[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
                   THE COLOMBIA AND PANAMA FREE TRADE
                   AGREEMENTS: NATIONAL SECURITY AND
                       FOREIGN POLICY PRIORITIES

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         THE WESTERN HEMISPHERE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 17, 2011

                               __________

                           Serial No. 112-17

                               __________

        Printed for the use of the Committee on Foreign Affairs


 Available via the World Wide Web: http://www.foreignaffairs.house.gov/

                                 ______



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                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California          BRAD SHERMAN, California
STEVE CHABOT, Ohio                   ELIOT L. ENGEL, New York
RON PAUL, Texas                      GREGORY W. MEEKS, New York
MIKE PENCE, Indiana                  RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina           ALBIO SIRES, New Jersey
CONNIE MACK, Florida                 GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas             DENNIS CARDOZA, California
TED POE, Texas                       BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida            BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida                FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania             KAREN BASS, California
TIM GRIFFIN, Arkansas                WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
VACANT
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
                                 ------                                

                 Subcommittee on the Western Hemisphere

                     CONNIE MACK, Florida, Chairman
MICHAEL T. McCAUL, Texas             ELIOT L. ENGEL, New York
JEAN SCHMIDT, Ohio                   ALBIO SIRES, New Jersey
DAVID RIVERA, Florida                ENI F.H. FALEOMAVAEGA, American 
CHRISTOPHER H. SMITH, New Jersey         Samoa
ELTON GALLEGLY, California           DONALD M. PAYNE, New Jersey


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Christopher A. Padilla, vice president, 
  Governmental Programs, IBM Corporation (former Under Secretary 
  for International Trade, U.S. Department of Commerce)..........     4
The Honorable James R. Jones, U.S. Congressman (retired), 
  partner, ManattJones (former U.S. Ambassador to Mexico)........    12

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Christopher A. Padilla: Prepared statement.........     7
The Honorable James R. Jones: Prepared statement.................    14

                                APPENDIX

Hearing notice...................................................    28
Hearing minutes..................................................    29
The Honorable Connie Mack, a Representative in Congress from the 
  State of Florida, and chairman, Subcommittee on the Western 
  Hemisphere: Prepared statement.................................    30
The Honorable David Rivera, a Representative in Congress from the 
  State of Florida...............................................    32
The Honorable Albio Sires, a Representative in Congress from the 
  State of New Jersey: Prepared statement........................    34


 THE COLOMBIA AND PANAMA FREE TRADE AGREEMENTS: NATIONAL SECURITY AND 
                       FOREIGN POLICY PRIORITIES

                              ----------                              


                        THURSDAY, MARCH 17, 2011

                  House of Representatives,
            Subcommittee on the Western Hemisphere,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:07 p.m., in 
room 2172, Rayburn House Office Building, Hon. Connie Mack 
(chairman of the subcommittee) presiding.
    Mr. Mack. The subcommittee will come to order. First I 
would just like to say that I appreciate so much those that are 
in attendance, the witnesses, the members who are here. 
Obviously, it is a third day. We have votes today coming up. 
Members will be leaving tonight and tomorrow, so we are going 
to try to move quickly through the hearing, although I think 
this is such an important hearing that it is my intention to 
find another time when we can also maybe continue this hearing 
or have another hearing on the same set of issues.
    After recognizing myself and the ranking member, or Mr. 
Sires in this case, for opening statements, I will recognize 
each member of the subcommittee for 2 minutes. I would ask the 
members that if they wish to forego their opening statements or 
shorten them, that would be greatly appreciated so we can get 
to our witnesses, but it is your choice. I don't want to take 
away your opportunity to be heard on this as well.
    We will then proceed directly to hearing testimony from our 
distinguished witnesses. The full text of the written testimony 
will be inserted in the record. Without objection, members may 
have 5 days to submit statements and questions for the record.
    After we hear from our witnesses, individual members will 
be recognized for 5 minutes each to question our witnesses. The 
chair now recognizes himself 5 minutes, and following my own 
direction, I will forego my opening statement, will place it 
into the record, but I just would like to say that the free 
trade agreements in Panama and Colombia represent much more 
than just trade agreements.
    These agreements represent in my opinion, or the lack of 
agreements to this point, represent in my opinion a failed 
foreign policy by this administration, that we are missing 
opportunities to lead, we are missing opportunities to create 
alliances with allies who count on the United States' 
friendship to help in their countries, which has a direct 
impact on our own economy and our national security.
    And so I am very concerned that the administration in its 
trip to Latin America has decided to forego Panama and 
Colombia. I think there is nothing more important that the 
administration can do right now than to show its support to our 
allies in Latin America. And the best thing the President could 
do is, either on the way to Latin America or when he gets back, 
to announce that he is going to send the free trade agreements 
to the Congress for passage.
    The old tired excuses about we are not sure if we have the 
votes in the House are wrong. The votes are here. We can pass 
the free trade agreements. And I think that it is time that the 
President, the administration, gets serious about foreign 
policy and recognizes that you can't lead or be a leader if you 
don't know what it is you stand for. And I am not sure that the 
administration knows what it stands for when it comes to 
foreign policy.
    Mr. Sires is recognized for 5 minutes.
    Mr. Sires. Thank you, Mr. Chairman. As someone who has 
since I got here promoted the trade agreement with Colombia, I 
agree that we are missing an opportunity that is very 
important. I was one of the co-sponsors of a letter last year 
to the President with Congressman Dreier in trying to get the 
administration to put forward the Colombia trade agreement. I 
certainly think it is an important step for this country.
    I think that Colombia has been more than a friend to this 
country, and we need friends in that region. I felt that they 
have worked tirelessly with this country, including when we 
wanted to put the Iranians on notice about their nuclear 
program.
    So I am truly supportive of this agreement. I will be very 
brief so we can get this hearing, and I appreciate the chairman 
holding this hearing. We share a lot of opinions together in 
terms of Colombia and Panama. Thank you very much, Mr. 
Chairman, for holding this hearing.
    Mr. Mack. Thank you very much. Mrs. Schmidt is recognized 
for 2 minutes for an opening statement.
    Mrs. Schmidt. Thank you, Mr. Chairman. And I will be brief. 
I echo your sentiments that it is failed foreign policy, failed 
economic policy, and failure with our friends down in Latin 
America. I can only echo that Colombia under President Uribe 
was stable, he turned the country around. Santos is following 
in his footsteps.
    In Panama, it is not only stable, but the widening of the 
canal is only going to open up economic opportunities for the 
U.S. When you look at the benefits that we would get under 
Colombia, 80 percent of U.S. exports of consumer and industrial 
products to Colombia, 90 percent to Panama, this is a no-
brainer. We really need to get on with these free trade 
agreements, and I hope that the President does that when he 
enters this trip at the end of this month.
    Mr. Mack. Thank you, Mrs. Schmidt. And Mr. Meeks is 
recognized for 2 minutes if he has a wish to make some 
comments.
    Mr. Meeks. Thank you, Mr. Chairman. I want to thank you 
also for conducting this hearing. And I think that unlike some 
other issues that we have to deal with here in the United 
States Congress, you will find that this is an issue where we 
can have some bipartisanship, that it just simply means that we 
just got to sit down and think rationally. And when you do then 
you really begin to understand the benefits of us making sure 
that Panama and Colombia are passed. Because truly it is 
beneficial for both sides and our entire hemisphere. Truly, it 
just makes sense when you look at Colombia and Panama, great 
friends and allies of the United States and who have each made 
tremendous strides on their own governments in trying to make 
sure that they have turned a corner there. And for us, you 
know, it is simple to me that they have access to our markets 
and we don't have access to theirs. And so it just seems to me 
it would help us create jobs and should be a part of the 
President's export initiative. And I am hopeful for the first 
time in a very long time that in short order we will be able to 
get a bipartisan free trade agreement with Colombia and Panama 
passed.
    And I thank you, gentlemen. I wait to hear from you. And 
again, I thank the chairman for conducting this hearing. I 
think it is beneficial and will help us get down the road.
    Mr. Mack. Thank you, sir, very much. Mr. Rivera from Miami 
is recognized for 2 minutes.
    Mr. Rivera. Thank you so much, Mr. Chairman. Thank you for 
holding this hearing. And thank you to the witnesses who are 
going to be presenting. I think it is important as we go 
forward to discuss every opportunity possible to make sure that 
Colombia and Panama are linked to the greatest extent that we 
can with the South Korea Free Trade Agreement. It is important 
that if you support free trade that the world know that we 
support all free trade, not just South Korea, but also Colombia 
and Panama, and that these free trade agreements be seen as a 
package. I think it is unfortunate that in the upcoming trip 
that President Obama is taking to Latin America he is not 
including stops in Colombia and Panama, two of our best allies 
in the region, two allies where not only there are mutual 
economic security interests, but national security interests. 
And I would hope as the President is embarking on his trip and 
conducting his trip while he is in Latin America that he makes 
sure not to shun them, at least in his public pronouncements on 
free trade. Because passing the Colombia free trade agreement, 
for example, is of utmost importance to moving our economy 
forward, creating jobs. It will eliminate trade barriers and 
immediately boost U.S. exports. In fact, U.S. GDP would 
increase by roughly $2.5 billion and exports would increase by 
over $1 billion, which would create thousands of jobs in the 
United States.
    While we are languishing in our commitment and dedication 
to free trade with these countries, the European Union and 
Canada have been promoting it quite vigorously and they are 
doubling and tripling their business with Colombia in the 
region. And I think this administration should take note of 
those movements. This would be important to make positive 
policy gestures toward our allies and making sure that Latin 
America knows we are enthusiastic about doing business with our 
allies.
    So I would just close by saying it is important to make 
sure that the message is sent that we approve all three trade 
agreements as a package; South Korea, Colombia and Panama.
    Mr. Mack. Thank you, Mr. Rivera. I would now like to 
introduce our witnesses. And again thank you so much for your 
patience in being here. First, the Honorable Christopher 
Padilla. Mr. Padilla served as Under Secretary for 
International Trade at the U.S. Department of Commerce. Prior 
to serving as Under Secretary, Padilla was Assistant Secretary 
of Commerce for the Export Administration, where he oversaw 
U.S. regulations governing the exports of items controlled for 
national security reasons. Currently Mr. Padilla serves as vice 
president of IBM, where he leads the company's Global 
Government Affairs Program and manages a team of professionals 
in more than 30 countries. Thank you so much for being here.
    And second, the Honorable James Jones, a former 
Congressman, a former Ambassador to Mexico. During his service 
in Mexico, Ambassador Jones was very successful in his 
leadership during the Mexican peso crisis, the passage and 
implementation of NAFTA, and in developing new cooperative 
efforts to combat drug trafficking. He also assisted U.S. 
businesses with commercial ventures in Mexico. Ambassador Jones 
provides business development advice and consulting for clients 
primarily in Mexico and Latin America.
    Thank you both for being here. Mr. Padilla, you are 
recognized for 5 minutes.

    STATEMENT OF THE HONORABLE CHRISTOPHER A. PADILLA, VICE 
PRESIDENT, GOVERNMENTAL PROGRAMS, IBM CORPORATION (FORMER UNDER 
SECRETARY FOR INTERNATIONAL TRADE, U.S. DEPARTMENT OF COMMERCE)

    Mr. Padilla. Thank you, Mr. Chairman, members of the 
subcommittee, for holding this hearing. I am honored to be here 
and honored to be on a panel with Ambassador Jones. In 2007, 
Mr. Chairman, I was serving as Under Secretary of Commerce, and 
I traveled with then Secretary Gutierrez and a bipartisan 
congressional delegation, including Mr. Meeks, to Medellin, 
Colombia. And as we got off the plane at the airport in 
Medellin I saw a line of armored SUVs waiting on the tarmac to 
take us into the city, and I confess, all I could think of was 
the scene from the movie, ``Clear and Present Danger,'' where 
Harrison Ford's convoy of U.S. Government officials in white 
SUVs gets ambushed in the streets of a Colombian city. I was a 
little nervous. And in my SUV, I don't know about yours, Mr. 
Meeks, I had a couple of Members of Congress who shall remain 
nameless, it was a bipartisan group, and they weren't saying 
anything either, so I think maybe we were all nervous.
    But as we drove into town at dusk we saw people crowding 
into busy sidewalk cafes, we saw excellent infrastructure, we 
saw families walking through parks with their children, and it 
was not the Colombia of the movies, nor the caricature that at 
least I had in my mind. What I was seeing was a country 
transformed. And in Colombia today terrorism and violence are 
being replaced by the rule of law, a huge investment in 
education and free markets. Colombia has strengthened its labor 
laws, it has cracked down on violence against unionists, and 
last year it was removed from the ILO's list of countries 
subject to labor rights monitoring. The increase in security 
has been so dramatic that today, a resident of the District of 
Columbia is eight times more likely to be murdered than a trade 
unionist in the country of Colombia. And far from being 
persecuted, Colombian labor unions are growing and they are 
growing fast, faster than any other country in the hemisphere 
with labor union membership, growing by 75 percent in the last 
7 years.
    But our dialogue here in Washington seems stuck in the 
past. We seem not to recognize this progress. Most notably in 
recent months the White House has stated it wants to move 
forward, but it has also said that there are further 
unspecified labor concessions from Colombia that will be 
needed. I am frankly not sure what more we can ask from this 
good friend and ally.
    The second point I want to make is that the United States 
already has free trade with Colombia and Panama, but it is one-
way free trade, or at least it was until the ATPA recently 
expired. A can of Colombian coffee comes into this country duty 
free, and it did for 19 years under the Andean Trade 
Preferences Act. But a computer server made by IBM in the U.S. 
pays a 5 percent tariff when we sell it in Colombia. Even Lou 
Dobbs I think could love this trade agreement, Mr. Chairman, 
because it rectifies what is an unbalanced, one-way free trade 
relationship, and it is all good for the United States.
    The third point I would make is that Colombia and Panama 
both stand out as shining examples of the success of U.S. 
foreign policy. In 1999, then Speaker Hastert and then 
President Clinton worked together on a bipartisan basis to 
create Plan Colombia, and since then Colombia has leveraged 
more than $7 billion in U.S. assistance to fight terrorism and 
drugs and to protect human rights. As a result, the FARC 
terrorists have been largely defeated. Coca production is down 
by 40 percent. Just a few weeks ago Colombia came off the U.N. 
Drugs Watch List. Who would have thought a decade ago that we 
would see such progress? All done while maintaining a vibrant 
commitment to free markets and democracy.
    Surely, this is the model that we hope other countries, 
including in the Middle East, will follow to maintain a 
commitment to democracy in free markets even as they defeat a 
terrorist insurgency and deal with insecurity on their own 
borders.
    What message does it send to the region if we turn our back 
on these allies despite their commitment to democracy, security 
and free markets? I fear, Mr. Chairman, that any continued 
delay would only embolden those who have a different and darker 
and non-democratic vision for this hemisphere.
    Mr. Chairman, America is falling behind in its economic 
engagement in this hemisphere. As Mr. Rivera and Mr. Sires both 
noted, Chinese investment in the region is increasing. The EU 
and Canada both have free trade agreements with Colombia and 
Panama. When Mercosur signed an agreement with Colombia 
recently, U.S. exports of agricultural products to Colombia 
dropped by half because they were replaced by Argentine and 
Brazilian exports.
    There is no more time to waste. Mr. Chairman, these 
countries are not the same countries they were even back in 
2007, or certainly the ones they were at the end of the 1990s. 
Their progress should be recognized. The economic case for a 
close relationship with these neighbors is compelling, and it 
is immediate. In enhancing or embracing a fuller partnership 
with Colombia and Panama, we serve not only our own foreign 
policy interests, but we set an example for others in the 
Western Hemisphere and the world to follow.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Padilla follows:]

    
    
    
    
    
    
    
    
    
    
    Mr. Mack. Thank you, Mr. Padilla. Ambassador Jones, you are 
recognized for 5 minutes.

  STATEMENT OF THE HONORABLE JAMES R. JONES, U.S. CONGRESSMAN 
  (RETIRED), PARTNER, MANATTJONES (FORMER U.S. AMBASSADOR TO 
                            MEXICO)

    Mr. Jones. Thank you very much, Mr. Chairman. It is a 
particular honor to testify here today. Your father, back when 
I was House Budget Committee chairman, was a valuable member of 
that committee and a friend, and I am delighted that you would 
invite me to testify here.
    My experience in trade goes back to 1973 when I first came 
to Congress. And during my 14 years in Congress I was on the 
Trade Subcommittee of Ways and Means that whole time. Then 
going to New York as CEO of the American Stock Exchange and 
developing both for our companies and for the relationships 
with the developing markets of Latin America, Asia and Africa. 
And then as Ambassador to Mexico before, after and in the 
implementation of NAFTA. And most recently the 12 years I have 
been CEO of ManattJones Global Strategies, our firm takes 
companies based in the United States into developing markets of 
Latin America and opens the markets, et cetera. And I found 
where trade can be helpful and trade can be unhelpful in doing 
business for American firms.
    Now, I don't believe that free trade agreements solve all 
the problems, and I must admit that many of us who have 
testified on behalf of NAFTA, et cetera, perhaps overstated the 
benefits to be projected. But I think it is indisputable that 
the free trade agreements the United States has made has been 
to the benefit both in the United States and our trading 
partners.
    The common benefits are that (A) we, U.S. exports increase 
in every instance. For example, Mexico was sort of an 
afterthought as a trading partner before NAFTA and now it is 
the second largest market for U.S. goods and services. The net 
job increases both in the United States and in our trading 
partner is indisputable. And what is also interesting, 
particularly in NAFTA, is that the jobs that are NAFTA-related 
in the United States pay on average almost 20 percent more in 
wages than non-NAFTA or nontrade international jobs in the 
United States.
    The intangible benefits are also very important to the 
United States and to United States business, and I particularly 
found this true in NAFTA. Doing business in Mexico for a U.S. 
company before and after NAFTA is the difference of night and 
day. The NAFTA regulations, the NAFTA requirements, are such 
that you rarely, if ever, are approached with something that 
would be a crime in the United States when you are doing 
business for a NAFTA country.
    So I think those are all common things that free trade 
agreements bring to our country. Not all trade agreements are 
alike and not all of them should require the same kind--some of 
them should require much more scrutiny, but I don't believe 
that these two trade agreements with Colombia and Panama fit 
that concern for several reasons.
    Number one, as has been mentioned, we currently have great 
trade advantages, and those advantages are being eroded because 
the United States has dallied while other countries have made 
free trade agreements throughout Latin America and have cut 
into our market share.
    Secondly, the exports and the imports with both Colombia 
and Panama are complementary and not competitive with the 
United States economic interest. For example, the U.S. has 
trade surplus in manufactured merchandise with both countries. 
Now, that is something that is very unusual. We have always had 
a services component surplus, but always a manufacture 
component deficit. We have surpluses with both Colombia and 
Panama. Neither Colombia nor Panama exports to the United 
States items that diminish job creation in the United States.
    In fact, it is just the opposite. The vast majority of 
imports to the United States from Colombia and Panama are oil, 
coffee, precious stones, cut flowers, fruits, prepared goods, 
seafood and gold. Those are not competitive with what we are 
producing in the United States.
    And fourth, the major U.S. exports to Colombia and Panama 
are machinery, aircraft, yarn, fabric and such agricultural 
products as wheat, corn, rice, and to a lesser extent pork and 
beef. So the U.S. has many advantages, but those are being 
diminished as we dilly and the other countries establish free 
trade agreements. The United States in the late 1990s and in 
the first decade of this century lost some very big 
opportunities to strengthen our ties with our Western 
Hemisphere neighbors. After the fall of communism, Latin 
America embraced free market economics and honest, competitive, 
open democracy, as well as making small strides toward the 
improvement of the rule of law. Nearly every nation in Latin 
America except Cuba admired and wanted to emulate the United 
States. But we became, as a nation, distracted elsewhere and we 
neglected attending to the needs and aspirations of our friends 
in the hemisphere.
    Now, these countries did not ask for foreign aid. What they 
wanted was more trade and to be more a part of the economic 
system of the United States. But both Democrats and 
Republicans, here it is bipartisan, dropped the ball, and as a 
result the perception throughout Latin America is one of 
neglect and disinterest by the United States.
    These two FTAs (free trade agreements), I think, can 
strengthen our foreign relations in the hemisphere while at the 
same time open new market opportunities for U.S. firms and can 
add U.S. jobs. Rarely does Congress ever come up with a 
proposal, that you have to study, that would be called a no-
brainer, as Mrs. Schmidt said. But these two free trade 
agreements come as close to being no-brainers and should be 
approved. They will have economic foreign policy and security 
benefits for the United States.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Jones follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    Mr. Mack. Thank you, Mr. Ambassador. We appreciate both 
testimonies. And I am going to begin with the questions.
    Mr. Rivera from Miami, you are recognized for 5 minutes.
    Mr. Rivera. Thank you, Mr. Chairman. I want to try and 
drill down on this issue of unresolved issues that I keep 
hearing about with respect to Colombia. It was quite 
disconcerting a few weeks ago when we had Assistant Secretary 
of State for Western Hemisphere Arturo Valenzuela here 
testifying, and he was asked specifically what are these 
unresolved issues, and he was not able to respond. In another 
meeting subsequent to that hearing with Trade Secretary Kirk, I 
asked him the exact same question, and there were several 
Congressmen present in that meeting, and he was unable to 
respond. But I keep hearing this specter of the term 
``unresolved issues.'' And I think that is just a code word, 
those are code words for labor concerns, as I talk to some of 
my colleagues here now.
    My understanding is that the Vice President of Colombia is 
a former union leader, is that correct, Mr. Padilla.
    Mr. Padilla. Yes, that is my understanding, sir.
    Mr. Rivera. It is also my understanding that he is very 
supportive of this free trade agreement between the United 
States and Colombia. So let's talk about some of these issues 
of, drill down even further, labor concerns. I have heard 
issues about death with labor leaders and labor members in 
Colombia. But I was given some statistics recently that said 
homicides against unions have declined by 83 percent since 
2002, from 196 to 33 cases.
    Can you speak a little bit to this issue of violence with 
union leaders?
    Mr. Padilla. Certainly. Maybe I can start. There is no 
question that violence against labor leaders has declined 
dramatically in Colombia. The homicide rate in that country 
overall has dropped by half, kidnappings have dropped by 90 
percent, and the country has made a special effort to protect 
trade unionists. In fact, the country has a program on which it 
spends about $360 million to provide protection details for 
anyone who asks for them and can make the case that they need 
it. And about 2,000 labor union leaders and about 10,000 judges 
are under that program.
    There is no question, Congressman, that in the past 
Colombia has been a dangerous place. It is a place with a 
violent history, it was subject to a violent terrorist 
insurgency. But I think the evidence is clear that there has 
not been, particularly in recent years, some sort of an effort 
to target labor union leaders. In fact, I think just the 
opposite; they have received more protection, and as a result, 
the level of violence has declined quite dramatically.
    Mr. Rivera. Go ahead, Mr. Jones, Ambassador Jones.
    Mr. Jones. Just two comments. Number one, one of the 
advantages of being around a long time is you get to see things 
ebb and flow, and both political parties have to work out the 
political issues of their own base, and so I think that is what 
is going on ultimately. And I think before too long they will 
come to the realization that the fact is, Colombia has made 
great strides in protecting the unions. There is no question. 
In fact, I was on the board of a major U.S. company and we had 
an opportunity to buy the major beer company in Colombia not 
too long ago. And the CEO said there is no way he would send 
any of his people into Colombia because everybody was targeted, 
and now a few years later it is much more improved.
    So I would say, based upon an anecdotal from my time in 
business primarily, that 10 or so years ago union leaders were 
targeted. I don't think that is the case now, and I think the 
Colombian Government actually is going the other way to 
prosecute and to protect union people.
    Mr. Rivera. It is also my understanding that the Colombia 
Free Trade Agreement and its labor provisions are identical to 
the Peru Free Trade Agreement, which had broad bipartisan 
support, is that correct?
    Mr. Padilla. Yes, it is correct, Congressman. It reflects 
the May 10th agreement, so-called May 10th agreement, made on a 
bipartisan basis between the then Bush administration and 
Democratic leaders of Congress, and the language on labor and 
environment in Colombia and Peru is identical.
    Mr. Rivera. Well, I think that pretty much makes the case 
that Colombia, and perhaps Panama as well, are being targeted 
and tarnished unjustifiably by this administration and the 
detractors of the Colombia Free Trade Agreement, which I think 
just makes the argument even more forcefully that all three 
trade agreements need to be treated as a package, because I 
don't think Latin American countries, particularly strong 
allies like Colombia and Panama, should be discriminated 
against, which is why I think if they are not brought forward 
as a package then South Korea should not go forward.
    Thank you.
    Mr. Mack. Thank you, Mr. Rivera. Mr. Sires is recognized 
for 5 minutes for questions.
    Mr. Sires. Thank you, Mr. Chairman. Ambassador Jones, I 
couldn't agree with you more. I have seen myself a change in 
Colombia the last few years. I travel just about every year to 
Colombia with a group that raises money for an orphanage, and 
every year that I go there I am amazed of the changes that go 
on in the country. I also had a very interesting dinner with 
one of the presidents of the colleges in Bogota, where during 
the dinner he stated to me that the second most studied 
language in Colombia today is Mandarin.
    So to me that raised a red flag. Obviously China is a big 
presence now in Colombia and increasing every year. So if we 
don't move forward with this trade agreement as Colombia has 
moved forward with the EU, Brazil, Canada and China, how would 
this further neglect of this agreement affect the American 
industries?
    Mr. Jones. First of all, let me comment on your issue of 
learning Mandarin. A very short time ago, just a few years, 
China was the 19th or 20th trade partner of Colombia's and now 
they are the second. And the projections show they will surpass 
the United States as the largest trade partner unless we are 
able to pass a free trade agreement.
    But that is not the only one we are losing business to. We 
are losing business to Argentina, Brazil, and the Mercosur 
countries in agricultural products. And ADM has lost a 
significant amount of business, for example, in wheat and corn 
into Colombia.
    So I think that, as I tried to point out in my testimony, 
our trade with Colombia is very complementary. What they sell 
to the United States are things that are not integral to the 
United States and what we sell to Colombia is integral to the 
United States and not to Colombia. So I think it is one of 
those hand-in-glove type agreements that we ought to be 
pursuing are passing.
    Mr. Sires. I think last year Colombia signed a trade 
agreement with Canada worth about $1,700,000,000 that we 
probably lost out on.
    Mr. Padilla, in your estimation, what is the roadblock, 
other than obviously the unions? Because I am trying to find 
out myself to see if I can unblock it.
    Mr. Padilla. Well, I would associate myself with Ambassador 
Jones' comments on this. I don't really think it is about labor 
issues in Colombia. I think great progress has been made. I 
think this is about the difficult domestic politics of trade in 
the United States, candidly. And what I hope will happen is 
that President Obama will take ownership of these two 
agreements, as he did with the Korea agreement, to his credit, 
in which he embraced that agreement, is prepared to submit it 
to Congress, and I think it will get a very strong bipartisan 
vote. There is no reason in my view that he couldn't and 
shouldn't do the same with Colombia and Panama, and I hope that 
he will.
    I think that really is the issue. The reason that I think 
Ambassador Valenzuela and Ambassador Kirk were not able to 
answer your question is we have not told the Colombians what we 
want. They have been asking for years and we have not told 
them, and the reason is because of the political challenges of 
dealing with this agreement in our own domestic politics.
    Mr. Jones. I would just add to my friends on my side of 
your aisle, and that is the reason I ticked off the products 
that Colombia sells to us and the products that we sell to 
them, it is in organized labor of the United States' best 
interest to promote this because the jobs are in manufacturing, 
in aircraft and various things, machinery and things like that. 
And those are the products we are selling to Colombia and can 
sell more of if indeed this free trade agreement passes.
    Mr. Sires. Just to comment, I also attended the swearing in 
of the new President, and to me it was disappointing there were 
not people from the State Department there in support of the 
President, of one of our friends getting sworn in. If it wasn't 
for a delegation--and, you know, I mentioned this to the 
Secretary of State when she was here--it was kind of 
disappointing that we did not have a good strong delegation in 
support of the new President in the direction that he is going 
to follow, as he said, he is going to follow in the same 
direction as Uribe. So it was disappointing. But we were there 
though.
    Thank you very much. Thank you very much for being here.
    Mr. Mack. Thank you, Mr. Sires. Mr. Meeks is recognized for 
5 minutes for questions.
    Mr. Meeks. Thank you, Mr. Chairman.
    Mr. Mack. If I may, I just want to say publicly that I 
appreciate you being here. I know that you are no longer on the 
subcommittee.
    Mr. Meeks. Unfortunately.
    Mr. Mack. Unfortunately for all of us. But your voice is 
important, and so I appreciate you taking the time to be here.
    Mr. Meeks. Thank you, Mr. Chairman. And the Western 
Hemisphere is, though unfortunately the numbers do not prevail 
so that I could be back on the subcommittee, but the work of 
the subcommittee is important and your leadership is vital. And 
even though my name is not on the official roster I think that 
you will see me as a frequent visitor to this subcommittee and 
the hearings that it has because the Western Hemisphere is 
deeply embedded in my heart. So I will be participating as 
often as I possibly can and as often as you will be willing to 
put up with me.
    Let me say that, first of all, I can't--there is not one 
single thing that I have heard from either one of you that I 
disagree with you. I think that we are all in lockstep in that 
regards. And I think that even with my colleagues here we all 
feel that we need to get this free trade agreement done, we 
need to talk about and pass South Korea, but these two trade 
agreements need not be left behind. I do think though that part 
of what is challenging is the internal politics and in trying 
to make sure that we pay attention to concerns that individuals 
have. And I will tell you, politics says that trade is only 
approved by 34 percent of the American public.
    So we all have our work cut out, so that we can really tell 
the American people the truth about trade, that basically our 
trade agreements balances our trade deficits, doesn't cause 
trade deficits. And when you look at the country that we have 
trade deficits, it is generally around oil and those areas and/
or with China, who we really don't have a--we have an 
agreement, but not the kind of trade agreement that we are 
talking about here that makes sure that we have the opportunity 
to go into other markets.
    And so some of the fear that I believe that the vast 
majority of Americans have with reference to trade agreements 
is that we will lose jobs, and that is not true. We clearly 
know that that is not true. If you just look statistically we 
can get around the fear. People sometimes confuse trade 
agreements with outsourcing. Those are two completely different 
things. Trade agreements helps bring jobs. And I think that the 
President is on the right track when he starts talking about 
his export initiative. I think that we need to fix what we do 
here also and give the American people the right perspective. I 
think that we do need to pass TAA, for example, because 
psychologically that helps the country, and puts them in a 
better position to understand trade. And those who may lose 
out, lose their job, and it might not even be from trade, but 
lose their job, we are concerned about them working. So if we 
pass TAA, I think that helps our argument and helps us move 
forward in trying to remedy this.
    And I also think that you know I have had a number of Latin 
America countries come to me concerned that we haven't extended 
the preference agreement. I think that is important. That sends 
a message also. And I think that people should graduate from 
the preference agreement to a trade agreement. That should be 
the natural flow of things. That is the way--especially on our 
hemisphere. They are our neighbors, and we need to change 
policies. I don't care whether it is a democratic 
administration or a republic administration. We are in the 
post-Cold War era, so we need to think of Latin America in a 
different way than we did when it was a Cold War.
    And the best way to think of it differently is to make sure 
that we begin to pass trade agreements where we become 
interdependent upon one another; whether we can begin to share 
and show respect to one other. And I think that as we look at 
the countries that we have entered into trade agreements with, 
that has happened. And I think that we miss a golden 
opportunity if we do a trade agreement, and I am a big time 
supporter of what we did with Peru, I was one of the major 
proponents there, but then it becomes a slap in the face that 
Colombia, who is just as big an ally to us, for us to pick and 
choose and say, okay, we will do one with this one but not with 
that one.
    And so I think that is the frustration that is beginning to 
set in with our Colombian allies. Why are we being picked on, 
why are we different, you know, when we can do one with Chile, 
how come you can't do one with us, you can do one with Peru, 
how come you can't do one with us? And so I think that we have 
got to get it done. I also think that there is times, and here 
is where I think the challenge is for the current 
administration. Every administration likes to put his or her, 
we have only had he's, we would like to have a she sometime 
soon also, but every administration likes to put their own 
stamp on it so it looks like it reflects something they did or 
didn't do. And I think that we are getting there.
    I think that Ambassador Jones was absolutely right, that 
now there is conversation that has taken place, and I am 
hopeful that just as soon as we can do South Korea, that 
immediately thereafter or right there at the same time, we will 
be able to pull through with Colombia.
    So I really don't have much of a question because I agree 
with everything that has been said. But all I want to do is to 
work with everyone in a bipartisan manner. Let's get this thing 
done because it is good for America and it is good for Colombia 
and Panama.
    Mr. Mack. Thank you, Mr. Meeks, and thank you for bringing 
your passion to the hearing, and you are welcome at the 
subcommittee hearing any time, even if I disagree with you. I 
think that the frustration is that everything points to a 
reason why these free trade agreements should be passed. The 
President should send them to the Congress immediately and they 
should be passed. Every hoop that the countries have been asked 
to jump through they have jumped through, to the point now 
where when you ask those who should know what else is it that 
you are looking for, they can't answer. I mean, I think we have 
exhausted every legitimate policy discussion on this, and now 
it is just politics.
    I would like, if you could, one of the things that I don't 
know is focused enough upon on these trade agreements is, what 
does it say about our foreign policy as it relates in Latin 
America for these two trade agreements? We have spent so much 
money over the years in Colombia to help with the drug cartels 
and the terrorist organizations, they are allies of ours. In 
your opinion, what does it mean if we continue to sit on the 
sidelines and have an almost nonexistent foreign policy in 
Latin America? What do you think it means to Colombia and 
Panama and how do you think that relates to our security?
    Mr. Padilla. Well, Mr. Chairman, let me first, if I could, 
just say to Mr. Meeks, I want to thank you for your leadership 
on this issue. You have been on this issue for a lot of years, 
and when these agreements pass with a strong bipartisan vote, 
as they will, we will owe you a debt of gratitude as a country. 
So thank you for your leadership. I know it is a difficult 
issue, particularly with some of your colleagues.
    Mr. Chairman, I think that what this says is that our Latin 
American friends cannot be sure that we are with them and we 
are falling behind. I think that is what it says. I would 
contrast this with our experience in Central America where we 
passed the Central America Free Trade Agreement, which was a 
very difficult free trade agreement to pass, also done by Mr. 
Meeks' leadership. Exports exploded to those countries. Our 
economic relationships deepened. And what we are seeing, for 
example, in El Salvador, where the President is going to visit, 
is a peaceful transfer of power from the right to the left, and 
yet that country has remained committed to democracy and free 
markets. I wish the same were true in Nicaragua. We need to 
show our engagement. And we get into trouble in Latin America; 
over the years, we have gotten into trouble, when we ignore the 
region, as we too often do. And I fear if we continue to delay 
these agreements for basically domestic political reasons, that 
it sends a message to our allies that they are better off 
dealing with themselves, with Brazil or with other countries in 
the region, and I don't think that serves our long-term 
interests.
    Mr. Jones. Mr. Chairman, I think we need to remind 
ourselves that Colombia chairs the U.N. Committee, United 
Nations committee implementing sanctions against Iran, that it 
has partnered, and I know this quite deeply--they are training 
the new Mexican Federal police force to combat the 
narcotrafficking and the criminal organizations in Mexico that 
threaten our borders. They are working in Afghanistan at our 
request on the counternarcotics trafficking and growing 
situation. So they have been a staunch partner of the United 
States.
    I think regrettably, both in terms of reporting and in 
terms of foreign policy, the United States has ignored Latin 
America all too often. We will have a spurt of interest in 
Latin America, and then it dies down. And right now we are in a 
position where they perceive us as not interested in them, 
ignoring their interests and they are getting frustrated, 
Colombia, specifically. And that is why they have so 
aggressively gone after these other free trade agreements with 
the European Union, with Canada, China, and the Mercosur 
countries.
    So I think our whole foreign policy, and this is true of 
Democrat and Republican administrations, need to focus more on 
our own neighborhood. Because if we are going to have a problem 
it is going to--and it could be exacerbated--by losing friends 
in our own neighborhood in the Western Hemisphere. So I would 
say that this is just a step forward in trying to combat that 
perception that we are not interested in the Western 
Hemisphere.
    Mr. Mack. Would you agree with me and others on this 
committee? I don't want to put words into all the committee 
member's mouths, that the fact that the President has chosen 
not to go to Panama and Colombia on this trip isn't something 
else that could be frustrating to Colombia and Panama--that as 
the President takes his trip, that once again they are being 
overlooked?
    Mr. Jones. I am generally a glass half full kind of guy, 
and what I am thinking this is going to show--his trip, the 
President's trip--will show the importance in a very personal 
way of the Western Hemisphere to the United States, and 
hopefully the trips to Panama and Colombia will come after we 
have reached the political agreements here in the United States 
and pass these two free trade agreements and it will be much 
more of a celebration at that time than it would be right now.
    Mr. Padilla. I think it is a little unfortunate, Mr. 
Chairman. One thing I observed in my time in government is that 
personal relationships between leaders really matter, and I 
think one of the reasons we have moved forward on Korea is 
because of the excellent personal relationship between 
President Obama and President Lee in Korea. And there is only 
so many times you can go to a G-20 meeting and meet the 
President of Korea and not have something to say about a trade 
agreement.
    That is not the case with President Santos or President 
Martinelli. So I think it is unfortunate, it is a missed 
opportunity, but I, like Ambassador Jones, am very hopeful that 
we will soon have reason for another trip and that trip will be 
a celebratory one.
    Mr. Mack. Thank you. And I want to take this opportunity 
again to thank you both for being here and to share your 
insights. I wish we had more time. Like I said, I hope that we 
will have another opportunity to have a hearing on this topic 
because I do think it is important.
    And I just want to leave with this: That I am deeply 
concerned about what all of this means to the world as it 
relates to our foreign policy. And as I stated in my opening, 
that you can't lead if you don't know what you stand for. And I 
think that the United States needs to get back on a track of 
knowing what we stand for and trying to lead in that direction.
    So thank you so much for being here, and the hearing is now 
adjourned.
    [Whereupon, at 2:55 p.m., the subcommittee was adjourned.]
                                     

                                     

                            A P P E N D I X

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     Material Submitted for the Hearing RecordNotice deg.



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                               Mack statement deg.
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                               Rivera statement deg.
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                               Sires statement deg.
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