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Gutierrez, Congressional Delegation Visit Latin American Trading Partners

A three-day visit to Colombia, Panama, and Peru allowed participants to see how access to the U.S. market is bringing economic prosperity and solutions to social unrest to those key trading partners.

by Maria Cameron

The hillside neighborhood of Santo Domingo in Medellín, Colombia, was for many years physically cut off from the economic life of the city and the scene of drug-fueled gang wars. But a recent Saturday-morning visit to the barrio by a U.S. delegation led by Secretary of Commerce Carlos M. Gutierrez, in the company of Medellín’s mayor, Sergio Fajardo, and other Colombian officials, was a sign of the remarkable changes that have come about in the past several years in one of the most destitute corners of Latin America.

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On September 15, 2007, during a visit to Medellín, Colombia, Secretary of Commerce Carlos M. Gutierrez (left) met with Mayor Sergio Fajardo (right) to discuss the rejuvenation of Santo Domingo, a once violent and poverty-stricken area of the city. The visit was part of a three-day tour of Latin American countries that have pending FTAs with the United States. (U.S. Department of Commerce photo)
On September 15, 2007, during a visit to Medellín, Colombia, Secretary of Commerce Carlos M. Gutierrez (left) met with Mayor Sergio Fajardo (right) to discuss the rejuvenation of Santo Domingo, a once violent and poverty-stricken area of the city. The visit was part of a three-day tour of Latin American countries that have pending FTAs with the United States. (U.S. Department of Commerce photo)

 

Stepping onto the Metrocable, the new cable car system that links Santo Domingo to Medellín’s city center, the officials traveled for several stops and visited the city’s prestigious new public library, la biblioteca España. At the library, they spent more than an hour speaking with 28 former guerillas who were participating in a city-run program to integrate them into mainstream society. It was evidence, as Mayor Fajardo noted, of an “intervention with social meaning.”

Fours Days, Three-Countries

The Colombia visit was part of a bipartisan congressional delegation to Colombia, Panama, and Peru on September 13–15, 2007. The trip gave participants a chance to ask questions and to raise concerns with these U.S. trading partners about the pending U.S. free trade agreements (FTAs). During the trip, the delegation heard directly from government officials and from representatives of business, labor, and civil society organizations in each country on the critical role the FTAs will play in promoting democracy and positive social change. The delegation also heard from businesses and workers on how the FTAs will create opportunities to fight poverty, to create jobs, and to spur economic growth.

Opportunities in Panama

The first stop, on September 13, was in Panama, where the delegation met with President Martín Torrijos and members of his cabinet to discuss the economic benefits of the FTA for both countries. The delegation learned how the FTA will enhance opportunities for U.S. businesses to compete for the Panama Canal’s $5.25 billion planned expansion. The FTA will put U.S. companies on an equal footing with Panamanian companies in bidding on covered government procurement contracts.

Panama and the United States signed the U.S.–Panama Trade Promotion Agreement on June 28, 2007, and Panama’s National Assembly overwhelmingly voted in favor of it on July 11, 2007. The United States is Panama’s largest trading partner, with bilateral trade reaching nearly $3.1 billion in 2006, an increase of 24 percent over 2005. With 2006 exports to Panama of $2.7 billion and imports of $378 million, the United States continues to maintain a large trade surplus with Panama.

Strong Economic Growth in Peru

On September 14, the delegation traveled to Lima, Peru. The participants met with President Alan García and heard from members of the Peruvian business community, local labor leaders, students, and workers about the economicand employment conditions in Peru and the positive effects they expect to see from the U.S.–Peru Trade Promotion Agreement. The delegation also visited Servicio Nacional de Adiestramiento en Trabajo Industrial (SENATI), a public–private partnership that provides professional education and vocational training to Peru’s poor. In 2006, SENATI served more than 300,000 Peruvians by providing them with skills needed to enter the formal job market.

Peru and the United States signed the U.S.–Peru Trade Promotion Agreement on April 12, 2006, and the Peruvian Congress approved it in June of that year. Peru has one of the strongest economies in the Andean region, with an average growth in gross domestic product of more than 5 percent annually during the past six years. In a region that suffers from frequent instability, Peru has demonstrated a commitment to economic reform and democratic principles.

The United States is Peru’s main trading partner, accounting for 23.3 percent of Peru’s exports and supplying 16.4 percent of the country’s imports in 2006. Bilateral trade has more than doubled during the past decade, from $3 billion in 1996 to $8.8 billion in 2006.

Decreased Civil Strife in Colombia

The highlight of the trip was the stop in Medellín, Colombia, on September 15. Medellín was once South America’s most violent city, but it is now enjoying a renaissance of security and economic growth, which reflects the reforms of President Álvaro Uribe.

During discussions with Uribe, the delegation was provided with an impressive list of examples that show the success his government has achieved in combating narco-terrorism and in reducing the overall level of violence. In 2006, the combination of eradication and interdiction removed 500 metric tons of cocaine from the market, depriving terrorist groups of $850 million in funds to buy arms and to mount attacks.

Between 2002 and 2006, violent crime and terrorism in Colombia dropped by nearly half, and, in what was once the kidnapping capital of the world, abductions have dropped 76 percent over the same period. Colombia’s economic growth has averaged more than 5 percent annually since 2002, and poverty has declined from 60 percent in 2000 to 45 percent in 2006.

Colombia and the United States signed the U.S.–Colombia Trade Promotion Agreement on November 22, 2006, and the Colombian Congress approved it in July 2007. The United States is Colombia’s chief trading partner, accounting for 39.5 percent of Colombia’s exports and supplying 26 percent of the country’s imports in 2006. Bilateral trade has more than doubled during the past decade, from $5 billion per year in the early 1990s to approximately $16 billion in 2006. After Canada and Mexico, Colombia is the largest export market for U.S. farm products in the Western Hemisphere.

Bilateral Trade Equity

The Colombia, Panama, and Peru FTAs will strengthen freedom and democracy in each country by securing the rule of law and by increasing transparency. The agreements will also anchor longstanding U.S. ties with vital regional allies that form the front line of defense against groups that are fighting for a return to the failed, antidemocratic path of the region’s past.

The United States currently allows more than 90 percent of imports from those three countries to enter duty-free under unilateral preferences programs, whereas U.S. exporters face tariffs and other trade barriers. The FTAs will open important markets to U.S. exporters by eliminating tariffs on 80 percent of industrial goods immediately on entry into force and by phasing out the remaining tariffs over time.

The agreements, noted Gutierrez in recent remarks to the National Foreign Trade Council in Washington, D.C., “will level the playing field for U.S. exporters, create better-paying jobs for Americans, and provide new opportunities for American innovators and entrepreneurs.”

Maria Cameron is the desk officer for Panama and Venezuela in the Market Access and Compliance unit of the International Trade Administration.

 

For More information

For more information on how the free trade agreements with Columbia, Panama, and Peru will benefit specific states and industries, visit www.tradeagreements.gov.

 

70 Events in 30 States Highlight Benefits of Trade

In the six weeks from late August to early October 2007, senior Commerce Department officials spoke at 70 events in 30 states to highlight the benefits of open markets and free trade to U.S. businesses and workers.

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The Dredging Supply Company of Reserve, Louisiana, received a visit on September 27, 2007, from Commerce Department and congressional officials. Standing in front of one of the company's portable dredges are (from left to right): Erin Butler Mueller, commercial officer at the U.S. Export Assistance Center in New Orleans, Louisiana; Bob Wetta, vice president of marketing and sales of Dredging Supply Company; Barney D. Arceneaux, district director of the office of Rep. Charlie Melancon; and Walter M. Bastian, deputy assistant secretary of commerce for the Western Hemisphere. (U.S. Department of Commerce photo)
The Dredging Supply Company of Reserve, Louisiana, received a visit on September 27, 2007, from Commerce Department and congressional officials. Standing in front of one of the company’s portable dredges are (from left to right): Erin Butler Mueller, commercial officer at the U.S. Export Assistance Center in New Orleans, Louisiana; Bob Wetta, vice president of marketing and sales of Dredging Supply Company; Barney D. Arceneaux, district director of the office of Rep. Charlie Melancon; and Walter M. Bastian, deputy assistant secretary of commerce for the Western Hemisphere. (U.S. Department of Commerce photo)

 

One such event took place on September 27, in Reserve, Louisiana, when a group of officials met with senior managers of Dredging Supply Company Inc. The company, founded in 1989, designs and manufactures a variety of dredges that are used in river, sand, and lake dredging. It operates out of a 16-acre facility that employees about 100 people, and it is a world leader in the production of portable dredges. In 2003, the company won an Export Achievement Award from the Department of Commerce for its successful sales efforts in Chile. The company recently exported dredging equipment to Dubai and Nigeria. According to company officials, more than 40 percent of its products are exported.

“Dredging Supply Company’s vigorous growth over the past decade, partially fueled by its successful expansion into international sales, is an example of the vital role that exports play in the U.S. economy,” remarked Walter M. Bastian, deputy assistant secretary of commerce for the Western Hemisphere, after the visit. “Free trade agreements, like those currently pending with Peru, Colombia, Panama, and South Korea, will help lower barriers to sales in large and growing international markets for American businesses.”