The Ambassador William B. Wood celebrates the results obtained by the Colombian Goberment in Uraba

Remarks by Ambassador William B. Wood
Apartado, Uraba
Thursday, October 7, 2004

Versión en español

Good morning. It is a pleasure to be with you today here in Apartado. I am glad to have this opportunity to visit the Uraba region.

We have a highly developed bilateral relationship with Colombia. Our two mature economies face many similar dangers and stand together to oppose them. I am proud of the fact that U.S. assistance programs have helped the Uribe Administration create a Colombia at peace, with a vibrant democracy, on a path of sustained economic growth.

This year, for the first time in modern Colombian history, the government is present in all of Colombia's municipalities. The police are present in force in hardened stations.

For the second year in a row, the Public Forces, with U.S. assistance, are setting records for drug eradication and interdiction -- a total of some 300 tons in the last 12 months that will not arrive at the narcotraffickers' destinations -- as well as records in the arrest and extradition of those who participate in or profit from the illicit drug industry.

Throughout the country, the improvement in security is palpable on a personal level. People feel safer in their homes, at their jobs, on the roads. This is the result of improved although still imperfect observance of human rights, increased efforts by the Public Forces, and a firm political strategy never again to negotiate with illegal armed groups from a position of weakness.

The Uraba region in particular has benefitted from the Government's attention to security. In February of this year, for example, the National Police reestablished a permanent presence in the town Murindo, which had been without a state security presence since the FARC overran the town in 1998. The change in Murnido is symbolic of the change in Uraba as a whole. The FARC and ELN, which used to pose a grave threat to the region's physical and economic security, are on the run and have been pushed into the hills. They are not gone, of course, but they are on the run.

The security forces are also combating the insidious efforts of paramilitaries to exert clandestine control and establish a mafia-like influence on the region's economy. The paramilitaries are terrorists and narco-traffickers just like the FARC; so, even though they fight the FARC, in the case of the paramilitaries the enemy of our enemy is not our friend. We support the Government's effort to reduce paramilitary violence against civilians through the peace talks. But that support depends absolutely on full paramilitary compliance with their obligations to stop the violence and the narco-trafficking, and their acceptance of justice, including jail time for those quilty of serious crimes and extradition for those who have broken U.S. laws and harmed U.S. citizens.

Security brings freedom and opportunities for economic advancement, in Uraba as in the rest of the country. The Uribe Administration has enhanced free market mechanisms and improved the climate for foreign and domestic investors. Major commercial disputes have been resolved, there is new confidence in the legal and regulatory environment for business, and commercial prospects for smooth, steady, sustained growth are good.

The Uribe Administration has also made important reforms. Tax, labor, and social security reforms were passed, and a second round of reforms is underway. These changes are not easy or painless. But they help to balance the budget, under heavy pressure because of the urgent need to respond to the narco-terrorist threat, to increase employment, and to ensure fair benefits to Colombian workers.

Perhaps the most revolutionary of these reforms is well under way: the U.S. and Colombia, along with Peru and Ecuador, are working toward a free trade agreement by early 2005. Unlike ATPDEA and other trade preference arrangements, a free trade agreement ensures access to the U.S. market that will not expire, along with investment incentives, including predictable reductions in tariff rates, more certain dispute resolution mechanisms, and a more stable legal environment.

Free trade provides opportunities for producers to obtain inputs at lower prices and move up the technology curve for greater profit, higher pay, greater opportunity for advancement for workers, and lower prices for clients. Most importantly, it creates new businesses, generating more profits and employment and enhancing the standard of living for all Colombians.

The U.S. decision to negotiate an FTA with Colombia, Peru and Ecuador demonstrates our political commitment. A mature, developed, mutually beneficial bilateral trade relationship is a logical extension of that commitment.

The U.S. wants an FTA with Colombia and her Andean partners, and we will sign an agreement with which ever is ready. Colombia needs to avoid new trade or investment disputes with foreign investors that are not being resolved. The United States will be flexible, but this agreement must be consistent with the other free trade agreements the United States has already signed. We have already negotiated or are in the process of negotiating FTA's with 90% of our trade partners in the Americas. Nations which remain outside this huge free trdae bloc, only to decide to ente rit late, will face formidable obstacles.

The U.S. is Colombia's largest trade partner. We receive 44% of all Colombian exports, and provide almost 40% of Colombia's imports. Our bilateral trade grew over $1 billion last year alone. These new exports mean new, well paying jobs in both our countries. The increase in trade under ATPDEA is an excellent example of how increased trade benefits both parties. I am confident that with the conclusion of an FTA, trade will increase and generate even more jobs in both our countries.

Colombia's excellent team of negotiators has performed ably through four FTA rounds. We are where we should be in such a negotation - both sides have laid their cards on the table, and now the fun will begin. There are some who are worried about gving away too much, or obtaining too little, The best answer for these people is not too worry. No agreement will be initialed by the negotiators, signed by their governments, or approved by their congresses until they are convinced that it is in their nation's interest.

I know that there are issues of concern in this region. As the major banana producing and export area in Colombia, many of you know personally what is required to successfully export products. Bananas currently face no tariffs in the U.S., so it may not be clear how banana growers will benefit from an FTA.

First, you will enjoy lower cost inputs to make your production even more competitive; your bananas will be cheaper to produce..

Second, reduced costs for all products in Colombia will create more consumption of all products, especially consumer goods like foodstuffs; more people will want your bananas.

Third, increased investment and greater juridical security will stimulate new production in old industries; with more money moving around in productive ways in Colombia, still more people will want your bananas.

And fourth, all of the above will open the door to production in new industries; so if you get tired of producing bananas, it will be easier to produce something else here in Uruba. U.S. programs are already working in the region to develop sustainable forestry and to pave the way for future papaya exports from the Uraba region.

And of course, for those producing products that currently do face a tariff upon entry into the U.S., the agreement will directly reduce their costs, and allow them to lower their prices or increase their profit margins on U.S. sales.

Uraba is a mega-diverse region that will benefit from the FTA's inclusion of environmental issues. The joint programs that could result from the agreement will help preserve the region's biodiversity.

We are already working on new ideas. Through its Colombia Forestry Development Project, the USG is supporting the Government of Colombia's Guardabosques initiative and other forestry activities in Uruba. This innovative program works with communities to improve business, forest management, and agriforestry plans and operations. The program is designed to establish approximately 500 hectares in new forest areas and develop sustainable market linkages for forest products, thereby strengthening local and family economies and offering new sources of income. A prominent program feature is its ability to mobilize private sector investments in forest-related production and conservation activities. Such investments greatly increase impact and stimulate much-needed private sector participation that leads to long-term sustainability. It is estimated that in Uruba, the forestry development program will benefit more than 3,000 families and generate non-project funded investments of close to $3.0 million.

Some issues regarding the FTA have sparked debate, and I'd like to address them here:

· Intellectual property. First of all, this is a subject that goes far beyond the debate on drugs and pharmaceuticals.

Colombians, with their ingenuity and creativity, are net producers of intellectual property. You have artists of world reknown, from Garcia Marquez to Botero to Carlos Vives. Colombia has also been a world leader in the medical sector, especially in laser eye surgery. You need to protect their creations and knowledge. That is what strong intellectual property protection will give you. By focusing the discussion on one narrow area, we miss the big picture.

Regarding drugs, the U.S. does not limit access to necessary drugs or exploit traditional forms of knowledge.

We recognize the WTO rights of countries to provide medications to their populations. The drugs most effective against the diseases that kill the greatest numbers in the developing world are generally off patent. The patents on new drugs provide funds and incentives for research and development and enable scientists to share information with other scientists without fear that they will lose the benefits of their discoveries. Without patents, we would not be talking about distribution of new drugs; there wouldn't be new drugs.

· Agriculture. The FTA will provide opportunities for many agricultural products in which Colombia has a comparative advantage, including fresh fruits and vegetables. This region has already benefitted from the export of a product with no tariffs - bananas.

The Uraba is a fertile region and other prodcts already grown here, such as cacao, or new fruits and vegetables, could take advantage of the planned expansion of port facilities in Turbo to rapidly access the U.S. market. Such products often employ more workers per hectare than traditional crops such as grains. This is also a very important cattle producing region, and as an AFTOSA free area, could have important advantages in entering the US market under an FTA.

The U.S. seeks to limit agricultural subsidies and supports on a WTO-wide scale. In late 2003, we presented an aggressive offer to reduce our subsidies and supports in exchange for similar reductions by other WTO members. USTR Zoellick worked hard this year traveling to WTO-member countries to re-ignite the Doha negotiations. We hope to reach an agreement in the near-term that will resolve effectively the issue of agricultural subsidies. But until a multilateral solution can be found so that reductions benefit consumers rather than unreformed producers, we will support our agricultural programs.

Competitive infrastructure. It is not enough to develop positions for free trade negotiations, Colombia must also prepare for the day when the agreement enters into force.

Financing, for example, especially for small or new businesses, is easier to get in the U.S. than in Colombia. This is easy to correct and should be corrected now. Colombia should also improve the transparency of and participation in their capital markets to stimulate investment in productive assets of all sizes and levels. Colombia can take advantage of its strong local communities to identify local businesses with the best prospects, which are most deserving of financing.

The Tax Base Should be Broadened to strengthen the macro economy. A greater proportion of the U.S. productive sector participates in the tax base, on a broader basis, than in Colombia. In Colombia, there are also tax benefits to protect traditional sectors for the economy which create an incentive against innovation and modernization.

The Myth of Labor Management conflicts should be resolved... The readiness of the U.S. private sector to share the proceeds of production with all sectors that contribute to production has created a stable and profitable marketplace for all U.S. stakeholders. A free trade agreement is simply the codification of opportunity.

I am certain that the close bilateral relationship between our countries will continue for many years to come. We are natural partners not just in trade, but also in democratic efforts to combat narcoterrorism. I share your optimism about the future. The sacrifices being made today, and the opportunities you are generating, will be seen in the future as a dramatic turning point for Colombia.
Thank you.

Apartado, Uraba
October 7, 2004