Michigan and the FTA with Colombia

The man approached me with a smile on his face. "Buenos noches," he said. I returned his greeting also in Spanish. We met previously at another of these social events, but only spoke briefly. He was an enthusiastic member of the current ruling political party in Colombia.

Switching to English he said, "Good news isn't it. Your House approved the TLC."

TLC is the way Colombians refer to the Free Trade Agreement between the U.S.A. and Colombia. This is also the agreement that during his campaign for the Oval Office President Obama stated many times he was against. But now he sent it to the House of Representatives.

The easiest and safest answer would have been for me to just say, "Yes," and move on to another topic. I am a graduate of Fenton High School who has lived in Colombia seven years. The FTA with Colombia is something that has interested me since first negotiated under the Bush administration. Since then I read the entire thing. Next I researched the results of similar agreements with other countries like Mexico, Vietnam and Peru. Interesting is that unions, human rights groups and religious groups, not just in the U.S.A., but around the world have weighed in against the agreement. In fact I have never seen so much world pressure against any free trade agreement. One of their sticking points is that for over a decade now Colombia has lead the world in the murders of union members. In 2010 the country easily accounted for over 50% of the deaths of union members in the entire world. Pro agreement people usually state that the country deserves the FTA because it is making progress and to support our ally in South America.

"You would want things that are best for your fellow countrymen?" I asked the man.

"Yes," he replied.

"Well, I'm from Michigan, a State that has been hit harder than most by the economic downturn.  The people there are my relatives and my friends. The TLC will cost more jobs in Michigan that it will create."

The man's eyes went down and his lips turned in some. After a little time he said, "I know." Colombians are very kind people socially and before leaving the man said, "I hope you find a way to help those who will lose their jobs."

Those in favor of the agreement have made many arguments of why it should be passed.  When put under scrutiny the arguments usually fail. This includes comments like it will reduce drugs and that stipulations written into the FTA will protect Colombian workers.

I cannot speak for the Free Trade agreements with Panama or Korea that have also cleared the House and are awaiting President Obama's signature. I have not studied them in detail. But there is zero doubt in my mind that my Michigan will suffer more than gain from the Colombian FTA.

Michigan Congressman Sander Levin, who has visited the South American country several times, also believes the deal is a bad one. Recently the following appeared in an Email to his constituents.
     Rep. Levin led the opposition to the agreement, citing the lack of basic labor rights in Colombia and the failure of Colombia’s government to fully implement reforms they agreed to make in an Action Plan of Labor Rights earlier this year.
    During the debate on the House Floor, Rep. Levin said, “Workers in Colombia have long been without basic labor rights.  More than any other democracy on the globe, there have been extreme levels of violence against workers and their leaders.  There’s been a near-universal lack of justice for murders of union activists.  And there have been extensive flaws in Colombian labor law and practice.

Economist Ian Fletcher author of the book "Free Trade Doesn't Work: What Should Replace it and Why" wrote in an recent article that the Colombian government works with right-wing death squads that hunt and kill union leaders.

Gustov Petro, a Colombian congressman of the minority party in Colombia, said about the FTA that it will benefit Colombia's big narco-traffickers, and not its small farmers or businessmen.

James P. Hoffa stated that the trade agreement with Colombia would protect the interests of corporate investors while weakening workers' rights.

There is no doubt that Colombia is a disaster concerning both human and workers rights. Political corruption was bad before and international reports shows it increasing significantly over the last several years. But my question is not about Colombia and whether they deserve to have an agreement with the USA or not. My concern is if the FTA will help or hurt the workers in Michigan, not the corporations or rich, but the workers.

A U.S.A. trade representative said that Michigan workers would benefit by sending cherries and car parts to Colombia. My brother-in-law lost his job when his plant closed to make car parts in South America because of cheaper wages. When I went to the Chevrolet dealership in Bogotá to get parts for my wife's car, they told me that all the parts came from Venezuela. As for sending cherries - well, Colombia has over 150 fruits including cherries that are very inexpensive. The other day I purchased a bag of cherries from a street vendor for one-fifth what they sell for in Michigan.

To purchase Michigan products there needs to be a market with disposable income. Colombia has 43 million people. However minimum wage in the country is approximately $217 a month for working 48 hours a week (about $1.15 an hour) and 50% of the population makes that amount or less. Even the other 50% is limited in income as Colombia has one of the largest disparities of wealth in the world.

That disparity comes into play in another way that Americans might not understand. When I first came to Colombia locals told me that it would take five years for me to understand the culture and the way things really worked. At the beginning I thought like an American that if a seller got a reduced price on an object that they would pass at least part of the savings on to the customer and make more money by selling more. What I discovered and has been confirmed by many people I have spoken with who have lived in Colombia over 50 years is that the wealthy keep the entire savings for themselves and may even increase the price. They make their profit on the single piece and not by increasing sales with lower profits. What that means then is that just because a U.S. based manufacturer may be able to get his product into Colombia for less, that there is less likely to be an increase in sales that will contribute to employing more workers.

Now let's look at the obvious. A company can pay a Michigan worker a minimum of $7.25 an hour or they can pay less than $2 an hour to a Colombia worker. Now add to it that the Colombian workers are often literally in fear of their life to collectively bargain for safer working conditions or better wages. In fact an American company closing U.S. plants and moving to Colombia has already happened. Owens Illinois closed their glass plants in Godfrey, Illinois, putting hundreds out of work, and moved production to Colombia.

I am not against an FTA with Colombia. In fact it could be good for both countries. I just disagree with this particular agreement at this time. History shows us that trade agreements with the same or similar wording have cost more American jobs than they have created and have adversely affected our balance of trade. If President Obama is really interested in helping the working man he will renegotiate the agreement to make it more about the workers and less about petroleum companies and other corporations getting financial perks. The United States should not tell other countries how to govern themselves. However, especially in trade agreements, we should make sure that our workers are protected. That means that at times we should set measurable objective benchmarks.  Former ambassador to Colombia, Myles Frechette, said, "The U.S. should never betray its own values, not even to assist an ally." In the case of Colombia then those benchmarks must include undeniable proof of sustained years of not being the number one murderer in the world of union members and a massive reduction of corruption as based upon independent international gauges.