Too soon to blame FTA for drop in Colombia’s export growth rate: US

Ron Kirk (Photo: White House)

Despite a significant drop in the growth rate of Colombia’s export to the United States, it is too early to blame the recently signed free-trade agreement, said U.S. Trade Representative Ron Kirk on Wednesday.

Kirk claimed earlier that the FTA had yielded “positive results” for both Colombia and the United States. Colombian goverment statistics, however, suggest that results were better before the free-trade agreement.

In the first nine months of 2010, prior to implementing the agreement, Colombia’s exports to the United States grew nearly 34%. In the same period in 2011, they grew 29.3%. The free-trade agreement between the two countries was signed in May and in the first nine months of 2012 exports grew 6.7%.

According to Kirk, “it is premature to assess the full range of benefits that will flow from the agreement. In addition, month-to-month trade data is very volatile and subject to various factors including seasonal influences,” the U.S. trade representative told Colombia Reports.

Conversely, Colombian imports from the U.S. have increased 20% this year. Or as Kirk put it during his Tuesday press conference, “a classic win-win situation.”

Despite the rhetoric, growth rates have dropped more than 25 percentage points since 2010. The drastic decrease has coincided with a reduction in the United States’ appetite for Colombian coal and oil. Compared to last year, U.S. imports of Colombian coal dropped by a third. From October 2011 to August 2012, Colombian oil imports to the U.S. fell 5,251mbbl (thousand barrels a month).

The U.S./Colombia free-trade agreement was originally signed back in 2006. The implementation was delayed by the United States Congress allegedly because of Colombia’s history of violence against labor unions.

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