Sunday, June 4, 2023

Colombia-US FTA: An agreement that drives workers out of the country

The free trade agreement (FTA) between Colombia and the United States has been a subject of debate since it came into force in 2012. While its supporters argued that the accord would lead to economic development, those who opposed it from its inception argued that the negative impact on Colombia’s economy would be obvious. Today, 11 years after its implementation, the figures prove the latter to be true.

First, one of the most significant negative effects of FTAs ​​is the destruction of the economy and national output. The agreement opened the floodgates of American products at very low prices, making domestic products less competitive. As a result, many domestic companies were forced to close, leading to a decline in production and sources of employment, increased dependence on imports, and increased unemployment.

According to the Center for Studies for Labor and Agrarian Development (CEDLA), between 2012 and 2019, 1.5 million jobs were lost in the manufacturing industry due to the implementation of FTAs, while about 83,000 jobs were lost in the mining-energy sector1. In addition to the manufacturing industry, other productive sectors were also affected by the FTA between Colombia and the United States; According to a report by the General Confederation of Labor (CGT), between 2012 and 2019, more than 400,000 jobs were lost in the agricultural sector due to unfair competition from imported products from the United States.

Secondly, and as a result of the reduction in production, Colombia is losing one of its most valuable assets: its workers. Since the entry into force of the FTA between Colombia and the United States in 2012, there has been a significant increase in the number of Colombian men and women immigrating to other countries. In 2012, a total of 122,727 Colombians left the country, while in 2020 the number increased to 250,947, representing an increase of 104.6%. Unemployment increased as a result of the Colombia-US FTA. This has led many Colombians to seek job opportunities in other countries, where they hope to find better working conditions and more economic stability.

The exodus of skilled and talented workers is nothing more than brain drain and in turn is eroding the country’s ability to compete in the global market. After 11 years of FTA with the United States, it can be shown that this treaty is one of the main explanations for the continued increase in emigration of Colombians to other countries. As is the FTA between Colombia and the United States, an agreement that has been continuously expelling workers from the country. And without workers there is neither progress nor production.

As migration increases, remittances also increase, a fact that has remained constant over the past decade. Remittances are an important factor in the Colombian economy today and have grown significantly since the FTA came into force. According to Revista Dinero, in 2012, remittances sent by Colombian workers abroad amounted to about $4,000 million, while in 2022 this number is expected to increase to more than $9,500 million. These remittances have been an important source of income for many Colombian families and have helped offset the economic losses caused by NAFTA. However, they have also been a sign of brain drain and the Colombian economy’s dependence on labor from abroad. It cannot be positive for a country that about 10% of its population is outside the country and at the same time this population contributes income which is 2.66% of GDP today: Losing and expelling workers in return is a good The business is not there to receive remittances.

Finally, after 11 years of implementation of the FTA between Colombia and the United States, the negative effects on the Colombian economy are evident: destruction of the economy and national production, loss of sources of employment, increase in unemployment, expulsion of workers from the country and Losses of economic sovereignty are some of the most significant effects of the agreement. While it is important that the Colombian government of Gustavo Petro renegotiates the FTA, the facts show that Colombia has won nothing and is losing everything, including its people.

1.”Assessing the Implementation of the Colombia-United States Free Trade Agreement (FTA), Center for Labor and Agriculture Development Studies (CEDLA), August 2020.

2 General Confederation of Labor (CGT). (2021). FTA Colombia–United States: A decade of negative impacts on Colombian agriculture. Retrieved from CGT Colombia.

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