I will reserve most comment on the Honduras debacle until I read up on the constitutional issues involved. However, there is another Latin American issue that deserves attention: the pending free trade pact with Colombia. In recent years, Colombia has made significant political and economic reforms. These have been so successful that the country qualified for the IMF’s newest lending facility, the Flexible Credit Line (FCL), which has stringent qualification criteria. Colombia is not perfect–labor and narcotics issues persist–but the Andean country has made the types of the reforms that the US typically encourages countries to make. Colombia is a model of Latin American economic and political liberalization.
However, the return of Democrats to Congressional majority in 2006 and the Democratic primaries in 2008 brought a resurgence of protectionist sentiment, and ratification of the trade pact has been on hold since its signing in 2006. Other trade pacts have moved faster; Colombia has been slow in part because US unions have weighed in. Additionally, protectionist sentiment was a sure vote winner in the Democratic primaries. These forces have hijacked American trade policy, and economic policy is foreign policy. The administration is now dragging out negotiations.
Colombian exports can already enter the US relatively unrestricted, but US exports to Colombia stand to see up to 80% declines in barriers if the pact is ratified. The Colombians gain little economically from the pact, but their interest is primarily strategic. Populism and American resentment dominate Latin American geopolitics, and the Colombian government needs to show its people that reforms will be rewarded by US institutional support. For the US, in addition to economic gains to the export sector, the pact is a geostrategic necessity. US attempts to encourage reform in emerging markets serve US interests, but incentives for reform decline when the US turns its back on those who follow its counsel. US interests in Latin America are constantly at risk to governments with no regard for the rule of law; those who buck the trend should be rewarded at least by token US recognition. In Latin America, the US needs all the allies it can get.
Denying the pact for domestic political reasons–largely due to a president’s campaign committments-–sends bad signals to would-be US allies in Latin America. Complaints about labor treatment are almost comical given other US trade ties; in the end, this has been a domestic political issue entirely, much like the US-Canada relationship was strained by Obama’s now-abandoned NAFTA rhetoric. Whatever the politics, President Obama now has an obligation to US interests and allies to swiftly address this strategic misstep.
The sad thing about it is that looking back on history when was isolationism and protectionism ever successful. I cannot think of any examples from the past that yielded good results.
[...] trade ties with Bogota due to Obama’s campaign promises and protectionist sentiment in Congress. My concerns about the geostrategic implications of the trade agreement have been validated by Chavez’s latest [...]