Good afternoon.
I greatly appreciate the opportunity to appear again before the standing committee, as I have in the past on NAFTA. I commend the decision to conduct this part of the hearing via video conference. While I would prefer to be in Ottawa at this time of the year, as an economist interested and concerned about the environment, I take satisfaction in the fact that the carbon footprint from my participation is much smaller as a result of not taking an airplane.
My short statement today will summarize U.S.-Colombia trade issues and negotiations. In many ways, they are issues that parallel talks that are going on between Canada and Colombia. They build on a book I wrote at the institute on the U.S.-Colombia negotiations, which was published two years ago. At the committee's request I will give particular attention to the environmental provisions.
Like all their trade initiatives, U.S. trade officials had both economic and foreign policy goals in mind when they launched free trade negotiations with Colombia four years ago. Most important, however, they had and still have a strong vested interest in Colombia's economic development. That development is critical to its success in the war against drugs and ending the prolonged armed insurrection in the country. These foreign policy objectives are a key reason why Colombia rose to the top of the FTA queue in the United States.
In a nutshell, the facts ought to make permanent the U.S. trade preferences that accord duty-free status to most imports from Colombia. As a result, that would provide incentives for companies to invest and create employment in Colombia. It was also meant to spur economic reforms in Colombia--some of which had already been introduced--that would create new opportunities for production and employment, particularly in rural areas where the drug trade and armed insurrection comingled. Of course, it was also meant to complement and support Plan Columbia, which the United States has worked on with the Colombian government for the past eight years.
Talks were not completed until late February 2006, but there was haggling over agricultural provisions and the pact wasn't signed until November 2006. It has not yet been acted on by the U.S. Congress.
The terms of the agreement were revised in June last year to incorporate new provisions on labour and the environment required by a bipartisan agreement between the Democratic leadership of the Congress and the Bush administration. In February this year, Congress agreed to extend Colombia's trade preferences until the end of the year. On April 7 this year, the Bush administration tabled implementing legislation under our so-called fast-track procedures. Soon after, however, the House voted to amend their rules that set time constraints on the debate over the Colombia legislation, which is now in legislative limbo, with long odds that a vote will be taken this year. So that's where things stand on the U.S. agreement.
Let me turn briefly to the environmental provisions of the trade pacts.
As a former U.S. trade negotiator, I know very well that trade negotiators learn by doing. Each iteration of trade agreements builds on, and hopefully improves, the substantive content and legal structure of rights and obligations. This proposition applies across the range of issues covered by trade pacts but is particularly true in the areas of interest in today's hearing on labour and the environment.
Just think back 15 years ago. NAFTA was state-of-the-art, with side accords on labour and the environment, despite some important shortcomings. It needed updating, and subsequently has been improved. Recent free trade agreements have incorporated more extensive obligations in the core treaty text and supplemented the trade provisions with commitments to develop programs that attack environmental problems in the partner country. These new provisions have had a modest but beneficial impact, primarily by highlighting areas or issues that require urgent action.
In this area, the recent agreements with Peru and Colombia contain the most refined set of obligations, including those mandated by the democratic leadership of the Congress in their deal with the Bush administration last May.
Among the key provisions in the environmental chapter are that the FTA requires signatories to implement and enforce seven multilateral environmental agreements, including the CITES and the Montreal Protocol, and to effectively enforce national laws and regulations. All these obligations are subject to these pacts' general dispute settlement procedures, unlike NAFTA. Also innovative are new obligations regarding public participation in the rule-making and regulatory process, provisions that were developed in conjunction with NGOs and private sector advisors in both countries.
Because of its critical importance in both Peru and Colombia, both agreements promote the protection of biodiversity. The Peru-U.S. pact also includes an annex on forest sector governments to address the problem of illegal logging. In addition to the FTA, both countries also signed an environmental cooperation agreement for pursuing environmental capacity-building in Colombia.
Neither of these pacts, however, contains a dedicated source of funding for environmental programs. If the Government of Canada follows a similar path, I would strongly encourage you to ensure that there is adequate funding so that cooperative programs can get beyond the planning stage and into actual implementation, where they can do good. This is true whether one is talking about environmental programs or whether you are supporting labour programs under the supplementary labour accord, such as the one signed between Canada and Peru just last week.
Let me conclude with a brief comment about how an FTA can address environmental challenges going forward, particularly given our common interest in crafting a post-Kyoto global climate change regime.
Free trade agreements create special relationships between partner countries that can facilitate work on a broad range of bilateral economic issues and cooperative approaches to regional and multilateral initiatives. For example, such goodwill helped forge coalitions in support of launching global trade negotiations in the Doha Round in late 2001. Free trade agreements have also served as negotiating laboratories for new issues that have not been vetted in previous multilateral forums. You will recall that the Canada-U.S. Free Trade Agreement established important precedents for the General Agreement on Trade in Services.
In a similar fashion, regional cooperation can serve as a model for global solutions to mitigate greenhouse gas emissions. We should use the partnership on environmental matters embodied in our FTAs to develop a broader consensus on how to meld the interests of developed and developing countries to address the problems of global warming.
Hopefully these efforts would yield useful precedents that then could be applied when negotiations shift to Copenhagen in 2009, where negotiations will hopefully design a new global climate change regime. This is a way we can work with our partners, both bilaterally and regionally, to achieve goals and objectives that are important to both of our countries. But we need to have the support of both developed and developing countries around the world to have a successful result. I encourage the Government of Canada to do that to hopefully provide some useful precedents that can be adopted down here in Washington.
Thank you very much.