Triple Crisis blogger Kevin P. Gallagher published the following Latin American Trade Network (LATN) policy brief on the Obama Administration’s revised US-Colombia Free Trade Agreement (FTA), which is the subject of today’s Senate Finance Committee hearing and will be sent to Congress this session alongside revised FTAs for Panama and South Korea. Gallagher demonstrates that the FTA has not been reworked to ensure that Colombia has the ability to prevent and mitigate financial crises.
The United States-Colombia Trade Agreement between the United States and Colombia was signed before the global financial crisis. As Congress and the President convene to rework the agreement, it will be important to ensure that the agreement is designed so that it given both nations the flexibility to put in place macro-prudential regulations to prevent and mitigate financial crisis.
As the treaty now stands, a number of actions that Colombia has successfully deployed in the past to prevent and mitigate treaties in the past would be deemed actionable under the agreement’s chapters on financial services and investment.
The global financial crisis has demonstrated that sound regulations are needed to stem the ability of speculative capital to create financial bubbles that burst and then leave ordinary Americans and Colombians worse off.