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Colombian Trade Treaty - Essay Example

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Colombian trade treaty or U.S.-Colombia Free Trade Agreement that was signed in 2006 aims at eliminating duties by 80% of the total number of exports. This refers to United States of America exports that are both industrial and agricultural to Colombia. Also, other tariffs are…
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Colombian Trade Treaty
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May 8th Colombian Trade Treaty Colombian trade treaty or U.S.-Colombia Free Trade Agreement that was signed in 2006 aims at eliminating duties by 80% of the total number of exports. This refers to United States of America exports that are both industrial and agricultural to Colombia. Also, other tariffs are to be scraped off in a ten year period (“Benefits of the U.S.-Colombia Trade Promotion Agreement” 1). The agreement seems to be more in favor of the United States than Colombia.
U.S. benefits
The trade agreement will greatly help in the creation of employment opportunities to the American citizens. Moreover, the market will also be expanded and consequently will competitiveness in general U.S businesses due to the large market created. Considering the fact that the United States account for most of the imports that Colombia receives, elimination of tariffs and other barriers to U.S exports will be advantageous to the U.S. because there will be less spending in regard to customs duty. The U.S. shall also in be a position to increase the number of goods it exports that will have a significant increase in the American jobs created. This is because increase in jobs will be as a result of increased market and increased demand for goods (“Benefits of the U.S.-Colombia Trade Promotion Agreement” 1).
Furthermore, American investors will have an opportunity to be protected from unfair practices and treatment in Colombia. This means that, American investors will have an open and level field to conduct their business, and also have a neutral means to settle any disputes that occur as a result of investing. In addition, those (American investors) taking part in procurement business have a guarantee to be treated fairly and in a nondiscriminatory manner when it comes to providing services and products to government agencies and public service (‘Benefits of the U.S.-Colombia Trade Promotion Agreement” 3). As a result of having a free trade agreement, the long term economic benefits towards the U.S. will be in excesses because trade between Colombia and itself accounts for less than 1% of the total trade. Thus, scraping tariffs for imports from Colombia will be more of a way to find market for its surplus and financial benefits.
Colombian sacrifices
Colombia stands to lose a lot despite the other gains made from the trade agreement. The agreement sets an unfair trade relationship with its basis on rules undermining the wellbeing of its people. This is because farmers remain worried that they will be driven out of business and more into poverty, due to imports of cheap goods which are especially agricultural products. Colombian farmers barely get enough pay despite making the country achieve food security, as a result of the agreement, subsistence farmers will be hard hit due to cheap imports (Rusu par. 3).
In addition, scraping the import duty will bring down the prices of goods and lower the rate of competition between locally made goods, and those of imports. As a result, increase in rural poverty will be inevitable where rural poverty in Colombia plays a significant role in the increase of crime rate and armed conflict. Therefore, farmers will have no choice, but to take up coca farming (Sequera & Bajak par. 12); reducing food security and increasing the crime rate (Rusu par. 5). The signing of the deal also undermines the efforts made by the government to eradicate drug trafficking, and the problem of armed conflict to waste. Thus, this agreement will only serve to accelerate the problem of poverty and inequality in Columbia.
The Colombian trade treaty may of much help to both countries involved but has its own setbacks, and biases to both sides involved. This is because the way it is structured the Americans stand to benefit while the Columbians may end worse than they were before the agreement.

Work Cited
Rusu, Laura. US-Colombia Free Trade Agreement a Step Back for Development. 2011.Web. May 8 2012. .
Sequera, Vivian & Bajak, Frank. Colombia trade agreement worries small farmers. 2011. Web. May 8 2012. .
Benefits of The U.S.-Colombia Trade Promotion Agreement. n.d. Web. May 8 2008. Read More
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