May, 01 2009, 01:19pm EDT
For Immediate Release
Contact:
Phone: (202) 223-4975,Email:,coha@coha.org
Canada-Colombia Free Trade Agreement Could Be a Lose-Lose Deal
* The Canadian Parliament is on the verge of passing a free trade measure with Colombia * The trade deal faces staunch opposition from human and labor rights bodies
WASHINGTON
Just a few hours prior to meeting his counterparts from all over the Western Hemisphere at the recently concluded Summit of the Americas, Canadian Prime Minister Stephen Harper reaffirmed Canada's newfound commitment to the region, most clearly reflected in the newly signed free-trade deals with Peru and Colombia. On March 26, the Canadian government submitted legislation to the House of Commons that would implement the Canada-Colombia Free Trade, Labor Cooperation and Environment Agreements.
The Arrangements
In 2007, officials from both countries began secret talks to achieve a Canada-Colombia Free Trade Agreement (CCFTA). Less than a year later, the deal was underway. Essentially, the CCFTA is a carbon copy of the North American Free Trade Agreement (NAFTA). Consequently, in addition to the trade agreement itself, the accord consists of two additional side agreements, one addressing the environment and the other focusing on labor, which are legally separate from the main text and where both have to be ratified individually by the parliament.
Although Canadian products face much higher tariffs in Colombia than Colombian products do in Canada, both countries have agreed to lower tariffs on imported goods and also to eliminate non-tariff trade barriers as much as possible. Canadian products entering Colombia such as wheat, barley, pork and beef presently face considerable tariffs ranging from 15 percent on cereals to as much as 80 percent on beef. Canada, however, imposes no tariffs on about 80 percent of the Colombian products entering the country including coal, bananas, coffee, palm oil and sugar. Other products which are not duty-free such as cut flowers face moderate tariffs, from 8 to 16 percent. In 2008, Canadian exports to Colombia totaled $703.8 million whereas merchandise imported from Colombia amounted to $643.7 million, representing a meager 0.13 percent of Canada's total trade.
Far From Unanimous Support
Concerns surrounding human rights are at the center of the controversy surrounding the pending Canada-Colombia agreement. Proponents of the deal, including the Harper government, argue that Colombia is not what it used to be during the 1980s. To a certain degree, it is true that under the presidency of Alvaro Uribe, the Colombian human rights situation has improved in certain respects. In 2001, the year before Uribe was elected, 168 union members were murdered in the country. As of 2008, the number declined to 49 victims. Some of this discrepancy is due to a reclassification of who is a labor leader in Colombia, which is something of legerdemain by Uribe officials rather than the real thing. To promote the FTA with Colombia, Canadian officials repeated a vague and mainly theoretical discourse, maintaining that the CCFTA could improve human rights in Colombia by creating more jobs, consequently diminishing poverty and inequality. In theory, a stronger democracy would be established because the CCFTA would give Canada significant leverage on Colombia, if it was ever prepared to exercise it. This would allow Canada to press for improvements and to encourage the Uribe government to respect its international commitment to protecting human rights.
In spite of these potentially positive outcomes of the FTA, many Colombian and international human rights organizations affirm that human rights violations in Colombia remain a significant problem. In a communique dispatched to the Canadian parliament, the Canadian Council for International Co-operation (CCIC) claimed to be "very disappointed to see the government moving ahead with an agreement with Bogota. It fails to reflect such basic Canadian values as respect for human rights, economic justice and protection of the environment."
Colombia holds the record for the second highest rate of internally displaced people in the world, only after Sudan. The situation in the country is considered to be one of the worst human rights crises in the hemisphere by independent international bodies such as the United Nations and the Organization of American States. Labor rights activists and union workers particularly bear the brunt of these abuses. On average, throughout the past 21 years, there has been one Colombian trade union worker assassinated every three days. Adding to these statistics, and perhaps most indicative of the severity of the situation in Colombia, the Uribe government is suspected of acting in collusion with right-wing paramilitaries. "We have no doubts, given the evidence received, that the Colombian government of Alvaro Uribe and the security forces are accomplices in human rights abuses," reported a communique written by a delegation of British Labour Party members of parliament as well as trade union leaders from the U.S., Canada and Britain.
In an open letter to the Canadian International Trade Minister, Stockwell Day, Amnesty International reiterated these persistent concerns over the violation of human rights in Colombia. "It is clear that serious human rights abuses -including death threats and assassinations- are continuing to take place in areas of economic interests." According to Amnesty International, many union-affiliated victims have been targeted then attacked. They have been subject to coercion in efforts to purge the areas of the local population in order to gain access to land that may possess strategic resources such as oil, mineral and agro-industrial sites. Trade union members in particular have fallen victim to intimidation and brutal attacks in order to discourage them from organizing to protect themselves and their labor rights.
An Ineffective Labor Side Agreement
Theoretically, labor side agreements are directed towards improving labor rights and enforcing labor standards among the signatory members of a free trade agreement. While the CCFTA was secretly being negotiated, many hoped for a labor agreement that would have a credible dispute settlement mechanism, similar to the one of the World Trade Organization (WTO), which would allow such trade sanctions as countervailing measures or abrogation of preferential trade status. These measures could then be implemented in order to coerce the signatory countries to respect their pledges regarding their compliance with labor rights standards.
However, the labor side agreement that was eventually signed only provided for the two signatory countries to enforce their own labor regulations, in accordance with provisions of the International Labor Organization (ILO). The agreement unfortunately focuses on the enforcement of existing statutes rather than speculating over raising labor standards in the future. Moreover, if one of the countries fails to respect the current standards, the only sanctions applicable are fines, never to exceed $15 million per year. Critics say that the labor side agreement is highly apathetic towards the malevolent conditions being faced on a daily basis by trade union workers who routinely face the possibility of being assassinated by right-wing interest groups motivated by greed. They argue that these side agreement measures in fact do nothing to protect the victims. "The FTA's human rights penalty works on an economy of scale: the more the Colombian government and its paramilitary allies violate the rights of unionists, the cheaper it is for them," says Canadian author Todd Gordon, in his article "Disaster in the Making: Canada Concludes Its Free Trade Agreement With Colombia." Violations against labor rights in Colombia are endemic, and the Uribe administration, because of the minimal progress it has made to protect Colombian trade unionists, seems unable, or at least unwilling, to effectively tackle the situation. Issuing fines against the delinquent government is clearly an insufficient remedy for an issue that is too important to be considered in terms of dollars and cents. The fact is that fines fail to address the root causes of human rights violations and do not offer a compelling incentive for Bogota to seriously address the problem.
Secret Negotiations
Many condemn Ottawa for the secrecy that surrounded the negotiations of the FTA. There were no public hearings held during the negotiations. Moreover, the agreement was only made public after it was signed by the two parties. The Canadian House of Commons' Standing Committee on International Trade was asked to produce a report on the deal. In that document, "Human Rights, the Environment and Free Trade with Colombia," the Committee came forth with eight major recommendations, in which critical components of the document called for Canada to "maintain close ties with Colombia without signing a free trade agreement until there is confirmation that the improvements noted are maintained, including continued improvement as regards displacement, labor law and accountability for crime, and until the Colombian government shows a more constructive attitude to human rights groups in the country." Nevertheless, none of the Committee's recommendations were considered. Instead, the agreement had been rushed and signed just days prior to the release of the report, which outlined key points for the resolution of an FTA between both countries. Canada gambled on a losing strategy: that free trade will inherently bring democracy to what some would consider a lawless society. Ottawa should only have looked to its neighbor in Washington to see the futility of this approach.
Who Benefits From the CCFTA?
Colombia is not a major trade partner of Canada, representing only a tiny percentage (0.13 percent) of overall Canadian trade. Given this fact, an FTA between Colombia and Canada almost seems unnecessary. However, it is worth remembering the potential created by the CCFTA for Canadian businesses when it comes to foreign direct investment (FDI) in Colombia. In recent years, Canadian direct investment in Colombia has more than doubled, reaching a figure of $739 million. Also, this trend is expected to grow because of the vast investment opportunities offered by Colombia, especially in the oil and gas exploration sector as well as in mining. In November 2008, after initialing the FTA with Canada, President Alvaro Uribe expressed his desire for the accord to help spur oil, gas and mining exploration across half of Colombia's territory. The CCFTA will provide Canadian entrepreneurs in Colombia with substantial new investment rights and increased security for Canadian companies thinking about investing in the country. Unfortunately, human rights traditionally do not receive such protections.
There already are more than 20 Canadian companies operating in the oil and gas sector in Colombia. Yet, it is in these very industries that most of the abuses of labor rights are perpetrated, including 40 percent of the murders of union leaders and workers. What is even more disconcerting is that Canadian oil and mining companies are investing in some of the most conflict-ridden zones of the country. According to several human rights associations, there is a clear correlation between extracting natural resources and the presence of human rights abuses. In fact, the regions that are richest in minerals and oil are also often the most plagued by violence. According to a report of the Canadian House of Commons' Standing Committee on International Trade, these regions are "the source of 87 percent of forced displacements, 82 percent of violations of human rights and international humanitarian law, and 83 percent of assassinations of trade union leaders in the country." To some degree, investing in such areas ineluctably would make Canada complicit in Colombia's endemic human rights problems.
Trying to Attract Investors
Some observers also contend that Colombia does not in fact benefit under the terms of the proposed FTA. Since the tariffs and trade barriers are already very low in Canada on Colombian products, the latter country will reap relatively small benefits from the trade agreement. However, for Colombia, the advantages lie mainly in the gains in FDI, in the hope that this will create much needed employment. But it is difficult to convince investors to place new capital investment in Colombia because of the high level of political risk confronting such projects. In Colombia's perspective, the FTA with Canada could help change this perception and send a signal to investors from other countries, providing assurance that investing in Colombia is not hazardous and even could provide worthy business opportunities. However, in the current economic context, it is highly doubtful that such a plan would function appropriately. With investors seeing their net worth melting away, businesses are more likely to look for FDI opportunities in more politically stable and economically viable countries. Additionally, signing a deal with Canada would be a way for Colombia to put pressure on the U.S., which has not yet ratified the FTA with Colombia. The deal now has been put on ice by U.S. Congress, over concerns about the human rights situation in the country. But once the deal with Canada is implemented, Bogota hopes that the United States will want to go ahead with its own bilateral trade agreement, in spite of the reluctance expressed in Washington, so not to be left behind and lose business opportunities in Colombia, in Canada's favor.
Canadian Multilateralism Left Behind
Many critics point to the fact that Canada, which has always been a proud defender of multilateralism and the WTO, should not be engaging in increased bilateral trade agreements with Latin American countries. Multilateralism diminishes asymmetry between trade partners and levels the playing field, something that has always been a priority for Canada. Since NAFTA was implemented in 1994, only three bilateral FTAs have been enacted by Canada; with Costa Rica, Chile and Israel. However, since Stephen Harper's Conservative Party was elected in 2006, Canada signed an FTA with Peru and Colombia and is negotiating no less than eight other bilateral trade pacts. If Canada is truly interested in Latin America, it might want to adhere to its "Americas Strategy," which promotes building "strong, sustainable economies through increased trade and investment linkages, as well as mutual commitment to expanding opportunity to all citizens." In order to achieve these goals, Canada should work multilaterally with other countries of the hemisphere. Multiplying bilateral trade agreements is just one way to promote Canada's advantage, without effectively taking into account the benefits in store for Latin America, while at the same time undermining efforts to achieve efficient multilateral trade organizations embracing the entire hemisphere. In a region with some of the highest indicators of inequality, bilateral deals favor different treatment with various countries, a pathway contrary to the WTO's goals. Some inevitably lose in this process and, more often than not, the poorer country in the bilateral agreement is disadvantaged.
Almost all parties would agree that Canada should actively engage with Colombia to help the country continue to improve its record on human rights and to help build the institutional capacity which, in turn, can be counted on to contribute to hemispheric peace and stability. But Canada has to make certain that a trade agreement is not warranted by the current situation in Colombia. Some standards must be set before the CCFTA is implemented because the existing code is a far cry from being up to the job.
This analysis was prepared by COHA Research Associate Mylene Bruneau
May 1st, 2009
Founded in 1975, the Council on Hemispheric Affairs (COHA), a nonprofit, tax-exempt independent research and information organization, was established to promote the common interests of the hemisphere, raise the visibility of regional affairs and increase the importance of the inter-American relationship, as well as encourage the formulation of rational and constructive U.S. policies towards Latin America.
LATEST NEWS
Critics Blast 'Reckless and Impossible' Bid to Start Operating Mountain Valley Pipeline
"The time to build more dirty and dangerous pipelines is over," said one environmental campaigner.
Apr 23, 2024
Environmental defenders on Tuesday ripped the company behind the Mountain Valley Pipeline for asking the federal government—on Earth Day—for permission to start sending methane gas through the 303-mile conduit despite a worsening climate emergency caused largely by burning fossil fuels.
Mountain Valley Pipeline LLC sent a letter Monday to Federal Energy Regulatory Commission (FERC) Acting Secretary Debbie-Anne Reese seeking final permission to begin operation on the MVP next month, even while acknowledging that much of the Virginia portion of the pipeline route remains unfinished and developers have yet to fully comply with safety requirements.
"In a manner typical of its ongoing disrespect for the environment, Mountain Valley Pipeline marked Earth Day by asking FERC for authorization to place its dangerous, unnecessary pipeline into service in late May," said Jessica Sims, the Virginia field coordinator for Appalachian Voices.
"MVP brazenly asks for this authorization while simultaneously notifying FERC that the company has completed less than two-thirds of the project to final restoration and with the mere promise that it will notify the commission when it fully complies with the requirements of a consent decree it entered into with the Pipeline and Hazardous Materials Safety Administration last fall," she continued.
"Requesting an in-service decision by May 23 leaves the company very little time to implement the safety measures required by its agreement with PHMSA," Sims added. "There is no rush, other than to satisfy MVP's capacity customers' contracts—a situation of the company's own making. We remain deeply concerned about the construction methods and the safety of communities along the route of MVP."
Russell Chisholm, co-director of the Protect Our Water, Heritage, Rights (POWHR) Coalition—which called MVP's request "reckless and impossible"—said in a statement that "we are watching our worst nightmare unfold in real-time: The reckless MVP is barreling towards completion."
"During construction, MVP has contaminated our water sources, destroyed our streams, and split the earth beneath our homes. Now they want to run methane gas through their degraded pipes and shoddy work," Chisholm added. "The MVP is a glaring human rights violation that is indicative of the widespread failures of our government to act on the climate crisis in service of the fossil fuel industry."
POWHR and activists representing frontline communities affected by the pipeline are set to take part in a May 8 demonstration outside project financier Bank of America's headquarters in Charlotte, North Carolina.
Appalachian Voices noted that MVP's request comes days before pipeline developer Equitrans Midstream is set to release its 2024 first-quarter earnings information on April 30.
MVP is set to traverse much of Virginia and West Virginia, with the Southgate extension running into North Carolina. Outgoing U.S. Sen. Joe Manchin (D-W.Va.) and other pipeline proponents fought to include expedited construction of the project in the debt ceiling deal negotiated between President Joe Biden and congressional Republicans last year.
On Monday, climate and environmental defenders also petitioned the U.S. Court of Appeals for the D.C. Circuit, challenging FERC's approval of the MVP's planned Southgate extension, contending that the project is so different from original plans that the government's previous assent is now irrelevant.
"Federal, state, and local elected officials have spoken out against this unneeded proposal to ship more methane gas into North Carolina," said Sierra Club senior field organizer Caroline Hansley. "The time to build more dirty and dangerous pipelines is over. After MVP Southgate requested a time extension for a project that it no longer plans to construct, it should be sent back to the drawing board for this newly proposed project."
David Sligh, conservation director at Wild Virginia, said: "Approving the Southgate project is irresponsible. This project will pose the same kinds of threats of damage to the environment and the people along its path as we have seen caused by the Mountain Valley Pipeline during the last six years."
"FERC has again failed to protect the public interest, instead favoring a profit-making corporation," Sligh added.
Others renewed warnings about the dangers MVP poses to wildlife.
"The endangered bats, fish, mussels, and plants in this boondoggle's path of destruction deserve to be protected from killing and habitat destruction by a project that never received proper approvals in the first place," Center for Biological Diversity attorney Perrin de Jong said. "Our organization will continue fighting this terrible idea to the bitter end."
Keep ReadingShow Less
'Seismic Win for Workers': FTC Bans Noncompete Clauses
Advocates praised the FTC "for taking a strong stance against this egregious use of corporate power, thereby empowering workers to switch jobs and launch new ventures, and unlocking billions of dollars in worker earnings."
Apr 23, 2024
U.S. workers' rights advocates and groups celebrated on Tuesday after the Federal Trade Commission voted 3-2 along party lines to approve a ban on most noncompete clauses, which Democratic FTC Chair Lina Khansaid "keep wages low, suppress new ideas, and rob the American economy of dynamism."
"The FTC's final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market," Khan added, pointing to the commission's estimates that the policy could mean another $524 for the average worker, over 8,500 new startups, and 17,000 to 29,000 more patents each year.
As Economic Policy Institute (EPI) president Heidi Shierholz explained, "Noncompete agreements are employment provisions that ban workers at one company from working for, or starting, a competing business within a certain period of time after leaving a job."
"These agreements are ubiquitous," she noted, applauding the ban. "EPI research finds that more than 1 out of every 4 private-sector workers—including low-wage workers—are required to enter noncompete agreements as a condition of employment."
The U.S. Chamber of Commerce has suggested it plans to file a lawsuit that, as The American Prospectdetailed, "could more broadly threaten the rulemaking authority the FTC cited when proposing to ban noncompetes."
Already, the tax services and software provider Ryan has filed a legal challenge in federal court in Texas, arguing that the FTC is unconstitutionally structured.
Still, the Democratic commissioners' vote was still heralded as a "seismic win for workers." Echoing Khan's critiques of such noncompetes, Public Citizen executive vice president Lisa Gilbert declared that such clauses "inflict devastating harms on tens of millions of workers across the economy."
"The pervasive use of noncompete clauses limits worker mobility, drives down wages, keeps Americans from pursuing entrepreneurial dreams and creating new businesses, causes more concentrated markets, and keeps workers stuck in unsafe or hostile workplaces," she said. "Noncompete clauses are both an unfair method of competition and aggressively harmful to regular people. The FTC was right to tackle this issue and to finalize this strong rule."
Morgan Harper, director of policy and advocacy at the American Economic Liberties Project, praised the FTC for "listening to the comments of thousands of entrepreneurs and workers of all income levels across industries" and finalizing a rule that "is a clear-cut win."
Demand Progress' Emily Peterson-Cassin similarly commended the commission "for taking a strong stance against this egregious use of corporate power, thereby empowering workers to switch jobs and launch new ventures, and unlocking billions of dollars in worker earnings."
While such agreements are common across various industries, Teófilo Reyes, chief of staff at the Restaurant Opportunities Centers United, said that "many restaurant workers have been stuck at their job, earning as low as $2.13 per hour, because of the noncompete clause that they agreed to have in their contract."
"They didn't know that it would affect their wages and livelihood," Reyes stressed. "Most workers cannot negotiate their way out of a noncompete clause because noncompetes are buried in the fine print of employment contracts. A full third of noncompete clauses are presented after a worker has accepted a job."
Student Borrower Protection Center (SBPC) executive director Mike Pierce pointed out that the FTC on Tuesday "recognized the harmful role debt plays in the workplace, including the growing use of training repayment agreement provisions, or TRAPs, and took action to outlaw TRAPs and all other employer-driven debt that serve the same functions as noncompete agreements."
Sandeep Vaheesan, legal director at Open Markets Institute, highlighted that the addition came after his group, SBPC, and others submitted comments on the "significant gap" in the commission's initial January 2023 proposal, and also welcomed that "the final rule prohibits both conventional noncompete clauses and newfangled versions like TRAPs."
Jonathan Harris, a Loyola Marymount University law professor and SBPC senior fellow, said that "by also banning functional noncompetes, the rule stays one step ahead of employers who use 'stay-or-pay' contracts as workarounds to existing restrictions on traditional noncompetes. The FTC has decided to try to avoid a game of whack-a-mole with employers and their creative attorneys, which worker advocates will applaud."
Among those applauding was Jean Ross, president of National Nurses United, who said that "the new FTC rule will limit the ability of employers to use debt to lock nurses into unsafe jobs and will protect their role as patient advocates."
Angela Huffman, president of Farm Action, also cheered the effort to stop corporations from holding employees "hostage," saying that "this rule is a critical step for protecting our nation's workers and making labor markets fairer and more competitive."
Keep ReadingShow Less
'Discriminatory' North Carolina Law Criminalizing Felon Voting Struck Down
One plaintiffs' attorney said the ruling "makes our democracy better and ensures that North Carolina is not able to unjustly criminalize innocent individuals with felony convictions who are valued members of our society."
Apr 23, 2024
Democracy defenders on Tuesday hailed a ruling from a U.S. federal judge striking down a 19th-century North Carolina law criminalizing people who vote while on parole, probation, or post-release supervision due to a felony conviction.
In Monday's decision, U.S. District Judge Loretta C. Biggs—an appointee of former Democratic President Barack Obama—sided with the North Carolina A. Philip Randolph Institute and Action NC, who argued that the 1877 law discriminated against Black people.
"The challenged statute was enacted with discriminatory intent, has not been cleansed of its discriminatory taint, and continues to disproportionately impact Black voters," Biggs wrote in her 25-page ruling.
Therefore, according to the judge, the 1877 law violates the U.S. Constitution's equal protection clause.
"We are ecstatic that the court found in our favor and struck down this racially discriminatory law that has been arbitrarily enforced over time," Action NC executive director Pat McCoy said in a statement. "We will now be able to help more people become civically engaged without fear of prosecution for innocent mistakes. Democracy truly won today!"
Voting rights tracker Democracy Docket noted that Monday's ruling "does not have any bearing on North Carolina's strict felony disenfranchisement law, which denies the right to vote for those with felony convictions who remain on probation, parole, or a suspended sentence—often leaving individuals without voting rights for many years after release from incarceration."
However, Mitchell Brown, an attorney for one of the plaintiffs, said that "Judge Biggs' decision will help ensure that voters who mistakenly think they are eligible to cast a ballot will not be criminalized for simply trying to reengage in the political process and perform their civic duty."
"It also makes our democracy better and ensures that North Carolina is not able to unjustly criminalize innocent individuals with felony convictions who are valued members of our society, specifically Black voters who were the target of this law," Brown added.
North Carolina officials have not said whether they will appeal Biggs' ruling. The state Department of Justice said it was reviewing the decision.
According to Forward Justice—a nonpartisan law, policy, and strategy center dedicated to advancing racial, social, and economic justice in the U.S. South, "Although Black people constitute 21% of the voting-age population in North Carolina, they represent 42% of the people disenfranchised while on probation, parole, or post-release supervision."
The group notes that in 44 North Carolina counties, "the disenfranchisement rate for Black people is more than three times the rate of the white population."
"Judge Biggs' decision will help ensure that voters who mistakenly think they are eligible to cast a ballot will not be criminalized for simply trying to re-engage in the political process and perform their civic duty."
In what one civil rights leader called "the largest expansion of voting rights in this state since the 1965 Voting Rights Act," a three-judge state court panel voted 2-1 in 2021 to restore voting rights to approximately 55,000 formerly incarcerated felons. The decision made North Carolina the only Southern state to automatically restore former felons' voting rights.
Republican state legislators appealed that ruling to the North Carolina Court of Appeals, which in 2022 granted their request for a stay—but only temporarily, as the court allowed a previous injunction against any felony disenfranchisement based on fees or fines to stand.
However, last April the North Carolina Supreme Court reversed the three-judge panel decision, stripping voting rights from thousands of North Carolinians previously convicted of felonies. Dissenting Justice Anita Earls opined that "the majority's decision in this case will one day be repudiated on two grounds."
"First, because it seeks to justify the denial of a basic human right to citizens and thereby perpetuates a vestige of slavery, and second, because the majority violates a basic tenant of appellate review by ignoring the facts as found by the trial court and substituting its own," she wrote.
As similar battles play out in other states, Democratic U.S. lawmakers led by Rep. Ayanna Pressley of Massachusetts and Sen. Peter Welch of Vermont in December introduced legislation to end former felon disenfranchisement in federal elections and guarantee incarcerated people the right to vote.
Currently, only Maine, Vermont, and the District of Columbia allow all incarcerated people to vote behind bars.
Keep ReadingShow Less
Most Popular