Andean Free Trade Agreement

– the search for rules of origin, procedures for enforcing these rules and provisions to deal with circumvention issues which ensure that, under a free trade agreement with Andean countries, preferential tariffs apply only to products that can benefit from such treatment without creating unnecessary barriers to trade. However, within the Andean countries, the base is largely opposed to free trade with the United States. Opponents argue that any economic benefit of enhanced trade under a free trade agreement is achieved by only a small segment of the economy, which exacerbates class separation. They also claim that a large part of the Andean population is a poor peasant, who is particularly vulnerable and cannot compete with the increase in agricultural imports from the United States, which some Andean officials say are heavily subsidized. The Alternative Policy Development Group notes that one of the few remaining mechanisms to protect family farmers in the Andean region is the Andean Community `price band` system, which it says has helped to mitigate the vagaries of raw material prices at the international level. (17) Another argument is that a free trade agreement would result in lower revenues for Andean governments, and some opponents argue that revenue losses must be replaced by regressive national taxes. (18) On 13 April 2005, the Committee on International Relations of the House of Representatives, a subcommittee of the Western Hemisphere, held a hearing on us-U.S. trade agreements with Latin America. At the hearing, John Murphy, Vice President for Western Hemisphere Affairs of the U.S. Chamber of Commerce, said that the situation was difficult with regard to investment disputes with Peru and Ecuador and that persistent disputes “…… constitute a major obstacle that could block the participation of these countries [in a free trade agreement].┬áThese disputes were discussed during the negotiations. Since the beginning of 2005, progress has been made in resolving disputes with U.S.

companies. On December 7, 2005, U.S. Trade Representative Rob Portman and Foreign Trade and Tourism Minister Alfredo Ferrero Diez Canesco announced a successful conclusion to negotiations on the U.S.-Peru Free Trade Agreement. The agreement would eliminate tariffs and other barriers to goods and services. (14) Ambassador Portman said: “An agreement with Peru is an important part of our strategy to promote free trade in our hemisphere, which we want to introduce later to other Andean countries, including Colombia and Ecuador.” (15) Subsequently, Colombia and Ecuador announced their desire to complete their negotiations. During a meeting with President George W. Bush in Washington on April 28, 2003, Colombian President Alvaro Uribe sought a free trade agreement with the United States to improve colombia`s economy, create jobs and provide an attractive alternative to drug activity in his country. However, President Bush was reluctant to accept free trade negotiations because he wanted to achieve broader market opening through the U.S.

Hemispheric Free Trade Agreement (FTA). (1) Given that the FTAA talks appeared to have stalled, President Bush reportedly offered to send the United States to the meeting. Trade Representative (USTR) Robert Zoellick in Colombia to discuss bilateral trade between the two countries.