BOGOTA - Colombia promised that a free trade agreement with the United States will create jobs and stimulate the economy, but farmers in the Andean nation fear their livelihoods are at risk and they will become prey of large U.S. agribusiness.
The government said the accord, which came into effect this week, will add as much as 1 percentage point of growth to the economy and trim two percentage points from unemployment. Small-scale farmers, however, fear that the local market will succumb to cheap U.S. exports and that thousands will lose their jobs.
"This deal will fuel growth as it has happened in other countries that have signed accords with the world's largest economy," trade minister Sergio Diaz-Granados told Reuters.
Under the deal, almost all the products that Colombia exports to its largest trade partner will gradually have duty free access to the United States. U.S. shipments represented nearly 40 percent of Colombia's total exports last year.
Textile, leather, cocoa, tobacco and jewelry producers stand to benefit from the Free Trade Agreement, or FTA. But the flip side of the deal is that thousands of small-scale Colombian farmers - including poultry, cattle, dairy, grain and bean producers - will come face to face with large U.S.-based agribusiness.
A study by several economists published by local rights organization Planeta Paz concluded that the Colombian market will be swamped with cheap U.S. food products.
"We expect a reduction of crops and job losses in yellow corn, sorghum, wheat and beans in the short term," the study said, noting that about 1 million farmers would see their income cut between 31 percent and 45 percent because of the FTA.
Colombia, which is expected to grow strongly in the coming years, will surely become an enticing market for U.S. food exporters. The FTA stated that the U.S. can send Colombia up to 2.64 million tonnes of food products free-of-duty in the first year under quotas that would increase gradually.
Even some members of the government of pro-marketeer President Juan Manuel Santos acknowledged that the FTA signed by the previous administration may be a liability for farmers.
"The agriculture ministry disagrees with many of the things that were negotiated ... but now we must comply with the FTA," agriculture minister Juan Camilo Restrepo said earlier this month.
Trade groups say some 700,000 farmers are at risk of losing their jobs in the next five years, as local producers would succumb to a flood of cheaper U.S. products.