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




                               before the

                         SUBCOMMITTEE ON TRADE

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION


                             MARCH 17, 2011


                          Serial No. 112-TR03


         Printed for the use of the Committee on Ways and Means

70-876                    WASHINGTON : 2011
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                      COMMITTEE ON WAYS AND MEANS

                      KEVIN BRADY, Texas,Chairman

GEOFF DAVIS, Kentucky                JIM MCDERMOTT, Washington
DAVE REICHERT, Washington            RICHARD E. NEAL, Massachusetts
WALLY HERGER, California             LLOYD DOGGETT, Texas
DEVIN NUNES, California              JOSEPH CROWLEY, New York
VERN BUCHANAN, Florida               JOHN B. LARSON, Connecticut

                       Jon Traub, Staff Director

                  Janice Mays, Minority Staff Director

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
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                            C O N T E N T S



Advisory of March 17, 2011 announcing the hearing................     2


Ambassador Miriam Sapiro, Deputy U.S. Trade Representative, 
  Office of the United States Trade Representative...............     7
The Honorable Robert D. Hormats, Under Secretary for Economic, 
  Energy & Agricultural Affairs, U.S. Department of State........    15
The Honorable Thomas C. Dorr, President & Chief Executive 
  Officer, U.S. Grains Council, Former Under Secretary for Rural 
  Development, U.S. Department of Agriculture....................    40
William D. Marsh, Vice President Legal, Western Hemisphere, Baker 
  Hughes, Inc., on behalf of Baker Hughes, Inc. and the National 
  Association of Manufacturers...................................    48
Ambassador Peter F. Romero, President and Chief Executive 
  Officer, Experior Advisory LLC, Former Assistant Secretary for 
  Western Hemisphere Affairs, U.S. Department of State, Former 
  U.S. Ambassador to Ecuador.....................................    52
Adam Isaacson, Director, Regional Security Policy Program, 
  Washington Office on Latin America.............................    57
General Barry R. McCaffrey, USA (Retired), President, BR 
  McCaffrey Associates, LLC, Former Director of the Office of 
  National Drug Control Policy Former Commander of the U.S. 
  Southern Command...............................................    68



                        THURSDAY, MARCH 17, 2011

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                           Washington, D.C.
    The subcommittee met, pursuant to notice, at 10:02 a.m., in 
Room B-318, Rayburn House Office Building, the Honorable Kevin 
Brady [chairman of the subcommittee] presiding.
    [The advisory of the hearing follows:]


                  Brady Announces First in a Series of

                     Three Hearings on the Pending,

                     Job-Creating Trade Agreements

                        Thursday, March 10, 2011

    Congressman Kevin Brady (R-TX), Chairman, Subcommittee on Trade of 
the Committee on Ways and Means, today announced that the Subcommittee 
will hold a series of hearings on the pending trade agreements with 
Colombia, Panama, and South Korea. According to the President's own 
statements, these agreements have the ability to create over 250,000 
American jobs. The first hearing will address the agreement with 
Colombia. The hearing will take place on Thursday, March 17, 2011, in 
the main Committee hearing room, 1100 Longworth House Office Building, 
beginning at 10 a.m. The Subcommittee will soon advise regarding 
hearings on the trade agreements with Panama and South Korea.
    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Committee and for 
inclusion in the printed record of the hearing. A list of invited 
witnesses will follow.


    In 2007, the United States concluded a trade agreement with 
Colombia, which is still awaiting Congressional consideration. On 
January 25, 2011, the Ways and Means Committee held its first hearing 
on this agreement, along with the pending trade agreements with Panama 
and South Korea.
    The Colombia trade agreement was also discussed at the Ways and 
Means Committee hearing with Ambassador Kirk, on February 9, 2011. At 
that hearing, in response to Chairman Camp's request that Ambassador 
Kirk set forth a concrete timeline for Congressional consideration of 
the Colombia trade agreement within the first six months of the year, 
Ambassador Kirk said that he would be sending a delegation to Colombia 
and would then develop ``a workable plan'' for moving the Colombia 
agreement forward. Ambassador Kirk stated that, prior to the submission 
of the FTA, ``it will be imperative to resolve issues regarding laws 
and practices impacting the protection of internationally-recognized 
labor rights, as well as issues concerning violence against labor 
leaders and the prosecution of the perpetrators.'' He further noted 
that the President had ``directed us to intensify our engagement with 
Colombia so that we can resolve these outstanding issues this year.'' 
The delegation sent by Ambassador Kirk was in Colombia the week of 
February 15.
    The U.S.-Colombia Trade Promotion Agreement would open new markets 
to U.S. exports and, in turn, benefit American businesses, farmers, 
workers, and consumers. The independent U.S. International Trade 
Commission (ITC) has estimated that implementing the agreement would 
increase U.S. exports by $1.1 billion and add $2.5 billion per year to 
U.S. GDP. The benefits of trade agreements are also long-lasting. Since 
2000, U.S. exports to the 13 countries with which the United States has 
implemented trade agreements have grown almost twice as fast as our 
worldwide exports.
    Colombia has concluded trade agreements with major trading partners 
and export competitors of the United States, so U.S. failure to 
implement our own trade agreement with Colombia could severely 
disadvantage U.S. exporters and jeopardize U.S. job creation. The 
Canada-Colombia trade agreement is expected to enter into force around 
July 1 of this year, removing significant Colombian tariffs for 
Canadian agriculture exporters while similar tariffs remain in place 
against U.S. agriculture exports. In 2008, Colombia implemented a trade 
agreement with the MERCOSUR countries, including Argentina and Brazil. 
Subsequent to implementation of that agreement, key U.S. agricultural 
exports to Colombia have decreased significantly.
    Over the years, several objections have been raised to our trade 
agreement with Colombia. Some have argued that sustained progress to 
address concerns about Colombian labor law and violence against workers 
in Colombia must occur before it is appropriate to consider the 
agreement. However, supporters of the agreement argue that passing the 
agreement will improve labor protections and express frustration the 
Administration has not identified concrete steps for Colombia to take 
to address concerns.
    In announcing this hearing, Chairman Brady said, ``Failure to move 
forward with the U.S.-Colombia trade agreement is undermining U.S. 
influence and leadership in our own hemisphere and putting at risk both 
good U.S. jobs and the competitiveness of U.S. exporters. The United 
States cannot afford to sit on the sidelines while Colombia implements 
trade agreements with other major countries, putting American workers, 
farmers, ranchers, manufacturers, service providers, and other 
exporters at a competitive disadvantage. We need a concrete plan now 
from the Administration for moving forward with the Colombia agreement, 
to allow Congressional consideration of all three pending trade 
agreements by July 1.''


    The focus of the hearing is on Congressional consideration of the 
pending trade agreement with Colombia. The hearing will address the 
economic benefits this agreement will bring to American businesses, 
farmers, workers, consumers, and the U.S. economy. In addition, the 
hearing will examine the national security and geopolitical 
implications of the agreement and will explore developments within 
Colombia that have occurred since the trade agreement was concluded.


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    Note: All Committee advisories and news releases are available at 


    Chairman BRADY. Well, good morning. I would like to welcome 
all of you, especially Colombian Ambassador Silva, to our first 
Trade Subcommittee hearing of the 112th Congress. Today's 
hearing is the first in a series of three hearings we will hold 
on the pending trade agreements with Colombia, Panama, and 
South Korea. This continues the examination the full committee 
began in its hearings on January 25th and February 9th.
    In this first of our hearings, we examine the U.S.-Colombia 
trade promotion agreement. It is important to understand 
today's hearing in the context of the full series of hearings 
we will be holding. I strongly believe that we should consider 
all three agreements by July 1st. I hope that the President has 
heard the repeated bipartisan calls from Congress to move 
forward promptly with all three of these agreements, rather 
than leaving one or another to lag behind. These are all good 
agreements. The time to move forward with all three is now.
    Why the sense of urgency? The answer is simple. America is 
being left behind. Take the case of Colombia. We concluded our 
trade agreement with Colombia in June 2007, going on 4 years 
ago. Other countries have taken advantage of our delay. They 
have moved aggressively to sign trade agreements with Colombia. 
And, as a result, many U.S. exporters now operate at a 
competitive disadvantage. They are forced to pay higher tariffs 
on exports to Colombia, and the exporters from some of our key 
    The U.S. share of Colombia's ag imports plummeted from 71 
percent to 27 percent in just the 2 years since the 
agricultural provisions of the Colombia Mercosur trade 
agreement went into effect. Direct cause of that dramatic 
decline is our failure to implement our trade agreement.
    It will only get worse if we delay further. The Canada 
Colombia trade agreement is expected to enter into force by 
July 1st. Colombia's agreement with the EU is also expected to 
enter into force this year. Colombia is rapidly concluding its 
negotiations with South Korea. Implementation of agreements by 
these other countries, and continued inaction on our agreement, 
will result in further missed opportunities to create U.S. 
jobs. In fact, it will result in a decline in existing U.S. 
jobs. We either move forward or we move backward; the choice is 
ours. Staying still is just not an option.
    I have stressed repeatedly how troubled I am by the failure 
to advance a Latin trade agenda. I am holding out hope that the 
President's departure this Saturday for Brazil, Chile, and El 
Salvador, his first trip to South and Central America as 
President, will mark the beginning of re-engagement with the 
    But the key is, where is Colombia on this agenda, and where 
is Panama? We cannot afford foot-dragging on these agreements, 
nor shabby treatment of these two important friends and trading 
partners. It is noticed by all our neighbors, threatens to 
undermine U.S. leadership in our hemisphere. And in the face of 
our inattention, our neighbors are forced to look elsewhere for 
dependable economic and geopolitical alliances.
    The consequences of such a plunge in our influence would 
extend not only the economic losses, but also the national 
security. Colombia is a strategic ally in the war on drugs. 
It's a steadfast democratic friend and a reason to include 
several increasingly undemocratic and anti-American leaders, 
like Venezuela and President Hugo Chavez. We need to stand with 
our friends, and we should start by moving forward with the 
Colombia trade agreement and our other two pending trade 
agreements by July 1st.
    I respect the views of our ranking member and the 
Administration about labor violence and labor rights, although 
I believe that Colombia's dramatic improvements justify 
congressional consideration. However, to the extent that some 
believe that more progress is necessary, it's only fair that 
they identify specifically what they would like to see, an 
action plan for achieving that goal, and a time table for 
completing it promptly. We need to do this to keep the--rather 
than keep the agreement in limbo forever.
    I would like to welcome all of our witnesses today, who--I 
appreciate their leadership and their advice and efforts in 
this effort. I want to thank them for being with us. I look 
forward to hearing the testimony of both panels. And at this 
time I would like to yield to Ranking Member McDermott for the 
purpose of an opening statement.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. And I am pleased to 
see the witnesses here today.
    I have to admit I was a little disappointed when I heard 
about this hearing. I hoped this would be the mark-up for the 
Korean free trade agreement. That agreement is done. The Korean 
free trade agreement creates incredible new export 
opportunities for American goods. It has the support of 
business, it has the support of labor. It has the support of 
Democrats, Republicans. The Administration says it is ready to 
submit the implementing legislation. Really, no obstacles 
remain. We should be moving on the Korea FTA now.
    But, for whatever reason, House and Senate Republicans have 
decided they can't do anything on trade until the Colombia FTA 
is ready. I simply don't get that. For years, Republicans have 
cried that passing the Korea free trade agreement puts American 
workers in businesses at risk of falling behind their European 
counterparts. In a September 2009 letter, Republican leadership 
argued that unless we approve the U.S.-Korea free trade 
agreement before the EU-Korean pact goes into effect, ``U.S. 
workers will lose $1.1 billion in exports to Korea, injuring 
industries vital to the U.S. economy, including machinery, auto 
parts, chemicals, plastic, food, meat, and the dairy sectors.''
    Well, the Obama Administration fixed the Korea free trade 
agreement and the EU free trade agreement is going into effect 
on July 1st. So why are we not dealing with Korea? Why aren't 
we working on the implementing legislation, is really my 
question today.
    No one is saying we should forget about Colombia. Just the 
opposite. Colombia has been a strong and critical ally. This 
agreement will strengthen the U.S.-Colombia relationship even 
further. But it makes no sense to hold up Korea while the 
concerns of the Colombian FTA are being addressed--badly needed 
fixes that the Administration is working on very actively now.
    We have a partner in this process, President Santos, who, 
unlike his predecessor, wants to work with us. In terms of what 
needs to be done in Colombia, here are some specifics that I 
believe we ought to be considering.
    Basic human rights are a big problem. Workers and labor 
rights are killed every day by the dozen. The rampage goes on 
year after year, and there is no justice. Between 2005 and 
2009, there were more union workers murdered in Colombia than 
in the rest of the world combined. And the workers who are not 
killed are intimidated to prevent them from exercising the 
basic human right to organize.
    Let me give you a real world example taken from the 
Colombian flower sector. This is an export sector. Seventy-nine 
percent of Colombian flowers come to the United States. Mothers 
Day is just around the corner and the flowers are coming. And 
almost all the flower workers are women. They are single moms. 
When flower section unions have attempted to assert their 
rights, they have been met with threats and violence.
    For instance, last year, workers at the Guacari plantation 
struck over unpaid wages and benefits. The company brought in 
thugs who beat the workers and intimidated them into resigning. 
Then the company replaced them with temporary workers. Not one 
perpetrator was arrested.
    The Republicans are obsessed with the Colombia FTA, but 
none of them would volunteer their wives or daughters to go to 
work for a Colombian flower company.
    And even if workers survive the violence, they can't 
exercise the basic right to organize, because of loopholes in 
Colombian labor law. One example is the use of cooperatives, 
which are shell entities employers use to hire workers 
precisely so that workers cannot form a union. And the use of 
cooperatives is rampant in export sectors like the ports, sugar 
cane industry, and the flower sector. For workers that can form 
a union, employers use another loophole, known as collective 
pacts, to effectively break the union.
    If there is the political will, Colombia can address these 
issues in months, not years. They can change their laws to 
prevent union busting. They could implement a work plan to 
significantly increase the size of its labor inspection force, 
train the inspectors, and improve enforcement. Colombia can 
make concrete, measurable progress on investigating and 
prosecuting violence against union workers. Until Colombia 
makes concrete progress, the rest of the trade agenda that will 
get Americans the jobs they desperately need should move 
    So, let's move the Korea FTA. It is ten times more valuable 
to the American economy than the Colombian FTA. Let's move the 
MTB. It's worth two-and-a-half Colombian FTAs. Let's move China 
currency. Fixing that would be worth about 100 Colombian FTAs. 
And we can extend our expired preference program in GSP and 
ATP. There are a lot of things we should be doing.
    There was broad bipartisan support for all these 
initiatives in the last congress. The question is, what 
happened? My fear is that it really isn't about trade. My fear 
is that a decision has been taken that the whole trade agenda 
will be held hostage, and that millions of jobs that come with 
it, for purely political reasons, will be held up. They want 
the Administration to fail, no matter what the cost to the 
American people.
    On Monday, the Senate Republicans announced they were 
blocking the nomination of the new Commerce Secretary and any 
other trade-related nominees until Colombia FTA is passed. 
That's throwing down the gauntlet. This is absurd at a time 
when we need jobs in this country. It is time for the 
Republicans to end their Colombia obsession, and for the first 
time since they took over the House 11 weeks ago, get to work 
creating jobs for the American people, starting with the Korean 
free trade agreement.
    My friend, Mr. Brady, and I have discussed this already in 
private. And I think everybody knows it is ready to be sent up. 
What is necessary is for the House to say, ``We are ready to 
have the mock-up.'' They will send it up, and they will start. 
And I hope that happens rather soon. Thank you.
    Chairman BRADY. Thank you. For the Members in the audience, 
we expect to have votes called around 10:15. So right now we 
will move ahead with our witnesses. And then, if the votes are 
called, we will recess for a brief period.
    And today we will have two panels of witnesses. The first 
is composed of two witnesses from the Administration whom we 
hope succeed in moving an aggressive trade agenda forward.
    Our first witness will be Ambassador Miriam Sapiro, deputy 
U.S. trade representative from the Office of the U.S. Trade 
Representative. We will also hear from the Honorable Robert 
Hormats, under secretary for economic, energy, and agricultural 
affairs at the U.S. Department of State. And we welcome both of 
you, and we look forward to your testimony. I would also ask 
our witnesses to keep their testimony to five minutes.
    Ambassador Sapiro, your written statement, like those of 
all the witnesses, will be made part of the record, and you are 
recognized for five minutes.


    Ambassador SAPIRO. Thank you. Thank you very much, Chairman 
Brady, Ranking Member McDermott, Members of the Committee. It 
is an honor and a pleasure to testify today about the U.S.-
Colombia trade promotion agreement.
    The Obama Administration is committed to a comprehensive 
trade agenda that opens global markets, dismantles barriers, 
and vigorously enforces America's trade rights. Central to 
these efforts are the three pending free trade agreements. Our 
goal is to have all three agreements, with their outstanding 
issues addressed, approved by Congress as soon as possible.
    Last week we notified the Ways and Means Committee that we 
are ready to begin collaborative work on the text of the 
implementing bill for Korea. We are working hard so that we can 
also move the Panama and Colombia agreements forward with the 
broadest possible support.
    With respect to Panama, our governments have agreed upon 
steps needed to resolve outstanding issues relating to labor 
laws and tax transparency that, when taken by Panama, will 
ready that agreement for congressional consideration.
    Today I want to discuss the Colombia FTA and its importance 
to the United States. Colombia is a key trading partner. It has 
a dynamic and growing economy, which is the third largest in 
South America. Colombia is also a vital partner of the United 
States more broadly, both in the region and globally.
    The Colombia FTA holds the prospect of substantial trade 
benefits for U.S. workers, businesses, farmers, and ranchers by 
eliminating tariffs on U.S. exports, in my cases, upon entry 
into force. The International Trade Commission has estimated 
that the FTA would expand exports of U.S. goods to Colombia by 
more than $1.1 billion, and increase U.S. GDP by $2.5 billion.
    The agreement's benefits go beyond elimination of tariffs 
on goods. It will also provide significant new access to 
Colombia's services market, improve standards for intellectual 
property rights protection, open government procurement 
opportunities, and safeguard U.S. companies operating in 
Colombia against discriminatory or unlawful treatment.
    This agreement will also help U.S. products remain 
competitive as Colombia forges new relationships with the EU, 
Canada, and other trading partners.
    Finally, it will help strengthen the Colombian economy, 
bolstering a steadfast partner in the hemisphere.
    As important as these benefits are, President Obama has 
made it clear that any trade agreement we send to Congress must 
be in the interest of Americans, and also be consistent with 
our values. The Administration has heard from a broad range of 
stakeholders, and has subsequently made clear to Colombia that 
three areas of concern must be addressed: first, the protection 
of internationally recognized labor rights; second, prevention 
of violence against labor leaders; and third, the prosecution 
of the perpetrators of such violence.
    We understand these concerns are shared by the Santos 
Administration, and we are encouraged by their recent actions. 
But more needs to be done. We now have a window of opportunity 
to work on securing important improvements, and we are not 
losing a moment to do so. I am pleased to announce that shortly 
after my testimony today, I will meet with senior officials 
from the Colombian Government who have flown in to continue our 
    As you know, on February 9th, Ambassador Kirk announced 
that the President had directed him to intensify our engagement 
with Colombia to resolve the outstanding issues as quickly as 
possible this year, and submit the Colombia FTA to Congress 
immediately thereafter. Less than a week later, I met with 
Colombia Ambassador Silva. Shortly thereafter, during the week 
of February 14th, USTR led an interagency team composed of 
State Department, Labor Department, and White House officials 
to Bogota to obtain up-to-date information.
    Last week, I met in Washington with a high-level delegation 
from the Santos Administration to discuss how best to promote 
our shared goals of protecting worker rights and addressing 
violence and impunity.
    We are also intensifying consultations with key 
stakeholders and Members of Congress, including House and 
Senate leadership. We are working quickly, but thoughtfully. 
The Obama Administration shares both the sense of urgency and 
the concern for worker rights that we have heard from many 
Members of Congress, as we seek to advance the Colombia FTA.
    In the meantime, Congress can immediately support the 
United States' economic and strategic partnership with Colombia 
by renewing the Andean Trade Preference Act for as long as 
possible. We also call on you to keep faith with America's 
workers by renewing trade adjustment assistance as soon as 
    We look forward to working with you on both the Colombia 
FTA and our broader trade agenda in a manner that builds 
bipartisan support. Thank you.
    [The statement of Ambassador Sapiro follows:]
    Under Secretary Hormats, thank you for joining us today. And you 
are recognized.


    Mr. HORMATS. Thank you, Mr. Chairman, Ranking Member McDermott--and 
Happy Saint Patrick's Day--and member of the committee. It's a great 
honor for me to testify before you today. I have testified before this 
committee numerous times in the past, and always look forward to doing 
that. I do so today with particular enthusiasm, because of the 
importance of this topic for the American people, and for our strategic 
relations with Colombia and the hemisphere.
    With your permission, I will briefly summarize my remarks and 
submit a full statement for the record. Ambassador Sapiro has noted our 
concerns related to the protection of internationally recognized labor 
rights, violence against labor leaders, and the prosecution of 
    Congressional approval of our trade agreement with Colombia, once 
our concerns have been met, will be important for both the economic and 
the national security interests of the United States for several 
    Colombia has been a steadfast partner. This agreement, in addition 
to providing considerable economic benefits here at home, will 
strengthen our relationship with this key friend, and increase our 
influence in the entire region. This agreement will also enhance 
Colombia's gains over the past decade in key areas, such as human 
rights and the rule of law. It will help consolidate and strengthen the 
Santos Administration's labor rights reforms, and allow Colombia to 
make progress on the social inclusion issues that President Santos has 
identified as his principal challenge.
    Finally, the agreement is key to regaining our competitive edge in 
an important market where we are increasingly losing market share, as 
you have indicated in your opening statement, Mr. Chairman. We believe 
strong bipartisan U.S. support has helped Colombia to make historic 
progress, improving security for its citizens, and stemming the flow of 
drugs to the United States.
    Since 2002, homicides are down 45 percent, kidnapping is down 92 
percent, and terrorist attacks down 71 percent. Since 2001, cocaine 
production potential has fallen 46 percent, and the area under 
cultivation has decreased by roughly 20 percent.
    Since 2002, Colombia has extradited over 1,149 criminals, including 
major drug traffickers, to face justice in the United States. Columbia 
is a valued partner, sharing its expertise and confronting 
transnational crime throughout the hemisphere and beyond.
    Since 2007, Colombia has trained approximately 6,000 Mexican police 
and judicial officials, and provided security assistance to Mexico, 
Haiti, Central America, Afghanistan, among others.
    Colombia is also an emerging global leader. It sits on the UN 
Security Council and chairs the Iran and the Sudan sanctions 
committees. It participates in peacekeeping operations in many other 
parts of the world.
    This is a decisive moment in our hemisphere. Moving ahead with the 
Colombia agreement is key to restoring our regional leadership and 
credibility. The agreement will help Colombia consolidate its success 
in putting its democracy and economy on a sound footing by adopting 
additional market reforms and strengthening effective social policies. 
It will silence critics who claim we are ceding leadership in the 
region and unable to deliver for our closest partners.
    The Santos Administration has denounced threats to labor and human 
rights leaders, increased penalties for violence against human rights 
defenders, made it clear it respects the role of labor and human rights 
groups, and increased funding for its protection program, which now 
cover over 11,000 at-risk individuals. Colombia's prosecutor general's 
office reports that it is investigating more than 1,300 labor-related 
cases, and has obtained 344 convictions.
    There is, of course, more to be done, and we are working with the 
Santos Administration to build on these achievements.
    This winter Colombia also suffered major flooding. As a close 
friend and partner, Colombia deserves our assistance in that respect, 
as well.
    I also join Ambassador Sapiro in urging Congress to re-authorize 
the Andean Trade Preference Act, as well as GSP and TAA at the earliest 
opportunity and for the longest possible period. These programs will 
support U.S. jobs and promote economic development overseas and provide 
greater certainty for American businesses and investors.
    Colombia is a growing market of 46 million customers. In 2010 
Colombia bought $12 billion in U.S. goods, more than Russia, Spain, or 
Turkey. It plans to invest over $15 billion in infrastructure projects 
over the next 5 years. Without an agreement, U.S. exporters could miss 
out on these promising commercial possibilities, and that would cost us 
jobs at home. And therefore, that export element is particularly 
important to a lot of American workers in a lot of industries.
    Colombia is currently pursuing FTAs with our toughest competitors, 
including the EU, Japan, and South Korea. China is now Colombia's 
second-largest trading partner, and we are losing market share to 
Brazil, Canada, and the EU. We are no longer Colombia's leading 
agricultural supplier, either. The Colombia-Canada FTA enters into 
force in July, further jeopardizing our wheat exports.
    In closing, I would just like to emphasize that securing approval 
of a high-standard agreement with Colombia is paramount for both our 
bilateral partnership and for our regional influence.
    Thank you very much, Mr. Chairman and Members of the Committee.
    [The statement of Mr. Hormats follows:]
    Ambassador Sapiro, first, please let Ambassador Kirk know I 
appreciate the work, very good work, that was done to close out 
Korea. I understand technical discussions are underway on that 
agreement. And since Colombia and Panama will not have changes 
in text, I see no reason we shouldn't move forward with those 
technical discussions on those two, either. And I appreciate 
Ambassador Kirk's engagement in the Asia-Pacific region, 
through the Trans-Pacific partnership. I think that's 
important, as well.
    Part of the goal of moving these three pending agreements 
is not just new sales for U.S. businesses and workers, but also 
to clear the way for further trade engagement throughout the 
    Ambassador Sapiro, when Ambassador Kirk appeared here 
before the committee and before the Senate committee, he talked 
about the intensifying efforts on closing out these pending 
trade agreements. And he heard at the time a lot of frustration 
on both sides of the aisle about how long the agreement has 
taken place.
    So, at this point, have you now given the Colombians a 
workable, concrete action plan, and schedule for resolving any 
outstanding concerns?
    Ambassador SAPIRO. Thank you, Mr. Chairman, for that 
question, and also for your kind words that I will certainly 
relay to Ambassador Kirk. He is fully engaged, as we all are, 
in moving ahead on multiple fronts, including TPP and other 
important trade issues that we believe have market opening 
opportunities for American workers, farmers, and ranchers.
    Just as we took the time to get a good Korea agreement, we 
are taking our time, although moving fairly rapidly, as I 
indicated, to ensure that we are in a position to advance the 
Colombia agreement to you. To do that, we have sat down 
intensively with the Colombian Government to discuss our 
concerns and develop what are clearly shared goals.
    The Colombian Government is now considering what 
initiatives they can take in order to show clearly that we are 
advancing towards our shared goals. We have an opportunity, a 
terrific opportunity, working closely with the Santos 
Government, to achieve these goals. As Ambassador Kirk has 
said, we are pushing on an open door. The government is 
dedicated and ready to work with us, and we are working 
intensively. We are working quickly, and we are working 
    Chairman BRADY. Thank you. Let me reiterate the need for 
that concrete, workable plan. Colombia has responded positively 
to every request we have made. Now, we promised a working team 
and benchmarks 18 months ago, and didn't provide it. It's 
critical that they understand what is expected of them, so that 
they can respond accordingly.
    So, again, reiterate the need to tell them what is expected 
of them, to work together with them to create those benchmarks 
now, in days--in your meeting this afternoon, for example--in 
order to be in the close-out stage of this agreement.
    And, Under Secretary Hormats, a couple of weeks ago, 11 
former assistant secretaries of state who served both 
Democratic and Republican presidents, strongly endorse this 
trade agreement and our other two pending agreements, calling 
on the present congress to work together to ensure passage by 
July 1st of this year. In this letter they express serious 
concerns about the harm caused by our delay, both economically 
and with regard to our influence in the hemisphere. And I very 
much share that concern, and would like to ask you about 
whether you do, too.
    And, specifically, I would appreciate your views on China's 
rising influence in Latin America. I am concerned that China 
may step in and assert its own leadership in our own 
hemisphere, because of the vacuum created by the inability to 
lead on trade and other issues in Latin America. Would you 
    Mr. Hormats. Sure. First, just let me underscore what 
Ambassador Sapiro said. That is, they are working very hard to 
put together a good agreement. And I can tell you she has been 
working, and Ambassador Kirk, and their colleagues have been 
working very hard, and with as much speed as they possibly can 
to move forward. This is a very high priority for them, for 
USTR, and for everyone in the government associated with this.
    With respect to the China issue, I'm very glad you 
underscored this. It does illustrate a point that I mentioned 
in my testimony, and that is we are in a more competitive world 
than we were 5 or 10 years ago. And the competition is coming 
from places not just within our hemisphere, and not just 
Europe, but we are getting competition from countries in Asia--
like China, as you have mentioned, Mr. Chairman.
    And, therefore, one of the reasons that USTR is working so 
hard on this is to put together a really good agreement that 
does defend America's trading interests, that advances 
America's trading interests, so that we will be able to be more 
competitive, and we will not lose competitive share to 
countries such as China.
    China is making a move throughout the hemisphere. They're a 
big trading partner with Brazil. They are big trading partners 
with other countries in the region. And one of the reasons we 
consider progress on this agreement, and coming up with a 
really good agreement to be so important to strengthen our 
ability to compete vis a vis the Chinese in Colombia. And we 
aim to do that in as many ways as we possibly can.
    As I also pointed out, it's not just from China. An 
agreement like this will help us to compete on wheat sales with 
Canada, for instance. So we are very cognizant of the fact that 
there is competition. President Obama said that this was a 
Sputnik moment. We are seeing Sputniks coming from all over the 
world, which means we are seeing more competitive pressures 
from all over the world, which is why we regard progress on 
this as so important, and why so much work is being done to 
make progress as quickly as possible.
    Chairman BRADY. Thank you, sir. Appreciate it. Ranking 
Member McDermott is recognized.
    Mr. MCDERMOTT. Thank you. To both of you I have a question. 
And I understand that you are in negotiation----
    Chairman BRADY. If I may, we have about two minutes left in 
the vote. I would like Mr. McDermott to lead off the 
questioning when we return. We will recess until just 
immediately after the last vote is taken. Thanks.
    Chairman BRADY. The subcommittee will reconvene. Again, I 
apologize to Mr. McDermott for the interruption of votes, and 
yield to lead off questioning.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. I realize, 
Ambassador, that you do not want to negotiate in public, or 
talk about the specifics of what is on the table with the 
Colombians at this point, but I would appreciate anything you 
can do to help us understand a time line. I know the Chairman 
has asked for a time line, and you do not want to give a time 
line, because with negotiations, it is over when it is over. 
But I would like to hear from you if there are any issues that 
you think are particularly problematic in the process.
    I hear the question about whether we get it done or we are 
going to fall behind. And I notice from your testimony that, 
actually, exports have increased by 27 percent to Colombia in 
the last year. So I would like to understand what we are 
falling behind on. Explain to me how that develops, or why 
people say that. They can say it but I want to know if there is 
any basis for it.
    Ambassador SAPIRO. Thank you, Congressman. I am pleased to 
be able to report to you that exports are increasing. Our 
concern about competitiveness is that our share of the market 
in many key sectors is shrinking. And, as both I mentioned and 
Under Secretary Hormats, Colombia is understandably forging 
ahead to develop new trading partnerships with the European 
Union, with Canada, with Japan, with Korea, and with other 
    So, we do not want to be in the position of ceding market 
share, if we can help it. And so, for that reason, we would 
like to advance this agreement, provided that the core concerns 
that we have identified are addressed. And we believe that the 
Santos Government shares the goals that we have set forth on 
labor rights and on violence and on impunity. And, together, we 
are working as quickly and thoughtfully as possible to finish 
this process and to be able to submit the agreement immediately 
thereafter to the congress for its consideration.
    Mr. MCDERMOTT. Could you give us a little bit of details 
about how quickly it's worked? Because I understand that you 
went down there and they came back and there has been almost a 
continuous flow of people between here and Bogota around this 
agreement. So it sounds like you are working a little bit 
faster than bureaucracies sometimes move on things.
    Ambassador SAPIRO. We are working faster than intensively, 
perhaps. We are being responsive to those that have asked us to 
work more quickly, and we're also being responsive to those who 
have asked us to be sure to identify concrete steps that the 
Colombian Government can take to address the serious concerns 
that we have identified.
    Mr. MCDERMOTT. Do you see anything that cannot be resolved?
    Ambassador SAPIRO. I am optimistic that we will be able to 
reach a good resolution fairly quickly. And that is why we have 
worked so intensively over the past several weeks, both in 
Washington and in Bogota, to try and achieve such a result.
    Mr. MCDERMOTT. One of the things that is a question for me 
in thinking about these agreements is that trade is good. I 
mean, okay, we will accept that. Then we get to the question of 
why people are working for $1 an hour, and why poverty still 
exists and has not changed in these countries. It seems to me 
that that is the seed bed for the Hugo Chavezes and others to 
spring up, if there is no advancement for the ordinary citizen.
    And I would like to hear either of you. It seems to me that 
it is counterproductive just to have trade if you, in fact, are 
continuing the repression of workers and so forth.
    Ambassador SAPIRO. We believe that trade is one way that we 
can help develop a growing middle class in our trading 
    I had the good fortune of representing the United States at 
the CAFTA-DR ministerial in San Salvador last month. And that 
agreement, for example, is one where we have seen tremendous 
growth in our partner countries, and we continue to see such 
growth, which serves both their economies, as well as ours, and 
stability in the region.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    Mr. HORMATS. May I just comment very briefly on that, just 
to underscore what Ambassador Sapiro has said. And that is your 
point about trade and its link to development is a very 
important one. One of the things we find when we look around 
the world is that trade does open up new opportunities for what 
one might call inclusive growth. And the more opportunities 
there are for trade, the more opportunities there are for 
growth in these countries.
    And one of the things that the Santos Administration has 
been focusing on very directly, and is a very high priority of 
the president and his vice president, who, as you know, is a 
former labor union leader, is to expand opportunities in 
Colombia for more and more people to participate productively 
in the economy, for just the reasons you've mentioned. Because, 
as you know, the country has a history of difficulties with 
FARC and other groups.
    They are not focusing entirely on trade, but they're using 
a lot of internal measures, as well, to strengthen their 
development programs, and to give more people opportunities to 
participate in productive sectors of the economy. And we think 
that this agreement can complement and reinforce and help them 
to consolidate some of those broader efforts that they are 
making to give more people more opportunity. So, it's a very 
important element of this overall equation.
    Chairman BRADY. Thank you, Under Secretary. Mr. Davis is 
    Mr. DAVIS. Thank you, Mr. Chairman. I find it ironic that 
Ambassador Sapiro is citing the Central America free trade 
agreement as an example of lifting people up, economically, 
when, in fact, the same opponents of the Colombia free trade 
agreement were using the exact same false arguments during the 
CAFTA negotiations, and moving to pass that through the House, 
which--Mr. Brady and I were actively working behind the scenes 
to move that bill.
    What we see is economic opportunity opening up if this 
agreement which the Colombians desperately want to see pass 
passed, and it has languished for four years now. This is not a 
question of getting more information, it is a question of 
domestic politics, and one party intruding upon what is not 
only good for the country economically, but more importantly, 
from a security standpoint, which leads to my question.
    Under Secretary Hormats, our economic relationship with 
Colombia is, in fact, very important in its own right in so 
many ways. We gain a dramatic amount of benefit by that 
agreement passing. However, it is also a key ally in South 
    You mentioned FARC. Hugo Chavez is actively helping them. 
He is helping them to destabilize this democracy. More than 
that, he is working with narcoterrorists. He has ties all over 
the world with, frankly, evil groups that stand against every 
value that we have when we talk about propagating American 
values. Colombia has been a light in its movement towards 
liberty down there.
    And I see our interests being sorely hurt, not only by this 
four-year delay over domestic politics that, really, are going 
to hurt the very workers that say they want this in the long 
run, but it is also a key link in the inter-American drug 
trade, north and south. If we do not implement the agreement, I 
think we are allowing people in Latin America to question our 
commitment to the region. We have lagged. The EU, China, other 
areas are moving in. We are seeing a drop off in our exports 
significantly, a drop off in our trade, a drop off in our 
influence. And the security concern is growing.
    I am not alone in this belief. In fact, in May of 2008, 5 
former commanders in chief of the U.S. Southern Command, 
Generals James Hill, Peter Pace, George Wilhelm, George Jowan, 
and Barry McCaffrey, who we are going to hear from later, who 
is here today, he wrote an open letter to Congress, urging the 
support for the Colombia free trade agreement.
    We will be hearing General McCaffrey's testimony a little 
later. But in light of the significant U.S. strategic interest 
in this area, what is the importance of this agreement in 
avoiding a setback in U.S. influence?
    As we have been dallying through the years with the back-
and-forth same-old political arguments that were used against 
the Central America free trade agreement, I know there is a 
great concern in the military that if Chavez can completely 
destabilize the region, as I have heard from other chiefs of 
staff in Latin American countries--CAFTA country military 
chiefs of staff have asked me very candidly, ``What have you 
not gotten this agreement ratified?'' It is so important to us 
in dealing with our security threats?'' Could you comment on 
    Mr. HORMATS. Yes, I would be glad to. As I mentioned in my 
testimony in a very short sentence--but I think it makes the 
point--one of the reasons we want to have a good agreement, one 
of the reasons that Ambassador Sapiro and her colleagues are 
working so hard to get one----
    Mr. DAVIS. Why does it take four years to get a good 
    Mr. HORMATS. Well, I cannot comment on the past, but all I 
can tell you is that they are working very hard at the moment 
to get a good agreement as soon as they possibly can.
    And one of the reasons is the fact that we think it will 
help promote jobs and growth in the United States. But another 
reason is exactly the reason that you have mentioned, and that 
is as I said in my statement, that we want to demonstrate in 
the region that we can deliver for our closest partners. And 
Colombia is a very close partner in dealing with issues that 
you have mentioned. While others in the region who are intent 
on destabilizing, rather than stabilizing the region.
    Mr. DAVIS. Wouldn't it be in our compelling interest to 
expedite this agreement, rather than a game going on for years?
    Mr. HORMATS. I think that is what the USTR is trying to do. 
They are trying to make as much progress as they can to get a 
good agreement, and--as soon as they can. And one of the 
reasons is we recognize fully your point on the security 
    They are a very important security partner for the United 
States, both in terms of dealing with their neighbors, and they 
have been very helpful in a lot of UN peacekeeping operations. 
And as a provider of assistance, technical assistance, they are 
helping other countries--including Mexico--to deal with drug 
    Mr. DAVIS. If I could reclaim my time, sir.
    Mr. HORMATS. Sure.
    Mr. DAVIS. I appreciate that. I served with the Colombian 
military in the Middle East, running flight operations in an 
international peacekeeping force. As a soldier, I have an 
intimate interest in seeing the changes that have taken in 
place from when we were providing direct technical military 
assistance just to maintain law and order.
    Mr. HORMATS. Right.
    Mr. DAVIS. When I see where we are now, and the dallying 
over--yes, we are expediting. Expedite means to move quickly. 
Again, it is four years. The Speaker of the House dropped this 
down. Then, when the new Administration came in, the ambassador 
said that this issue was in our court here. We are continuing 
to delay. It needs to move. And frankly, I believe we are 
rubbing the Colombian Government in the mud if we do not move 
this agreement in an expedited fashion.
    Chairman BRADY. Thank you. Mr. Reichert is recognized.
    Mr. REICHERT. Thank you, Mr. Chairman. Welcome to both of 
you. And I want to add to the chairman's comments, earlier 
comments. I appreciate all the hard work that you both have 
done, and Ambassador Kirk included, and the President, on the 
Korean agreement. And it is a privilege to serve with you both 
on the economic council, as we look for ways to double our 
    And I think all of us in the room recognize that one of the 
ways that we do that is to pass trade agreements. And one of 
the figures that keeps being repeated, especially by myself 
lately, is the fact that the last time we did double exports 
was from 1995 to 2007, when we passed 9 trade agreements.
    So, I think all of us recognize how critical this is, and 
that we are all working for the same purpose, and that is 
really to create jobs here in the United States and turn this 
economy around.
    So, you are right to push for a swift movement on Korea. 
But the questions remain, certainly, around Colombia. It has 
been sitting here since 2007, as has been mentioned. So we are 
looking at July 1st? At least that has been the date that has 
been given to us, as a possible arrival date of a Korean 
agreement for consideration by the House. But there are some 
similarities, I think, in these agreements as we look at Korea 
and Colombia. And so I think some of us get a little confused 
as to the delay, the reasons for the delay.
    So, I really like yes or no answers, it speeds the process 
up a little bit. So, Mr. Secretary, like Korea, doesn't the 
same argument hold true for Colombia, when you look at the loss 
of market share? That is a true statement. We are losing market 
share--I think you just mentioned that in your testimony--in 
both Korea and Colombia, correct?
    Mr. HORMATS. Yes, we are losing market share.
    Mr. REICHERT. Especially concerned about Canada, because 
they are moving forward with a July 1st date also.
    Mr. HORMATS. Yes, and that will cause us to lose market 
share in wheat, in particular.
    Mr. REICHERT. Especially important to the eastern side of 
Washington State.
    Also, like Korea, doesn't the Colombian agreement contain 
some of the same strong language surrounding labor protections?
    Mr. HORMATS. I will leave the details of the agreement to 
Ambassador Sapiro.
    Mr. REICHERT. But essentially it is the same language, is 
it not, Ambassador?
    Ambassador SAPIRO. Thank you, Congressman. We do have a 
strong labor chapter in our FTA with Colombia. We want to make 
sure that the provisions in that agreement with respect to 
internationally recognized labor rights----
    Mr. REICHERT. Could I interrupt, just for a second? I am 
    Ambassador SAPIRO. Certainly.
    Mr. REICHERT. But isn't the language in the Korean 
agreement and the Colombian agreement essentially the same? We 
are looking at passing Korea. It is essentially the same 
language, right? So the Korean agreement must meet the same 
standard, internationally, as the Colombian language does. Yes 
or no?
    Ambassador SAPIRO. Congressman, our goal is to present to 
you high-standard agreements----
    Mr. REICHERT. Yes, ma'am. No, I understand that. But 
isn't--and my question is, isn't the language the same in the--
    Ambassador SAPIRO. There are strong----
    Mr. REICHERT. In the Korean agreement and the Colombian 
agreement, when it comes to labor? And, matter of fact, we can 
throw in the environmental language also. Is that not the same 
as the Korean agreement?
    Ambassador SAPIRO. There are strong----
    Mr. REICHERT. Yes or no, ma'am, please. I hate to--you 
know, I know you are trying to answer in a politically correct 
way, but we all have--we know what the language says. So is it 
the same language, or not?
    Ambassador SAPIRO. There are strong provisions in the 
Colombia agreement and there are strong provisions in the 
Korean agreement----
    Mr. REICHERT. Does the Korean agreement meet the 
international standards on labor and the environment?
    Ambassador SAPIRO. The Korean agreement? Yes.
    Mr. REICHERT. Yes. So, if the same language exists in the 
Colombian agreement, then does that not also meet the 
international standards?
    Ambassador SAPIRO. I have not had an opportunity to do a 
side-by-side comparison. So what I can say is that we have high 
standards in both agreements. There are, however, serious 
concerns with respect to the situation on the ground in 
Colombia that does not exist with respect to Korea. We did----
    Mr. REICHERT. Okay. I would like to just say that my time 
is about to expire--excuse me for interrupting again--but we 
know that the arguments are the same. We have got to bring the 
Colombian agreement, along with the Panama agreement and the 
Korean agreement. Hopefully, looking for that July 1st. And 
there is no reason, really, to delay any further. I yield back.
    Chairman BRADY. Thank you. Mr. Herger is recognized.
    Mr. HERGER. Thank you, Mr. Chairman. Ambassador Sapiro, you 
stated in your testimony that the Obama Administration shares 
our sense of urgency to advance the Colombia free trade 
agreement and that ``it is this sense of urgency that we are 
bringing to our intensified efforts to resolve outstanding 
    I must say that I am, frankly, disappointed that it took 
the Administration over two years to develop this newfound 
sense of urgency, since the Administration has been saying all 
along, starting with the President's first trade agenda in 
2009, that it was in the process of developing a plan of action 
and establishing benchmarks for progress on Colombia.
    Yet all this time we have been waiting for this leadership 
from the Administration. We have seen our agricultural exports 
to Colombia plummet as the Mercosur agreement went into effect, 
and watched Argentina's share of the Colombian market climb 
from 7 percent to 30 percent, taking away exports from American 
farmers and ranchers.
    The Administration has made clear that it wants to see the 
agreement passed by Congress by July 1, demonstrating a sense 
of urgency because that is the date of implementation of the 
EU-Korea free trade agreement, which the Administration 
recognizes as a threat to U.S. exports.
    Yet there has been no sense of urgency demonstrated by the 
Administration to Colombia, despite the fact that we are 
already facing the competitive disadvantage in that market, 
which will only worsen as Canada, one of our strong 
competitors, will implement a new free trade agreement with 
Colombia on the exact same date, July 1st. This will further 
decimate our agricultural exports to what has traditionally 
been our number one agricultural market in Latin America.
    Ambassador SAPIRO, I hope that this new sense of urgency 
you are expressing turns out to be more than the rhetoric 
coming out of the Administration in the last two years, because 
Americans deserve better. They deserve action on this important 
agreement, and all the benefits to our economy that comes with 
    Now, Secretary Hormats, in your testimony, you state that 
the agreement with Colombia will consolidate and strengthen 
Colombia's gains in such areas as human rights, the rule of 
law, and labor rights reforms. Would you expand on how the 
implementation of the Colombia FTA will help the U.S. further 
engage Colombia in these areas, and build on the progress that 
has been made thus far, Mr. Hormats?
    Mr. HORMATS. Well, yes. Very briefly, I think that the kind 
of points that Ambassador Sapiro was making in her testimony 
and in her comments to the committee underscore the fact that 
we are asking for a number of measures in the areas that you 
have just described that will be included in the agreement. And 
we cannot go into detail at this point, because it is under 
negotiation. But the fact is that, by including particularly 
important areas in the agreement that she is working on, it 
will help to consolidate the progress that is already made.
    Moreover, to the extent that we can strengthen ties between 
our two countries, it will strengthen the dialogue between 
Washington and Bogota. And we have a number of ongoing 
discussions with the Colombians on a variety of issues, human 
rights being one of them, and a number of the others, as well. 
So, to the extent a good agreement can be reached, it will, 
within the agreement, contain areas that will help them to 
consolidate their gains. But it will also strengthen the 
relationship which will broaden the dialogue about the kind of 
issues that you and others are concerned about.
    So, it is a double benefit within the agreement and also 
strengthening the dialogue in a broader sense.
    Mr. HERGER. Well, Mr. Ambassador [sic] and Mr. Secretary, 
let me express to you the overwhelming frustration that the 
constituents I represent--which is one of the largest 
agricultural areas in the world, the northern Sacramento 
Valley--have with--that we have fallen from number one exporter 
to number two, because this agreement has not gone through. And 
I yield back.
    Chairman BRADY. Thank you, Gentleman. Mr. Smith is 
    Mr. SMITH. Thank you, Mr. Chairman, and thank you to our 
witnesses today. You may already know that this week is 
National Agriculture Week. And a lot of my constituents in 
rural Nebraska are very anxious to see this trade agreement 
    Ambassador SAPIRO, I understand that Colombia maintains 
what is known as a price band system, which imposes additional 
duties on top of the regular tariffs on U.S. ag imports, based 
on price. Could you tell us if the Colombia agreement addresses 
this barrier?
    Ambassador SAPIRO. I can tell you, Congressman, that the 
agreement would reduce a great deal of both tariff and non-
tariff barriers. I am happy to look into that specific 
question. I know that the agreement, once in force, will 
provide great relief to our farmers, our ranchers, as well as 
our manufacturers and our service providers.
    I would also like to say that it is--we do share the sense 
of urgency behind your question, and that is precisely why we 
are working so intensively and so thoughtfully to address the 
serious concerns that we have identified in the right way, and 
to be able to move ahead as soon as we have done so.
    Mr. SMITH. Okay, thank you. And I appreciate your getting 
back to me. If you could perhaps advise what I should tell 
constituents when they inquire what a time line is, can you 
give us any sort of a time line?
    Ambassador SAPIRO. Let me go back to last summer, when we 
started working intensively on the Korea agreement, and we were 
able, through hard work, close consultation with Congress and 
our stakeholders, particularly those with a vested interest in 
that agreement, to improve the agreement, and to be able to 
advance it in a way that is very consistent with American 
interests and American values.
    We are working very, very hard with that same template in 
mind to approach this issue, so that the serious concerns that 
we have on the labor code, to be able to ensure that the labor 
laws and their enforcement protect and promote worker rights, 
so that they are not undermined, and they are not denied, that 
we can reach those goals together, so we are working quickly 
    And, as I mentioned, we are going to be fortunate to resume 
our high-level discussions with senior officials from the 
Santos Government when we conclude our testimony here today. To 
show you just how concerned we are, and that we do share the 
sense of urgency, we are working rapidly in a thoughtful way in 
the right direction.
    Given the fact that we share common goals--it is clear to 
me that we do share common goals with the Santos 
Administration. Under Secretary Hormats indicated they are 
already doing a lot on their own initiative to address the 
labor concerns, as well as broader human rights concerns. So I 
am confident that we will be able to report back to you in the 
near future on progress.
    Mr. SMITH. Okay. Would you agree that perhaps our ag 
producers, among other producers here in our country, remain at 
a competitive disadvantage, as long as the agreement 
    Ambassador SAPIRO. We do not want to see any export 
opportunity or any job left on the table.
    Mr. SMITH. Yes.
    Ambassador SAPIRO. So we will work very hard to ensure that 
that does not happen.
    Mr. SMITH. Thank you very much. I yield back the balance of 
my time.
    Chairman BRADY. Thank you. The chair recognizes Ms. 
    Ms. JENKINS. Thank you, Mr. Chair, and thank you all for 
joining us.
    Ambassador SAPIRO, with near six-and-a-half million cattle 
on ranches and in feed yards in my home state of Kansas, we 
rank second in the nation in beef production. At home, the 
cattle outnumber the people by more than two-to-one. And the 
beef industry generated more than $5.5 billion in cash receipts 
in 2009. And with all due respect to the chairman, I think in 
Kansas we have the best beef in the world, we just cannot eat 
it all ourselves.
    There is no doubt that lowering Colombian tariffs on U.S. 
agriculture products will greatly help our farmers and 
ranchers. However, the Colombian agreement would also address 
sanitary and phytosanitary barriers to agriculture trade. So it 
appears that this will make it easier to sell Kansas beef to 
our friends in Colombia.
    But could you please explain for us, first, how the 
agreement addresses these barriers, and second, how resolving 
these barriers in other agreements have helped America's 
farmers and ranchers? And then, finally, do you expect similar 
results in this case?
    Ambassador SAPIRO. Thank you, Congresswoman. The simple 
answer is yes. We are confident that this agreement will be of 
great value to our farmers and our ranchers. It does address 
SPS issues. It does address the tariff question.
    And just as our other trade agreements have benefitted U.S. 
exporters across the board, including agricultural commodities, 
and especially beef, we do believe that this agreement, once it 
is in force--in other words, once we have been able to address 
the issues that I outlined earlier, and--we will be able to 
present it to you immediately thereafter, and look forward to 
your positive consideration of it.
    Ms. JENKINS. Okay. Thank you, Mr. Chairman. I would yield 
    Chairman BRADY. Thank you. The Chair recognizes Mr. 
    Mr. CROWLEY. Thank you, Mr. Chairman, and Happy Saint 
Patrick's Day to you, my friend from Texas. No Saint Patrick's 
Day back to me?
    Chairman BRADY. Absolutely.
    Mr. CROWLEY. Thank you very much. I was, like, a little 
concerned here.
    Chairman BRADY. Singing out of my heart, Mr. Crowley.
    Mr. CROWLEY. What has happened to comedy around here?
    Mr. CROWLEY. Let me thank you, the witnesses, for being 
here today.
    Let me just go back to what my friend and colleague, Mr. 
Reichert, was alluding to. Ambassador Sapiro, is it--the 
language is virtually the same, in terms of the agreement 
between the U.S. and Colombia and the U.S. and Korea as it 
pertains to labor, human rights, and the environment. Correct?
    Ambassador SAPIRO. I----
    Mr. CROWLEY. The language.
    Ambassador SAPIRO. I have not done a side comparison.
    Mr. CROWLEY. Virtually.
    Ambassador SAPIRO. But I believe that they are similar.
    Mr. CROWLEY. But the real question here is whether or not 
the parties have met the standards of the agreement, in terms 
of labor.
    I point that out because the ILO has indicated on a recent 
mission to Colombia the need for the Colombians to still 
address the issue of reforms, as it pertains to the abuse of 
cooperatives, as well as the use of collective pacts to 
prevent, in essence, the ability of workers to organize within 
    Is that correct, in terms of what the ILO is saying? Not 
what you are saying, what the ILO is saying. Is that correct?
    Ambassador SAPIRO. I know that there are concerns regarding 
the situation in Colombia, in terms of the enforcement and the 
full protection of worker rights. And those concerns include 
ways to avoid creating a direct employment relationship. Those 
are concerns that we have, and that I know the Colombian 
Government shares. And they are looking at different ways to 
address them in a concrete way----
    Mr. CROWLEY. So would you agree that there is a difference 
between the standards that are set within the agreement and 
maybe the country's having fulfilled those standards?
    Ambassador SAPIRO. There are certainly different situations 
on the ground in both countries. With respect to Colombia, we 
do have serious concerns about the question of worker rights 
and their full enforcement, the question of violence against 
workers for exercising those rights, and the question of 
impunity, and the importance to punish those perpetrators of 
such violence. We did not have those concerns with respect to--
    Mr. CROWLEY. Korea.
    Ambassador SAPIRO.--Korea.
    Mr. CROWLEY. I thank you for your comments on that, just to 
clarify that point of my friend, Mr. Reichert.
    Given that the Korean agreement is completed, and there is 
some level of concern that we are waiting too long to move, 
could this disadvantage--for either one of you--could this 
disadvantage our service industries?
    And I am interested to hear, because I hear a lot from my 
friends on the other side of the aisle about the need for speed 
on two deals which we are still working on which have not yet 
fully been completed by this Administration, make the argument 
that the former Administration had finished the deal. The new 
president and our new Administration are still working on these 
deals. And while I do have some sympathy, and I do have--Kevin, 
you know this sympathy that I have about these concerns--I 
think we have also lost the sense of urgency about Korea.
    And I just want to point out on beef and cattle, my in-laws 
are from Montana. And I would only question whether or not the 
beef in Montana may be a little bit better than the beef from 
Kansas. But having said that, under this provision with Korea, 
775 million, compared to 12.5 million with Colombia, the 
difference is in terms of the scale of these agreements.
    I mean it has been compared that the Korean deal is 10 
times the Colombia deal. Is there some concern here, in terms 
of--I mean you talk about the impact of waiting. Are you 
concerned that Korea is being held hostage by Colombia at this 
point? Is there any concern here by either one of you?
    Ambassador SAPIRO. We notified the full committee earlier 
this week that we are ready to proceed to discuss the 
implementing legislation for Korea. We worked very hard last 
year to improve the Korea agreement, to make sure that it met 
U.S. interests. And it does. And so we are indeed ready, 
Congressman, to move on that agreement as soon as the committee 
can schedule a session.
    Mr. CROWLEY. Well, I thank you very much, and I yield back 
the balance of my time.
    Chairman BRADY. Thanks to my Irish friend. And let me weigh 
in that Texas beef, indeed, is the greatest in the world.
    Mr. CROWLEY. I have a beef with that.
    Chairman BRADY. It actually makes you smarter and better 
    Chairman BRADY. Let me just say that for the record.
    Mr. CROWLEY. And since I am looking more and more like you, 
I tend to agree with you.
    Chairman BRADY. I may need to eat more.
    Mr. Buchanan is recognized.
    Mr. BUCHANAN. Thank you, Mr. Chairman. Ambassador, I wanted 
just to--being a Member here for four years, and many of my 
colleagues have been here four years or less--but being here 
for four years--and the gentleman said the need for speed--this 
has been an issue that we have been dealing with for four 
years. Where is the good faith negotiation?
    I represent Florida, happen to be the only member of Ways 
and Means in Florida. This is a big issue to Florida. And it is 
just--it just seems like a complete lack of good faith, in 
terms of its negotiation. It is one hoop after another, moving 
the goal post constantly. I have been in business for 30-some 
years. At some point, just--if you are not going to do it, tell 
me you are not going to do it, and we will give the business to 
    But the bottom line, enough is enough. It has just gone on 
way too long. And I think the gentleman mentioned--the 
Secretary mentioned $15 billion in exports. Is that right, 
Secretary, is that what you mentioned, the U.S. exports into 
    Mr. HORMATS. Something like that, yes.
    Mr. BUCHANAN. Yes. So I am looking at what has been the 
lost opportunities, the lost jobs in the U.S., and what is the 
lost opportunities going forward if we do not deal with this?
    Because you have other countries--you mentioned you are 
losing market share--but after four years, if we do not get 
this done, in my opinion, in the next three or four months, you 
end up in the political season after the summer. It is not 
going to get done. And there is always issues for not doing a 
    I mean, again, if we do not want to do the deal, the 
Administration or someone else, then we should just tell our 
friends in Colombia that we do not want to do the deal.
    So I guess I bring that up to you in my frustration, what I 
hear from constituents all over Florida. Enough is enough. That 
is why we are trying to get a time line on this. I am excited 
about Korea, but we would like to see these other trade 
agreements get done.
    And I will say just the same thing about Panama. It has 
just gone on and on and on.
    So, I guess I would like to ask the Secretary, was that 
your number, the $15 billion? I think that was what you quoted, 
that exports--we export into Colombia. Is that your figure?
    Mr. HORMATS. I will check----
    Mr. BUCHANAN. I think that was in your opening statement.
    Mr. HORMATS. $12 billion.
    Mr. BUCHANAN. $12 billion.
    Mr. HORMATS. Colombia bought $12 billion in U.S. goods.
    Mr. BUCHANAN. Do you have any estimate of what, in the last 
four years we have been negotiating this and not having an 
agreement, what does that cost us in exports? Or maybe, going 
forward, what is this going to cost us as China and other folks 
are coming in there and----
    Mr. HORMATS. I do not have a precise estimate on that. It 
would be hard to make an estimate----
    Mr. BUCHANAN. Do you have some thoughts on it?
    Mr. HORMATS [continuing]. that would be credible. Well, let 
me just make one broad point in answer to the point you have 
made on this, and that is I have worked for Republican 
administrations and Democratic administrations. And I am a 
strong believer--as I mentioned in my testimony--in the 
strategic importance of our relationship with Colombia for a 
variety of reasons that I have indicated.
    And I just want to say that I have had a chance to work 
very closely with Ambassador Sapiro, Ambassador Kirk, and the 
people who are working on this. And I can assure you they are 
working very hard, as expeditiously as possible, to make real 
progress on this, because they regard it as important, as well.
    And I understand the points that have been made about the 
past. But if we are talking about the present, and we are 
talking about the level of commitment, and we are talking about 
the level of expedition that is going in to fulfilling this 
commitment, they are working very, very hard to come up with 
something that serves the interests of the American people, 
that is a good agreement, and that can be done as quickly as 
possible, bearing in mind the kind of results that Ambassador 
Sapiro and Ambassador Kirk have indicated.
    And I can assure you this is given enormously high priority 
at all levels of the Administration, and they are working very 
expeditiously. When she gets out of this meeting she is going 
to meet with Colombians right away. These are senior, credible 
Colombians. There will be a very senior----
    Mr. BUCHANAN. Mr. Secretary, let me just--I want to--
because we got a limited time--what--how long, best to your 
knowledge, have we been working on this agreement?
    Mr. HORMATS. We have been working----
    Mr. BUCHANAN. I mean when did this agreement--and it is not 
just this Administration. A couple of years, but--I mean, how 
many years--because I remember in the last two years of the 
Bush administration, there must have been 50 Members of 
Congress that went down to Colombia in a good faith effort to 
try to get something done. Have we been working on this for six 
years? I have been here four, and I know it has been front and 
center for four years. I mean how long does something like this 
take? I think they are good partners. There is a lot of issues. 
We need to do something about it.
    Ambassador SAPIRO. Congressman.
    Chairman BRADY. All time has expired in this witness, and I 
would encourage you to answer in writing, if you would.
    Mr. HORMATS. Thank you.
    Chairman BRADY. Thank you. The Chair recognizes Mr. Kind.
    Mr. KIND. Thank you, Mr. Chairman. And I want to thank you 
for holding this hearing today. I think it is very important 
that we, as a committee, explore what remaining obstacles 
remain to move these three bilaterals forward. But, obviously, 
the focus is on Colombia today.
    Madam Ambassador and Mr. Secretary, I want to thank you for 
the intense focus that you have placed on this issue.
    Obviously, if we are going to meet the President's goal of 
doubling exports in the next five years, these bilaterals are 
going to be an important step to achieving that. And they are 
important in their own right for geopolitical considerations, 
for economic considerations. I mean we are celebrating National 
Agriculture Week back home in Wisconsin this week.
    And I am just looking at some of the analysis done with 
South Korea: 6.5 billion in additional ag exports to the South 
Korean market, when we can finalize that agreement. And we are 
looking at roughly 2.2 billion, just in the Colombia market 
alone. That is nothing to sneeze at.
    But, having said that, there are some legitimate concerns 
that are ongoing with Colombia. I commend the Obama 
Administration for hitting the pause button when it related to 
South Korea, because I thought there was a better deal to be 
had. And, quite frankly, given the additional time that they 
went and negotiated some of the remaining items dealing with 
auto, making progress on beef, we were able to achieve a better 
deal with South Korea, one that I think will garner greater 
bipartisan support now in congress, once it is submitted for 
our consideration.
    But in Colombia specifically, there are still some 
lingering concerns about worker rights and the violence against 
labor in that country. The previous Administration, either they 
chose to ignore it or didn't press this issue, but I am glad to 
see that this Administration has renewed focus on that.
    And the question I have for you now--and to help us analyze 
whether progress is being made on that--are the obstacles in 
Colombia that many people are raising in regards to the ILO, 
worker rights, the violence against labor, in particular, is it 
a question of will in the country, or is it a question of 
institutional capacity or capability of doing something 
significant to crack down on some of these measures? Maybe we 
can start with you, Madam Ambassador.
    Ambassador SAPIRO. Thank you, Congressman. I think those 
questions are related. We have a terrific opportunity here. 
Since the Santos Administration came in last August, they have 
been clear about their own commitment to making progress.
    In our discussions with them over the last couple of months 
more publicly, and I would say before that more privately, they 
have made clear that they want to address these concerns. They 
share our goals. And so, we are now in the process of 
determining what specific concrete initiatives could be clear 
indication that these issues are being and will be addressed.
    Just as we took the time last year to get the Korea right, 
with a lot of support from Chairman Camp, Ranking Member Levin, 
and many others, we are taking the time to get this right. But 
we share the sense of urgency that we have heard from all of 
you. And so we are doing it expeditiously, we are doing it 
intensively, we are doing it thoughtfully. We want to be in a 
position where we can advance this agreement; I am optimistic 
that we will get there, and we will get there in the near 
future with your continued support from all of you.
    Mr. KIND. Let me ask you--and to get back to my friend from 
Florida's concern in regards to moving the goal post sense that 
some folks have around here--is there a way that we can proceed 
with the agreement with Colombia by establishing some metrics 
that will not end just at the signing of the agreement, but 
will require or call for a remaining engagement on our part to 
help them with the institution-building or the capacity in 
order to make progress, especially in the area of the ILO 
provisions and worker rights in that country?
    Ambassador SAPIRO. I would add that it is good indication 
of the Santos Administration's commitment to these questions 
that it has invited the ILO back into Colombia. I think that is 
a very positive step--again, one of many that they are taking, 
and one of many reasons why we see eye to eye, and it is truly 
a joint partnership, in terms of addressing these serious 
problems, so that we can immediately thereafter advance this 
agreement to you for your consideration.
    We do share the sense of urgency that has been expressed 
here today.
    Mr. KIND. Mr. Secretary, let me ask you. Has there been a 
sense of moving of the goal posts in our negotiations with 
Colombia, or have we been up front with them from the 
beginning, as far as what we are hoping to see in any final 
    Mr. HORMATS. I think the Administration and USTR have 
clearly laid out a number of very specific points. I think the 
Colombians are very clear on those points, and the points that 
we have laid out are under discussion as we speak. And I think 
there is a lot of clarity in this current environment that 
enables us and the Colombians to focus on the same issues, and 
to make progress on those issues.
    A lot of work went into making sure that there was clarity. 
There were interagency meetings to discuss this, to be sure 
that we were giving clear signals to them, and that we were 
getting clear signals from them. And I think that has proved to 
be the basis for the kind of potential for progress that 
Ambassador Sapiro has laid out.
    And let me also address, while I am speaking, the 
agricultural issue. You know, the people of Chico and the 
people of Nebraska, and many other parts of the country, I 
think do have a very strong interest in the agricultural 
aspects of this agreement. And those are one of the very 
important elements that USTR is pursuing. And that will, to the 
extent that they can make progress in the areas that they are 
now working on, will be very beneficial to the kinds of 
constituencies that you represent.
    So, we look at this as a broad agreement that has a lot of 
things in it. And we have met--I have met, Ambassador Sapiro 
has met, Ambassador Kirk has met--with representatives of the 
farm community----
    Chairman BRADY. Thank you, Mr. Secretary.
    Mr. HORMATS [continuing]. And we understand these points 
very well, and the interest----
    Chairman BRADY. Thank you, Under Secretary. Appreciate it. 
Mr. Schock is recognized.
    Mr. SCHOCK. Thank you, Mr. Chairman. Well, there seems to 
be some confusion over the amount of clarity. So let me review 
some history.
    Last June at the G-20 summit in Toronto, the President 
announced his intention to resolve the outstanding issues with 
the South Korea trade agreement by the time the G-20 met in 
Seoul less than 6 months later. The Administration promptly 
identified a finite set of issues that were made public: 
improved market access for U.S. exports of autos and beef, and 
a clear and achievable time frame.
    In setting the deadline, the Administration did not say 
that it would conclude the deal on that date, no matter what. 
Instead, the Administration took an extra couple of weeks to, 
in their words, ``cut the right deal.''
    I think that was the right approach. And I commend them for 
being open and transparent about it. We should not be afraid of 
deadlines. In fact, they are action-forcing events. And they do 
not give away our leverage, as evidenced by the South Korean 
agreement. The Administration used a deadline and an action 
plan successfully in the Korea deal. I believe we need this 
type of leadership now for the Colombia agreement.
    Yet, despite committing, as was evidenced by the remarks by 
my colleagues to ``established benchmarks for progress,'' as 
the Administration has said more than two years ago, the 
Administration still has not identified clear and definite 
issues, and also identified an achievable time line for 
    It is clear, however, we must recognize that the President 
can lead on trade when he wants to.
    So, my first question would be: When will the President lay 
out a specific time table, specific action steps, as he did 
successfully to achieve an agreement with South Korea, but this 
time with Colombia? Ambassador.
    Ambassador SAPIRO. Thank you, Congressman, for that 
question. We have laid out very clear concerns that we have. 
With respect to the labor code, we want to ensure that those 
labor laws are fully protecting worker rights and implementing 
those rights. With respect to violence, we want to ensure that 
the government is taking adequate steps to prevent violence 
against those Colombians seeking to exercise their worker 
rights. And on the question of impunity from justice, we want 
to ensure that sufficient efforts are being made to prosecute 
perpetrators of such violence.
    These are very clear goals. We are happy that the Colombian 
Government shares them and understands the seriousness of them. 
We are not moving any goal posts. These have been our 
consistent goals.
    We now have, I think, a unique opportunity, because the 
Santos Administration is so dedicated to working with us to 
achieve these goals, to lay down more specific actions. We are 
working with them intensively, possibly around the clock over 
the next few days, to be able to reach that kind of consensus 
on initiatives that they are either already taking, but may not 
be publicizing as they are working on them, or----
    Mr. SCHOCK. Ambassador, forgive me for interrupting.
    Ambassador SAPIRO. Certainly.
    Mr. SCHOCK. I appreciate what you are saying, and I 
genuinely trust what you are saying to be true. The problem for 
us is that when we hear, ``in the matter of a couple of days, 
reaching consensus,'' I don't know whether that means 
conclusion. Is consensus resolution to those issues? And, more 
importantly, what is the date? What is the time frame?
    I mean the Administration did not dodge the question, was 
not shy about laying out a time frame and a date certain by 
which they were going to reach the deal with South Korea. What 
is the apprehension with Colombia?
    Ambassador SAPIRO. There is no apprehension. We are 
    Mr. SCHOCK. But why don't we have a date certain? Why don't 
we say, ``By the end of April, our goal is to bring--is to have 
resolution on this agreement?''
    Ambassador SAPIRO. What I can say, with definiteness, is 
that we are working very hard, we have been, intensively, 
rapidly, and thoughtfully, to address these concerns with the 
Colombian Government. These are sensitive issues. These are 
complex issues. These are not the kind of issues that lend 
themselves, in my view, to a deadline.
    I share your sense of urgency. We all do. That is why we 
are working so intensively.
    Chairman BRADY. Thank you, Ambassador.
    Ambassador SAPIRO. But I cannot say if it would be a few 
days or longer. I can promise to work very hard to report back 
to you soon.
    Chairman BRADY. Thank you. Time has expired. I want to 
thank the witnesses for their excellent testimony and thank the 
Members for their thoughtful questions.
    Clearly, closing out the remaining issues on Colombia and 
Panama, presenting them for congressional consideration by July 
1st is crucial. And I still see no reason, since the texts on 
all three are done, that we cannot start technical discussions 
on them to continue this pace, moving forward.
    I want to thank you both very much for being here today.
    Mr. HORMATS. Thank you, Mr. Chairman.
    Chairman BRADY. Thank you.
    Ambassador SAPIRO. Thank you, and Happy Saint Patrick's 
    Chairman BRADY. Same to you. And I did notice the green on 
you, Ambassador Sapiro.
    Ambassador SAPIRO. Subtle.
    Chairman BRADY. There is a hint of it.
    I would like to welcome our second panel to step forward at 
this time. Today we are joined by five witnesses. Our first 
witness will be the Honorable Thomas Dorr, president and chief 
executive officer of the U.S. Grains Council, formerly the 
under secretary for rural development at the U.S. Department of 
    We will then hear from William Marsh, who is vice president 
of legal for the western hemisphere, Baker Hughes. He is also 
testifying on behalf of the National Association of 
    Our third witness will be Ambassador Peter Romero, 
currently president and CEO of Experior Advisory LLC, and 
formerly our ambassador to Ecuador and assistant secretary for 
western hemisphere affairs at the Department of State.
    Fourth, we will hear from Adam Isaacson, director of the 
regional security policy program at the Washington office on 
Latin America.
    And we will conclude with General Barry McCaffrey, who is 
currently president of BR McCaffrey Associates, and formerly 
director of the office of national drug control policy and 
commander of the U.S. Southern Command.
    We welcome all of you, and look forward to your testimony. 
I would also ask that their witnesses keep their testimony to 
five minutes.
    Mr. DORR, good to see you.


    Mr. DORR. Thank you, Chairman Brady, Ranking Member 
McDermott, and distinguished Members of the Subcommittee on 
Trade. My name is Thomas Dorr. I am president and CEO of the 
U.S. Grains Council. The U.S. Grains Council appreciates the 
efforts of the subcommittee in holding hearings regarding the 
importance of ratifying the pending free trade agreements with 
Colombia, Panama, and South Korea. I will confine my remarks to 
the significant challenges we face in Colombia.
    Colombia is a strategic market with economic growth 
projected to exceed four percent annually over the next five 
years. Colombia's per capita income is projected to increase 
from $9,000 to nearly $12,000 by 2015, and this income growth 
will result in substantive increased consumption of animal 
    While Colombia is a net exporter of agricultural 
commodities, it imports over 80 percent of the corn it uses 
domestically. It imports over 95 percent of the wheat and 
soybean products it consumes. In 2008, total U.S. agriculture 
exports to Colombia reached 50 percent market share, and 
exceeded $1.6 billion.
    Since 2008, U.S. market share has declined rapidly to only 
21 percent, or approximately 800 million. For U.S. coarse 
grains, the decline has been more dramatic. In 2008, U.S. 
agricultural exports of coarse grains approached $635 million, 
and accounted for 83 percent of the total Colombian coarse 
grains import. By 2010, U.S. coarse grain exports had declined 
to $118 million, and market share fell to 18 percent.
    Conversely, in 2008, Argentina held just an 11 percent 
share of coarse grain imports, primarily corn. By 2010, 
Argentina's market share was 66 percent. Over the same time 
period, Brazil's market share of coarse grain imports to 
Colombia increased from 5 to 16 percent.
    Colombia protects its local production with common external 
duty of 15 percent. This includes corn and other agricultural 
commodities. Colombia is also member to the Mercosur Andean 
community agreement. This agreement includes a price band 
mechanism that levies additional duties. Colombia's trade 
agreement with Mercosur allows member countries to receive a 
preferential duty.
    Argentina and Brazil receive an annual duty reduction on 
corn imports to Colombia, which completely phases out the basic 
duty by 2018. Beginning in 2006, the duty preference granted 
Brazil and Argentinian corn provided a nearly 5 percent 
advantage over corn imports from the U.S. In 2011, the duty 
preference of 6 percent will give a 9 percent advantage over 
U.S. corn imports. And this approximates a $20-a-ton advantage.
    Even with these duty preferences, the U.S. remained 
competitive until 2008, due in large part to our close 
proximity to Colombia. However, the increased duty preference 
to corn imports for Mercosur has virtually eliminated this 
    Equally disconcerting as the grain flow to Colombia shifts 
from the U.S. to Brazil and Argentina, their shipments to 
Colombia now include tonnages of corn over and above those 
required for their Colombian contracts. These added quantities 
are shipped in split shipments to Colombia, and then on to 
Latin American countries such as Panama and the Dominican 
Republic. This has further eroded U.S. market share, despite 
our clear freight advantage.
    Once trade flows become established and relationships are 
formed with other trading partners, it is very difficult to win 
back these markets. The Council has established a strong 
partnership with the Colombian feed, livestock, and poultry 
industries, to build capacity and increase sufficiency 
utilizing U.S. coarse grain products. As a result of these 
ongoing efforts, we have gained their trust as a consistent, 
reliable supplier of quality products. Without ratification of 
the FTA, we will lose this relationship.
    The Colombian feed and livestock industries wish to retain 
and build on this relationship. Representatives of the 
Colombian feed milling, swine, and wheat industries were in 
Washington earlier this year. They provided briefings to this 
committee, the Senate Finance Committee, and both the House and 
Senate Agriculture Committee. Their message was clear. Although 
the U.S. has been a reliable, preferred supplier, Colombia has 
no choice but to import corn and other commodities from 
Argentina and Brazil because of the lower duties. They stated 
that the U.S.-Colombia FTA would allow them the opportunity to 
acquire more U.S. commodities. However, price is paramount, and 
the competition is fierce.
    [The statement of Mr. Dorr follows:]
    Mr. Marsh, you are recognized.


    Mr. MARSH. Thank you. Good morning, Chairman Brady, Ranking Member 
McDermott, members of this subcommittee. I am William Marsh, vice 
president legal, western hemisphere, for Baker Hughes Incorporated. I 
am pleased to testify today as a member of the National Association of 
Manufacturers. I have been practicing law for 22 years, with 13 years 
exclusively in the oil and gas industry, and substantial experience 
working in Latin America, including Colombia.
    Hughes Baker is a top-tier oil field service company with a 
century-long track record. We deliver technology solutions that help 
oil and gas operators maximize their reservoirs through high-
performance drilling and evaluation, completions and productions, 
fluids and chemicals, and reservoir analysis. We work side by side with 
our customers to engineer reliable, application-specific products and 
    While we operate globally, Baker Hughes is headquartered in 
Houston, Texas, and is a United States employer and manufacturer. We 
have a diverse workforce of more than 21,000 highly skilled 
professionals in science, engineering, manufacturing, and operations 
support in the United States, and we are located in 28 states.
    In addition to providing services globally, Baker Hughes 
manufactures products in the United States, like pumps, motors, and 
valves, and exports them to countries worldwide, including Colombia. 
Roughly 75 percent of Baker Hughes Colombia's total global imports are 
from Baker Hughes facilities in the United States. We employ 450 
workers in our Colombian operations, and Baker Hughes offers a 
multitude of products and services in Colombia, ranging from reservoir 
development services, to intelligent production systems, to integrated 
    As you have heard today, the U.S.-Colombia trade promotion 
agreement will replace a one-way preferential agreement with one that 
is mutually beneficial and reciprocal. Because of trade preferences, 
Colombia's exports have been entering the United States duty free, 
though that has been temporarily.
    By contrast, Colombia's average duty on our imports from the United 
States averages 5 percent, with some tariff peaks at 10 to 20 percent. 
Eliminating that duty would allow Baker Hughes to more effectively 
compete in Colombia, increase our exports to serve Colombia's expanded 
plans for oil and gas projects, and create more highly-skilled jobs 
here at home.
    Colombia is a significant market for the United States, second only 
to Brazil and South America. The United States exports to Colombia 
exceeded $12 billion in 2010, and over 90 percent of that total was in 
manufactured goods. According to the United States Department of 
Commerce, those exports supported nearly 90,000 United States jobs and 
10,000 U.S. small and medium-sized businesses.
    More specifically, Colombia is a major prospect for new oil and gas 
development. According to media reports, the Colombian Government plans 
to increase oil production up to one million barrels per day by the end 
of 2012, and activity is likely to remain high for the next decade. As 
a market leader in oil-field services, Baker Hughes intends to be a 
substantial part of that market. The United States trade policy should 
facilitate our participation in that responsible development.
    From a security perspective, there are advantages to developing 
western hemisphere energy sources like those in Colombia. Colombia is 
considered a U.S. ally with a relatively stable government and economy. 
Oil and gas from Colombia could displace oil from less secure foreign 
sources of supply.
    Helping Colombia maintain a strong economy is also in our national 
interest. Therefore, adopting this reciprocal treaty is a win for both 
countries. Thank you.
    [The statement of Mr. Marsh follows:]
    Under Secretary Romero?


    Mr. ROMERO. Thank you, Mr. Chairman, and thank you for the 
promotion. I was assistant secretary and retired a couple years ago, 
    Chairman BRADY. It is Saint Patrick's Day, we are doing----
    Mr. ROMERO. Thank you. Mr. Chairman, thank you for the invitation, 
ranking senior Member and others, thank you for the invitation.
    I think I would like to start out with some good news. And the good 
news is that, through almost 10 years of U.S. investment in Colombia, 
that investment, through Plan Colombia and other support, is paying 
off. Colombia is more democratic, it is safer, it has got a 
strengthened rule of law, it is more prosperous. And, according to most 
of your surveys, is the second most business-friendly country, after 
Chile, in the hemisphere.
    The bad news is that, after having spent this taxpayer money, and 
having results that were probably beyond our expectations early on, 
literally the Chinese, the Koreans, the Canadians, and the European 
Unions are the ones that are cashing in on this. This, at a moment when 
the Chinese--and there has been a lot of discussion about the Chinese 
and their investment in Latin America--but it has gone up tenfold over 
the last couple of years. Their FDI over the period has increased to 17 
percent of all Chinese FDI. And, at the same time, the U.S. share of 
all exports to the region fell from 48 percent to 37 percent. We are 
losing ground, Mr. Chairman.
    If these numbers are not bad enough, the other downside is that 
when the Chinese cut deals in Latin America, they do not particularly 
care about the rule of law. They do not particularly care about human 
rights, labor rights, and foreign corrupt practices, or the 
environment. And that is basically what is happening, in terms of the 
reality of Latin America. Certainly the sanctity of their contracts is 
important to them. But the rest of it really is of little or no 
importance when it comes to political or ethical practices.
    I think it is useful to just take a minute to go back to where we 
were in the year 2000, when we started Plan Colombia. Colombia was on 
the verge of ceding swatches of its country to bad guys: 
paramilitaries, gangs, narcos, guerillas, you name it. You could not 
travel from one city to the other without taking an airplane. The line 
around the consulate to leave, to get visas to come to the United 
States to leave, went around the block. You could not get a visa 
interview for six months.
    This has changed dramatically. President Uribe first turned it 
around. President Santos is continuing it through his process of 
democratic security, which is empowerment at the local level. This has 
worked, this whole of government approach has worked so well, that we 
have versions of it going on in Afghanistan and Iraq today. We have put 
a lot of stock behind using it, okay? So it has worked. Colombia is not 
perfect. It is not Sweden. It will not be, for some time to come.
    I have spent 35 years, both in the public sector and the private 
sector, railing against the double standard towards Latin America. 
Latin America has a different set of standards that we apply, with 
respect to foreign policy, than we do the rest of the world. There is 
not one person in this room that has talked about our negotiations with 
Vietnam, that has a history of repression against labor and organized 
labor in that country, and yet that is not even a discussion. And in 
Colombia, Colombia has to wait for five years, even to get a response.
    I would also argue with the Administration that was here. Colombia 
has not gotten clear guidelines, in terms of what would satisfy the 
U.S. Government, in terms of whatever change to the laws and reform, 
that the Administration appeared to suggest when they were here.
    Just a few words on labor. Mr. Chairman, I belong to four labor 
unions in my professional life. I joined them gladly. I was a teacher 
for a number of years. A lot of the labor issues that are of concern to 
this committee are, indeed, legitimate issues. But there has been a 
significant improvement across the board, whether it be assassinations 
of labor leaders or organizers or even members out in the field, there 
has been labor reform. There is a robust dialogue at the national and 
local level labor reform which puts management and labor continually 
    There have been increasing reforms and efforts to address this 
issue, including special prosecutors and $13 million spent last year to 
protect labor leaders and labor organizers and labor members in the 
field. Colombians have done their part.
    [The statement of Mr. Romero follows:]
    Mr. ROMERO. Thank you.
    Chairman BRADY. Mr. Isaacson.


    Mr. ISAACSON. Chairman Brady, Ranking Member McDermott, thank you 
for inviting me to participate in this hearing.
    I have a very deep affection for Colombia. I spend most of my adult 
life visiting it. I have been there about 50 times. I have met some of 
the bravest people in the world there, labor leaders high among them. 
And, after all these years, to be honest, I still do not always get it. 
I cannot fathom how you can carry on, day to day, knowing that, at any 
time, you could be murdered because you want to improve your workplace 
or you want to find out who killed your spouse, or you want to recover 
land that was stolen from you. And you know that your killer has no 
reason to fear being sent to prison, and could go on to victimize 
someone else.
    It takes a special person to keep believing in her country, or to 
keep defending his fellow citizens. But Colombia has an amazing number 
of these people. When I ask them how they keep going, it is also 
amazing how often they just sort of shrug their shoulders, as though 
the answer should just be obvious.
    I want my country to be on these people's side. I also want 
Colombia to take off economically, and put its conflict behind it. I 
want the United States to contribute to that through its aid and trade 
policies. That is why my colleagues at the Washington Office on Latin 
America and I believe that, instead of jumping in, we need to work with 
the Colombian Government on some clear, achievable benchmarks for 
progress, and see meaningful results before considering the FTA.
    Over the four-and-a-half years since the FTA was signed, there are 
four areas where this progress has not been sufficient. They are labor 
law, protection, impunity, and land. On labor law, we hope to see 
Colombia align its laws with ILO core labor rights. The FTA itself 
requires this. This means doing away with cooperative trade 
associations, collective pacts, an expansive definition of ``essential 
workers,'' and other obstacles to the right to bargain collectively. 
These labor laws should have to be enforced, too. So Colombia would 
need to increase funding and political backing for the parts of the 
government that are supposed to be doing that.
    Second is protection. It's crucial that there be a sharp drop, 
ideally to zero, in homicides, attacks, and threats against trade 
unionists, human rights defenders, victims' advocates, and Afro-
Colombian and indigenous leaders. Colombia is different from the United 
States' other free trade debates. This time we have signed an agreement 
with a country that is in conflict. Elsewhere, the discussion focused 
on labor laws, wages, and work conditions.
    Those are important. But in Colombia, there is a more immediate 
life-or-death issue. Trade unionists and other people fighting for 
justice continue to be murdered in shockingly high numbers. These 
killings have to stop. This stoppage should result from the 
government's own rapid response to threats when they occur, its 
dismantling of new paramilitary groups who are growing quite quickly 
right now, its protection of the population from the leftist guerillas, 
and its effective investigations and prosecutions of homicides. And 
that last one is important.
    Third, impunity. This is so critical that, in my view, it is the 
chief reason for waiting a bit on the FTA. Colombia has got to get the 
killers behind bars to dissuade future killings. This is where the 
least progress has been made. After four-and-a-half years we have seen 
the impunity rate for labor killers only move from 98 percent to 94 
percent. That is a tragedy. Progress on impunity takes a while to 
measure, but there is no substitute. If you do not address impunity you 
have no guarantee that this will not flare up again.
    So, Colombia needs to sharply increase its prosecutions, 
investigations, and verdicts on labor killings. The same goes for other 
recent abuses, like the 3,000 civilians that the armed forces are 
alleged to have murdered in the past 10 years.
    Finally, the fourth point, land and victims. Land is at the core of 
Colombia's long conflict. The violence has forced more than 5 million--
mostly rural Colombians--from their homes and farms in a country of 45 
million. The FTA must neither lock in this injustice nor knock 
thousands of small farmers out of business. If it does, we could feel 
the consequences right here, as more cocaine coming to the United 
    On land, the government of President Juan Manuel Santos has a plan 
that deserves our support. A land and victims law is nearing final 
approval in Colombia's congress. This is a decent law, but its test 
will be its implementation, not just its passage.
    These four areas I lay out here are not a recipe for a perfect 
society, or a Sweden. These are minimal standards to keep the FTA from 
having unintended consequences that could undermine U.S. interests and 
values. They are reasonable.
    Although I am impressed by the Santos Administration's policy 
proposals, we cannot settle just for promises. A new policy or 
strategy, a new task force or working group or commission, a new 
directive, order, even a new law, these are great. They are welcome. 
But they are no substitute for measurable results. And as we measure 
progress toward these minimal standards, my advice is, to quote Ronald 
Reagan, ``Let us trust, but verify.'' And verifying will take some 
time. That is why we advise engaging Colombia in a constructive 
discussion of how to get this done right, and verifying that meaningful 
progress happens.
    I look forward to your questions, and to discussing this with you 
at any time. Thank you.
    [The statement of Mr. Isaacson follows:]
    General McCaffrey?


    General MCCAFFREY. Mr. Chairman, thank you and Congressman 
McDermott for the opportunity to be here.
    And, by the way, I share the remarks that Adam just made. He had a 
tutorial for me yesterday. I think many of his conclusions are right, 
although I am here to strongly urge passage of the FTA with Colombia 
almost immediately, certainly by this summer.
    I have spent much of my adult life working with the Colombians in 
one aspect or another. I worked with Presidents Pastrana, Uribe, and 
now Santos. I think these issues have been discussed at great length, 
and I would offer a set of facts for you to consider.
    Number one, let us remind ourselves that Colombia is one of the 
most important allies we have, democratic regimes, law-based regimes, 
on the face of the earth. In the 200-year history, much of it has been 
democratically-elected governments.
    Secondly, I would remind us that Colombian National Police, 
arguably one of the best in the Americas, and the Colombian Army, have 
had 5,500 killed in action, and 17,000 wounded since 2002. There was a 
war going on in Colombia, which is largely entering its end phase. 
Thanks to their courage and their determination, Colombia is still 
    Third, drug production is down by 60 percent. It is phenomenal. 
This is a commitment not just by the CNP and the armed forces and the 
political leadership, but also by the Colombian people, who essentially 
do not wish to be involved in criminal activity.
    Fourth, the major security problem in Colombia for the last 25 
years has been the FARC, ELN, and the AUC. They are badly wounded. The 
AUC is largely dismantled, although, as Adam correctly says, many of 
them have gone to criminal activity. The FARC are down about 8,000 
people and 2,500 in ELN.
    The war does go on. There may be as many as 6,000-plus hardened 
criminals in so-called ``buckram'' organizations, and many of them are 
in collusion with the FARC and the ELN. This is now becoming a law 
enforcement issue, and it is also one based correctly, as one of the 
congressmen previously said, on poverty. It is moving into a different 
    The Santos Administration, as I look at them, is--has enormous 
focus on improving governance, reform of the judicial system, which is 
going to be the hardest 20-year task they face, poverty action, drug 
criminal gangs, and refugees. They have got maybe a million internal 
refugees and maybe 400,000 pushed out into Ecuador or Venezuela. But I 
think that is the commitment of the Administration we are looking at in 
Colombia today.
    Finally, I think we ought to take into account the enormous 
reduction of violence in Colombia. It is simply unbelievable. I was 
down there in 2001, just before I left office. There were 2,000 people 
in my security detachment. When I went back again a couple of years 
ago, I had a dozen CNP officers. There were no violent incidents in 
Bogota the week I was there. It is astonishing.
    And, by the way, the most trusted, respected institution in 
Colombia today is the Colombian armed forces, with a 79 percent 
approval rate in the latest poll numbers. Colombian people understood 
their determination, their commitment, their courage, and their change, 
rapid change--I have been listening to the Colombians brief me on 
comprehensive human rights policies and training.
    They are trying to understand how you deal with something that, on 
one hand, was multi-battalion attacks by the FARC, using indirect fire 
weapons systems, and now a war that is changing into one in which these 
young soldiers have to carry two cards, one red, one white--blue, 
excuse me--to understand what nature of violent incident they are now 
confronting, and what the different rules of engagement are. It is a 
magnificent change in the short period of time that I have observed 
    Final one, and a point that I would offer--and a lot of others have 
already addressed this--this is a huge economic problem in the United 
States. We have lost massive amounts of market share in agricultural 
products and other areas.
    And, oh, by the way, the Colombians are now a major energy-
producing nation. Coal number one, oil up to--pushing a million barrels 
a day. And I will bet you in two or three years they out-produce 
    I personally consider the way we have dealt with Colombia an 
embarrassment, a nation that is a democratic regime under the rule of 
law coming out of an era of enormous violence. And I urge congressional 
action in support of the FTA. Thank you, sir.
    [The statement of General McCaffrey follows:]
    Mr. Dorr, your testimony shows exactly how American agriculture is 
being harmed and will be harmed further if we delay this pact.
    Mr. Isaacson, I read your testimony at length last night. And, in 
my view, Colombia is making extraordinary improvement. I agree with 
you, the new Santos Administration is committed to continuing that 
progress. And I agree with you, any violence and any impunity 
associated with that is condemnable. That is why we push so hard to lay 
out these points. We have pushed the Administration to step forward 
with an action plan so that Colombia can address this. Now, the longer 
we are stuck in limbo, unfortunately, I think the less we can lock in 
both the progress and continued improvement.
    Ambassador Romero and General McCaffrey, I am struck both by your 
expertise, sense of experience in the region. Your points about the 
loss of national security and the consequences of our failure to act, I 
think that is an important part of this debate and of this agreement.
    Finally, Mr. Marsh, you talk about the consequences of further 
delay on a company like yours. You mentioned Colombia is a major 
prospect for new oil and gas development, and may more than double its 
oil production in two years. I know the infrastructure effort in 
Colombia is impressive, as well, as they rebuild their ports and their 
airports and roads.
    And I want to ask you--in fact, I would like to ask unanimous 
consent to introduce for the record a paper by the Ways and Means 
Committee outlining the infrastructure opportunities in Colombia that 
could create jobs here in the United States.
    [No response.]
    Chairman BRADY. Without objection.
    [The information follows: Brady Insert]
    So, can you talk about for us, so we understand exactly the 
consequences of delaying this agreement further?
    Mr. MARSH. Certainly you are correct, Chairman Brady. As we bid on 
projects--and these are long-term projects--if we are not able to be 
competitive and win those projects, we lose not only that project, 
which may be a long-term project in and of itself, we lose the 
opportunity to build the infrastructure that goes along with those 
projects, which puts us at a further competitive disadvantage by not 
having that infrastructure to support future projects.
    At the same time, competitors from other countries are developing 
infrastructure because they were successful in bids that we were 
disadvantaged and not successful in obtaining. So it is not just the 
life of the equipment, but it is also building that infrastructure 
within the country that will impact our future work and our ability to 
export from the United States into Colombia in the future, because we 
do not have that infrastructure in-country to support the jobs in the 
    Chairman BRADY. So these are longer-term consequences and losses.
    Mr. MARSH. Absolutely. Not only are our contracts long-term 
contracts, but along with those contracts come infrastructure that we 
will build in-country that will support future contracts.
    Chairman BRADY. Do you believe we should delay any further on this 
    Mr. MARSH. Any further delay continues to put us at a competitive 
disadvantage. So, no, we would not delay any further and we should 
support immediate action with respect to the agreement.
    Chairman BRADY. General McCaffrey, you finished your testimony very 
strongly, saying that this was an embarrassment that we have not moved 
forward on this four years later on a key ally. Do you feel Colombia 
feels that same way, that an ally of that strength in that region--can 
they even understand why their strongest partner would delay an 
agreement for so many years?
    General MCCAFFREY. Well, you know, I would remind all of us the 
media and the political attention of all three of these nations--Korea, 
Panama, and Colombia--is fixed on this hearing today. And so, tonight 
on TV, the Colombian people are going to try to sort out in their mind 
how they can be one of the predominant allies of the United States--
they are working with us now in Mexico, and training people in 
Afghanistan, they are a democratically-elected regime, they produce 
dramatic changes and results, and yet we are diddling them for over 
four years on an economic trade deal.
    I say that recognizing--and I really mean this--that Adam's 
concerns are valid. And yet, in the same note, Pete Romero pointed out 
you do not hear that kind of conversation about the outrages going on 
in Bolivia and Venezuela, with Mr. Chavez. So it has been a selective 
focus on Colombia that sometimes escapes me. They are a remarkable 
group of sophisticated people who are mystified by our behavior.
    Chairman BRADY. Thank you, General. Mr. McDermott is recognized.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. I ask unanimous consent to 
introduce the recent ILO mission report regarding Colombia. It really 
notes continuing problems with labor and violence.
    Chairman BRADY. Without objection.
    [The information follows: ILO High Level Mission]
    So, to hold it up as an answer to this whole issue that is going to 
stop the Chinese--I think we need a hearing on what is going on with 
Chinese. That is a legitimate question. But I do not think that one 
should portray this as being something that is going to deal with 
    What I would like to ask Mr. Isaacson is the question, when General 
McCaffrey says, ``Put this thing in right now,'' what does that do to 
labor violence? What does that do to impunity? What does that do to 
labor conditions? How would you spin out the effect of that?
    Because what we are arguing here whether this glass is half full or 
is it half empty. That is what we are arguing about. And some of us are 
saying we want more in the pitcher, and others are saying there is 
already enough, and that we should move forward. So I would like to 
hear your suggestions about what you think would happen.
    Mr. ISAACSON. Sure. If the agreement was to be approved right now, 
the conversations--and there are some, actually, constructive 
conversations going on, as we heard in the last panel, between the U.S. 
and Colombian officials about benchmarks, about improvements, about 
reducing killings, about punishing--those conversations would stop. Why 
continue them? You have got an agreement now.
    If those conversations stopped, sure, there are people in 
Colombia's government who, out of their own good will and their belief 
in what is right, would probably try to continue some of these 
prosecutions, and would probably try to continue pushing funding into 
some of the right categories to keep these going.
    But, you know, these good people in the Colombian Government face 
some very powerful opposition who do not exactly share their view of 
the necessity of not circling the wagons and actually--and seeing these 
things reformed. They could lose. I think we give them a lot of 
leverage right now, as they try to push for these reforms. And we 
could, in fact, in just a relatively short time, bring some major 
historic institutional change that benefits both of our countries.
    Mr. MCDERMOTT. I would like to characterize why it has taken four 
years, because that is the issue. Why has it been here four years, and 
have people not been paying attention? Is it fair to say that the Uribe 
government talked a good game, but it was the implementation of the 
game of what they talked that was minimal, at best? Is that a fair 
characterization of why we are still hung up on this point?
    Mr. ISAACSON. Sure. The Uribe government, on a lot of things, was 
not even talking a good game. President Uribe, on many occasions in 
public, often flanked by the high command of the armed forces, would 
get up and call reformers, labor leaders, independent journalists, 
``terrorists,'' or ``friends of the guerrillas,'' without producing any 
evidence to that.
    At the same time, in 2008, an enormous scandal, which I alluded to 
in my testimony, exploded. And we suddenly learned that thousands of 
civilians had been killed on his watch, and with impunity there. That 
certainly, while not directly related to labor, cast a shadow over this 
whole thing.
    A further scandal where we found out that the Uribe government's 
presidential intelligence agency was spying on judges, on reporters, on 
opposition politicians, listening to their phone conversations, 
following them around, and even issuing threats, cast a further shadow 
over this.
    So, you know, any time you had momentum, something would happen 
that slowed it down.
    Mr. MCDERMOTT. Let me just say one thing. I have also heard some 
suggestions here that we are not paying any attention to what is going 
on in Vietnam, and we are talking about the trans-Pacific partnership 
and so forth.
    The fact is that those are some of the sticking points about 
whether or not the Vietnamese will be included in a TPP. I am 
personally one of those people who thinks that is maybe more important 
than Colombia. And I think that we will have to work hard to bring in 
both Malaysia and Vietnam, because of these kinds of issues.
    And I think--I yield back the balance of my time.
    Chairman BRADY. Thank you, sir. Ms. Jenkins is recognized.
    Ms. JENKINS. Thank you, Mr. Chair. Mr. Dorr, you talked extensively 
about the horrific loss in U.S. ag exports to Colombia because of our 
failure to pass this trade agreement. We have fallen from 71 percent to 
27 percent in market share for Colombia imports of key ag products just 
since 2008.
    So, looking ahead, first of all, what happens to our market share 
in wheat, for example, if we do not ratify this agreement, and Canada's 
agreement goes into force on July 1st, as expected?
    And secondly, what happens if we are able to implement the trade 
agreement? Will the U.S. market share jump right back to where it was, 
or how long would that be expected to take?
    And then, finally, is there any difference between getting it past 
by July 1st and, say, getting it past by the end of the year?
    Mr. DORR. Well, certainly, I think the numbers on the Canadian FTA 
versus the pending FTA with the U.S. are well known. And while the 
Colombians clearly prefer the U.S.-quality wheat, markets dictate. And, 
as a result of the price differentials, it is clear that we are losing 
market share to Canada, and would continue. I would presume, unless 
there was some other extraordinary events, to do so, as well.
    However, if you look at time lines for successful conclusion of 
these agreements, there are differing harvest periods in both 
hemispheres. And, for example, in the case of corn, if an FTA were 
concluded earlier than later, when there is a period of time in which 
there are no supplies available from the southern hemisphere, it gives 
U.S. producers an opportunity to get back into that market.
    And, based on the relationships, the historical relationships that 
we have had, it is clearly a large market, one that we anticipate could 
be as much as two million tons of corn. And in today's environment, 
that could be anywhere from $3.5 billion to $4 billion worth of 
business, as opposed to what we are seeing this year, at about $118 
    So, obviously, timing is of the essence. And when these things are 
delayed, what you end up with is development of market relationships 
with other suppliers that, once you are able to get back in the market, 
you have to displace. And that is always more difficult.
    Ms. JENKINS. So, how long does it take, if they were signed, for us 
to regain our market share? Do you have any idea?
    Mr. DORR. Well, I--in the case of corn, which is something--and 
sorghum DDGs, which I am more familiar with, and wheat, we are fairly 
comfortable that if there was a successful conclusion to the 
agreements, we would be able to re-engage our customers and begin to 
recapture those markets, because there are innate advantages, 
logistical advantages, and the ability--and the quality systems and the 
way in which we deal with our customers, we think, would make us a 
preferred supplier. And we believe we could re-establish those 
    The longer we go, because of price differentials, it will be more 
    Ms. JENKINS. Okay. Well, there is some urgency among, I think, 
Kansas producers that if we delay this beyond the summer, that we will 
miss an entire year, based on the growing season. And the buying--would 
you agree with that?
    Mr. DORR. Absolutely. And that is what I was alluding to. Because 
if you have a market coming--or if you have a crop coming on stream in 
the next two to three months, and you are in a position to capture that 
market, to delay it for a longer period of time gets you into the 
following year, sets up your competitor to capture the market, and 
clearly you have been displaced for at least another period of time 
that will make it quite difficult to recapture.
    Ms. JENKINS. If we want to begin to replace and recapture our 
percentage of the market, we really need to get this ratified within 
the next few weeks, as opposed to the next few months.
    Mr. DORR. It is clear that, as a market developer--and I want to 
make sure that this is clear, we are not lobbying this issue. But we 
clearly understand what the timing issues are, relative to when crops 
are produced and when markets are available. And the longer these sorts 
of things are in an abeyant state, the more difficult it is to capture 
those markets. And that is very obvious.
    Ms. JENKINS. Okay. Thank you, Mr. Dorr. Mr. Chairman, I would yield 
    Chairman BRADY. Thank you. Mr. Davis?
    Mr. DAVIS. Thank you, Mr. Chairman. General McCaffrey, it is a 
delight to have you here. My first battalion commander is your 
classmate from the Military Academy, and my best friend at Fort Bragg 
was your IG in the 24th Division in Desert Storm. So it is great to 
have an opportunity to reconnect in a less formal environment than the 
one you ran as a general officer. But I appreciate your insight very 
    Energy security is a very important component of our national 
security in so many ways. As gas prices are spiking, developments in 
Libya, the Middle East, some of the bluster of Hugo Chavez, with his 
rabid anti-Americanism is making it very clear to me that we are too 
reliant on foreign energy sources and, in particular, creating a 
dependency relationship on countries that are not necessarily our 
friends, and seeing large amounts of our capital leaving the country.
    I appreciated yours and Mr. Marsh's comments about Colombia as an 
energy provider that is seeking to expand its capacity. And I was 
wondering if you would elaborate some on your thoughts today on how 
this trade agreement will contribute long-term to the United States 
energy security.
    General MCCAFFREY. Well, certainly it is not a central area of my 
expertise, but you know, I spend a lot of time on TV, nonetheless, 
talking about it.
    Mr. DAVIS. Most of Congress has a tradition of speaking on things 
that are not their expertise, too.
    General MCCAFFREY. Right.
    Mr. DAVIS. We will definitely consider you at a higher category----
    General MCCAFFREY. I think there is some central facts. One is--the 
biggest fact is the U.S. has no national energy strategy, which is 
shameful, and particularly in terms of reducing use of energy.
    The second reality is that, when we look at our imports, 
thankfully, the majority of our external imports come out of Canada and 
Mexico, thank God.
    The next reality is Venezuela is our next supplier. And there has 
been a continuing unbelievable confrontation with Mr. Chavez with the 
Chinese in the wings, with their voracious appetite for energy and 
mineral deposits in the global context, putting that at some risk.
    Thankfully, Colombia is now becoming a major energy supplier, both 
coal and oil--and natural gas, potentially, along with Ecuador. And I 
think it is going to grow in the future. It would be hard pressed for 
us to ignore the reality--and, by the way, to underscore, Bogota is a 
three-hour flight from Miami. This is not the eastern Pacific. These 
are our friends, our allies, and our next-door neighbors. And they are 
an important potential source of energy for the United States, and we 
ought to exploit that.
    Mr. DAVIS. I remember back in the summer of 2001 you shared with a 
group of us that Hugo Chavez was probably the greatest emerging threat 
in the western hemisphere, particularly to American and democratic 
    Do you feel that moving towards a strategy of energy independence, 
and particularly embracing the Colombian agreement, and working closely 
with them as they develop their energy, will be--help to neutralize 
that, or mitigate that threat?
    General MCCAFFREY. Well, I think it is. You know, Chavez is a 
different problem. This giant, beautiful country of Venezuela, it has 
been traditionally an ally of the United States, has increasingly 
slipped into what essentially is one-man rule, where Chavez is now--
clearly dominates all the institutions of the state: The armed forces, 
the congress, the media. The Catholic Church has been intimidated, he 
is wrecking his own oil industry. At some point we will have to develop 
a notion on what are we supposed to do about Chavez, in conjunction 
with our Latin American allies.
    But in the short run, I think the argument on the FTA stands on its 
own merits with Colombia. These people are a democratic regime, they 
are implementing the rule of law, violence has decreased dramatically 
since 2002--and, by the way, a lot of that through the Uribe 
Administration. I am a little bit uneasy about the comments that imply 
that only now that Santos is in office we can start moving forward. The 
Colombian people think Uribe is a national hero. They will study him 
for the next 100 years because of what he did to turn the situation 
    But, nonetheless, the group we are dealing with now, the Santos 
regime, as Adam correctly points out, he is focused on land reform, he 
is focused on reducing violence against labor leaders, better 
governance. These people are moving in the right direction.
    Mr. DAVIS. All right. Thank you very much, General. I yield back, 
Mr. Chairman.
    Chairman BRADY. Mr. Reichert?
    Mr. REICHERT. Thank you, Mr. Chairman. This is for anyone on the 
panel. Colombia is promising--is a promising market for U.S. exports of 
green technology. Colombia's traditional industries have increasingly 
become committed to energy cogeneration in their plants, creating the 
opportunity for U.S. firms to export engines, generators, spoilers, and 
heat recovery systems across a lot of sectors.
    Colombia is also very big for hydro-power, solar, thermal, and wind 
markets. They are small, but they are all growing. And, unfortunately, 
Colombia's tariffs on clean energy technology and other green tech 
imports are very high, ranging from 5 to 15 percent. The World Bank has 
identified these tariffs as tariff barriers to Colombia's adequate 
development of clean technology. This is good news for the environment 
and for U.S. exporters. And the Colombian trade agreement would 
eliminate these tariffs for U.S. products that touch all of these 
energy-efficient technologies.
    So, I understand that several of you have experience with new 
energy technology. I would like to ask anyone on the panel whether you 
believe this trade agreement will help expand the markets for clean 
energy technology, and thereby incentivizing American innovation and 
global competitiveness of our American companies in this sector. So, 
anyone wish to address that question?
    Mr. ROMERO. In the vein of not being an expert on this, as Barry 
alluded to with his question, let me just say that the Colombian 
Government has set objectives for the use of clean technology in the 
years ahead.
    I do know that they have completed mapping of the country, in terms 
of wind power, and where the best places to install wind power would 
be. They are heavily involved already in the African palm oil industry. 
And I think that there is all kinds of opportunities for solar there.
    This would be a particularly good captive moment, if you will, to 
pass the FTA, because our equipment, our expertise, our services, would 
be able to enter into the country duty-free. And it is a particularly 
good moment because President Santos has put a high priority on 
alternative energy and green technology in his Administration. So it 
would be a particularly good moment for U.S. exporters.
    Mr. REICHERT. All right, thank you.
    General MCCAFFREY. I wonder if I might add one comment.
    Mr. REICHERT. Yes, sir.
    General MCCAFFREY. Just the business platform in Colombia--I always 
have to remind people 60,000 Americans live in Colombia; 250-plus 
American businesses are on the ground in Colombia. They are the easiest 
people in Latin America to do business with. They are smart, they are 
tough, many of them are educated here. They are committed to the rule 
of law. So this is another opportunity, I think, Mr. Congressman, you 
have accurately pointed out.
    Mr. REICHERT. Thank you, sir. Mr. Dorr?
    Mr. DORR. I would just make one very quick comment, in that in a 
collaborative manner, they make an excellent market for distiller's dry 
grains that are an outgrowth of the ethanol industry in this country. 
And it is a short market hop down there. It is a great feed product 
that is very, very well priced. And it mitigates a lot of food cost 
issues, particularly when you look at the number of very poor people in 
Colombia that, right now, with the tariffs in place, are dependent upon 
white corn, for example, with a high tariff level.
    And so, these are opportunities to blend the use of green 
technologies throughout the hemisphere. And this is one that I think 
makes a lot of sense.
    Mr. REICHERT. Thank you. One real quick question. General 
McCaffrey, during Ambassador Kirk's testimony before the full committee 
on February 9th, he said that he could not move forward with the 
Colombian trade agreement because of ``labor-related concerns that go 
to the core American values.''
    I agree that the importance of our core values does--like keeping 
drugs and drug violence off our streets and away from our children. 
What do you think about that comment, that this goes right to the core 
American values--and we all recognize keeping drugs and drug violence 
off our streets--help a country raise their children with those values?
    General MCCAFFREY. Well, I actually--you know, I strongly endorse 
his remarks. I think these are core American values. And I say that as 
someone whose family, you know, in the Depression era, was strongly 
    I think what we need to underscore, though, is the astonishing 
commitment over the last--certainly since 2002, to making Colombia 
safer, to lowering violence, to increasing the rule of law, to 
transferring thousands of cases from military courts to civilian 
courts, to include cases that are already in front of military justice, 
to locking up rogue army or police officers--a general--for 40 years 
behind bars.
    So, there have been significant changes for the better in Colombia.
    Chairman BRADY. General, thank you----
    General MCCAFFREY. I personally believe the FTA will contribute to 
that, and add leverage. A point of disagreement, though----
    Chairman BRADY. General, if I may, thank you so much for your 
testimony today. And I would encourage any written response--this is a 
great dialogue--for all the witnesses, by the way.
    Mr. Herger.
    Mr. HERGER. Mr. Chairman, thank you very much for holding this 
hearing on this incredibly important issue. Trade is so important, 
certain important in my district, important to our nation, important to 
growing jobs, establishing jobs in our country.
    Mr. Isaacson, you testified that WOLA supports expanding trade, but 
that WOLA does not support moving forward with this trade agreement 
until concerns regarding Colombian labor and human rights have first 
been resolved. I believe the opposite, that with the tremendous 
progress that Colombia has already made in this area, that we should be 
moving forward, and engage Colombia through this trade agreement which 
will, in turn, be a benefit to the Colombian workers.
    WOLA's position also appears to be inconsistent with the approach 
espoused in this April 2008 WOLA special report, which is entitled, 
``Opting for Engagement.'' One of the report's principal arguments is 
that increased commercial engagement, increased trade, is a promising 
way of exerting a positive influence on a country's policies and 
practices with regard to human rights.
    In fact, the report recommends that the United States take that 
approach, but towards Cuba. It does not mention Colombia. Now, everyone 
agrees that implementation of our agreement with Colombia would result 
in increased trade with the United States. But in my view, increased 
trade with the United States also helps us exert a positive influence 
on another country's labor and human rights conditions.
    Now, I would like to ask--and with my time, Mr. Isaacson, I think I 
know what your opinions are--but I would like to ask of our other 
panelists, please describe how they have seen labor conditions in 
developing world impacted by expanded trade with the United States. 
Mr.--yes, Mr. Romero?
    Mr. ROMERO. Free trade does not resolve all outstanding conflicts 
between labor and management. And it does not lift all boats in the way 
that we would like to see those boats lifted. But it does force local 
entrepreneurs and owners and managers to compete with U.S. 
entrepreneurs and owners and managers that have best practices, that 
practice the kind of respect for labor law that we have in this country 
in their own countries.
    I have seen this on the ground, in places like El Salvador, and 
even in Guatemala, where the entrance of U.S. entrepreneurs into these 
areas has lifted up not just wage scales, but also respect and benefits 
for workers in that area. And I think it would do the same thing in 
    Just one thing to add to that, and that is that passing a free 
trade agreement with Colombia now--which I strongly believe is long 
overdue--would also provide us not only the mechanism of raising 
standards, but it would also give us the opportunity to employ 
mechanisms when the Colombians failed. There is all kinds of mechanisms 
that--the special trade representative having to do with labor--that 
you can register complaints. There are hearings, et cetera. It is not 
like we have one bite at this apple, and then forever and ever we are 
subject to whatever happens in Colombia. We have a lot of control after 
we pass a free trade agreement.
    Mr. MARSH. I would just add to what the ambassador said, that 
within Colombia we hire a very highly-specialized workforce, and we 
have a strong commitment and track record of treating employees fairly 
in the United States and worldwide. We apply our labor standards 
worldwide. We view the immediate passage of the agreement as essential 
so that we can continue to create jobs not only in the U.S., but jobs 
in Colombia, where we can hire those people and apply the same ethical 
labor standards to our employees in Colombia.
    Mr. HERGER. Thank you. General?
    General MCCAFFREY. Well, I would add, having spent hours listening 
to the two Castro brothers at close range, that I strongly endorse 
engagement with Cuba, lifting the trade embargo, getting our people in 
there, and trying to improve the miserable lot of the Cuban workforce, 
as well as opening them to U.S. agricultural products, pharmaceuticals, 
et cetera.
    So I think that argument is correct, and it applies to Colombia in 
a very different sense, since Colombia is at the top of the heap of 
democracies in South and Central America.
    Mr. HERGER. Thank you.
    Chairman BRADY. I thank you.
    Mr. HERGER. Thank you, Mr. Chairman.
    Chairman BRADY. I want to thank the witnesses for their excellent 
testimony, for the Members, for their thoughtful questions. And let me 
note that Members may submit questions to our witnesses for the record. 
And if they do, I hope you will respond promptly. I know you will.
    And our witnesses today made clear that the pending trade agreement 
with Colombia offers significant economic and geostrategic benefits. A 
continued delay will only harm American interests in the region and the 
ability of American workers, businesses, and farmers to compete in 
these markets, as our competitors move ahead.
    Witnesses have made clear moving forward to show--to allow 
congressional consideration of this agreement by July 1st is in the 
national security interests of the United States, and will help us re-
engage as leaders within our hemisphere.
    I hope the Administration will lay out a clear strategy and action 
plan for--and time table for considering the Colombia agreement. I 
strongly believe that we should consider all these agreements by July 
1st. I hope that we can work together to make that happen.
    But for now, this committee is adjourned. Thank you.
    [Whereupon, at 12:46 p.m., the subcommittee was adjourned.]