The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

Colombia’s dashed expectations

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Small-scale farmers are the clear losers in the first year of the US-Colombia Free Trade Agreement.

Stephanie Burgos is a senior policy advisor at Oxfam America.

Politicians like to promote free trade agreements (FTAs) as a ‘win-win’ for all countries involved. Earlier this week, President Obama met with Colombia’s President Santos and touted the success of the US-Colombia FTA at the White House, affirming a 20 percent increase in trade between the two countries.

Yet President Obama’s statement masks the reality of the trade deal in Colombia, as revealed by a new Oxfam study looking at the effects of the trade agreement during its first year in force, especially on agricultural products important to Colombia’s small-farm economy. President Santos, however, avoided any mention of the FTA in his public comments at the White House. That’s not surprising in light of recent protests by Colombian farmers who say free trade agreements are driving them into bankruptcy.

 Small-scale farmers are responsible for a significant portion of Colombia’s agricultural production and constitute 12 percent of households in the country. Photo by Oxfam staff in Colombia.
Small-scale farmers are responsible for a significant portion of Colombia’s agricultural production and constitute 12 percent of households in the country. Photo by Oxfam staff in Colombia.

It turns out that during the first nine months of the trade agreement, US exports to Colombia grew at a much greater rate than Colombia’s exports to the US, leading to a 40 percent drop in Colombia’s balance of trade with the US. Colombia’s trade deficit with the US in processed foods deteriorated dramatically, and the country also fared poorly with regard to agricultural commodities, as its exports to the US declined while its imports from the US increased.

It’s clear that Colombians should be concerned about this situation, but why should we in the US care? And shouldn’t Colombians be happy to get cheap US rice and snacks?

In Colombia, as in most developing countries, many consumers are also agricultural producers. And many of the poorest depend on agriculture for their livelihoods. So when US agricultural and processed food exports increase, including products subsidized by Uncle Sam, prices go down leaving small-scale producers in Colombia simply unable to complete.

Before its entry into force, Oxfam had warned the trade deal would undermine smallholder agriculture in Colombia. Small-scale farmers are responsible for a significant portion of Colombia’s agricultural production and constitute 12 percent of households in the country. Over half the rural population lives in poverty, the kind of poverty and inequality that helped trigger the ongoing internal armed conflict that has become the longest-running such conflict in Latin America.

Undermining Colombia’s small-scale producers is counter to US interests. The US has invested a lot in Colombia—more than eight billion dollars in US aid has gone to the country since 2000 to eradicate the illicit drug trade, promote alternative agricultural development and bolster the government’s war effort. With peace talks now underway, comprehensive rural reform is the first item on the agenda of negotiations between the Colombian government and the FARC.

Yet the evidence now shows that several of the agricultural products most important to Colombia’s small-scale farmers—dairy, rice, white corn, and pork—are at greatest risk of being undermined by imports from the US in the first year under the agreement. Other products such as wheat and chicken are also at risk.

It’s no wonder that, in the context of the US negotiations with 11 countries for the Trans-Pacific Partnership (TPP), assurances about the benefits of trade for all are being met with increasing skepticism and protest by a range of stakeholders.

With all trade agreements, the devil is in the details. And because negotiations take place in secret, it’s impossible to know what the real impact of the TPP might be—though we got a glimpse of the extent of the looming travesty for public health when a recent draft of the TPP intellectual property chapter was leaked.

So it’s helpful to shine a light on the actual impact of a trade agreement once it has been put into effect.

For Colombians, the picture is not as rosy as we are led to believe. The first year of the US-Colombia FTA should be no cause for US celebration over the alleged benefits of trade. Rather, it should come as a warning to those looking at the ongoing negotiations over the TPP. Importantly, it should also provide a kick in the butt to the Colombian government to monitor the adverse impacts of the agreement on small-scale producers and swiftly enact policies to counter them.

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