• U.S.-Colombian Accord On Labor Issues And U.S.-Panamanian Accord On Tax Information Open Way For Congressional Action On Three FTAs; Timing And Legislative Process Still Uncertain
  • May 10, 2011 | Authors: Gilbert B. Kaplan; Jeffrey M. Telep; Taryn Koball Williams
  • Law Firm: King & Spalding LLP - Washington Office
  • The United States has reached accords with Colombia on labor issues and with Panama on the exchange of tax information as part of these countries’ bilateral trade negotiations. These accords, along with one reached earlier this year with Korea on auto trade, appear to have finally opened the way for congressional action on the free trade agreements negotiated by the United States during the Bush Administration with Colombia, Panama, and Korea. Congressional consideration of the three FTAs had previously been delayed by disagreements between Democrats and Republicans in Congress over both substantive and procedural issues. Although timing and legislative process issues are still being sorted out between the White House and Congress, there now seems to be basic agreement on both ends of Pennsylvania Avenue that the three FTAs should be taken up and, if possible, passed by Congress this year.

    With respect to Colombia, President Obama and Colombian President Santos announced on April 7 a three-stage “action plan” to improve labor rights in Colombia, see http://www.ustr.gov/webfm&under;send/2787. The action plan outlines various commitments to be carried out by Colombia over the next six months, some with deadlines that occurred as early as April 22. The commitments include, among others, the immediate expansion of protection for union leaders; reforms to Colombia’s Criminal Code; outreach and education programs on workers’ rights; and the dedication of a specified number of police investigators and labor inspectors.

    With respect to Panama, the Panamanian legislature approved a Tax Information Exchange Agreement on April 14, which will allow the United States and Panama to seek information from one another regarding taxes and will bring Panama into compliance with international standards designed to prevent countries from becoming tax havens.

    The exact timing and legislative procedures to be used for taking up the three FTAs still remains uncertain. This is complicated further by disagreement between the Obama Administration and Congress as to how other pending trade matters should be dealt with by Congress this year. These matters include:

    • reauthorization of the lapsed Trade Adjustment Assistance program, which provides financial aid and training to workers displaced due to international trade;
    • renewal of the Andean Trade Promotion and Drug Eradication Act, which provides duty-free access to a wide range of goods from Bolivia, Colombia, Ecuador, and Peru;
    • renewal of the Generalized System of Preferences, which permits lower tariffs for least developed countries; and
    • extension of permanent most favored nation status to Russia once it enters the World Trade Organization.

    Whether any or all of these matters will be considered by Congress prior to, or as part of, legislation implementing the FTAs is unclear at this point.