Trade, Small Business and Colombia

Entrepreneurs and smaller enterprises have benefited significantly from free trade agreements brokered between the U.S. and other nations. Such agreements, and increased global trade in general, have produced greater choices in products and services (often at lower prices) for all consumers. More significantly, they have created more favorable access to overseas markets for small firms.

Lest you believe that trade and these trade deals only benefit big business, the numbers belie that assumption. According to the U.S. Small Business Administration (SBA) Office of Advocacy, small businesses "made up 97 percent of all identified exporters and produced 28.6 percent of the known export value in FY 2004."

The power of technology and the “shrinking of the globe” have enabled more small firms to go global. Yet, while geographic and logistical barriers are rapidly decreasing -- making it easier for entrepreneurs to conduct business globally – tariffs, complexity and an uneven playing field remain obstacles for U.S. firms in many countries. Trade pacts – such as the pending U.S.-Colombia Trade Promotion Agreement (TPA) – are critical initiatives that create better conditions for small firms to do business in specific markets.

Already, trade between the U.S. and Colombia amounted to $18 billion in 2007. The pending trade pact will eliminate tariffs on more than 80 percent of U.S. exports of industrial and consumer goods immediately. Over time, 100 percent of U.S. exports will be duty-free. Duty-free access to a growing market is a god-send to small business owners in search of new markets, particularly against the back-drop of sagging U.S. economic conditions.

So, you might ask, why isn’t Congress moving on the agreement? Probably for the same reason they haven’t moved on many other issues for more than a year and a half -- lack of leadership and the dynamics of the presidential elections. Yes, politics as usual.

The anti-trade rhetoric on the campaign trail has crept into the corridors of Capitol Hill. Democrat leaders are holding up the agreement citing labor, environmental and other concerns with the Colombia pact. However, the Colombia agreement includes almost the same language and provisions as the Peru agreement that passed in December 2007.

The U.S.-Colombia agreement was signed almost 500 days ago. The Colombia legislature approved the agreement first in June 2007, and again in October 2007 with amendments (at the behest of the U.S.) that enhanced labor and environmental provisions. The U.S. Congress has regularly extended duty-free treatment for virtually all Colombia goods and services that enter the United States. So, why not give U.S. businesses that same treatment in pursuit of the Colombia market?

Not only will the U.S.-Colombia PTA present substantial economic opportunities for the U.S., the political stabilization of the country is another key benefit. Impatience has set in with trade supporters, and President Bush is looking to send the agreement to the Hill as early next week. The Congress will then have 90 days to approve or disapprove the agreement.

If political leaders in Washington want to do something meaningful for the economy, and strengthen our standing around the globe, they will move without haste and approve the U.S.-Colombia TPA.