Advance Briefing of the Secretary’s Trip to Colombia

Assistant Secretary of State for Western Hemisphere Affairs Thomas A. Shannon and Assistant Secretary of State for Economic, Energy, and Business Affairs Daniel Sullivan

ASSISTANT SECRETARY SHANNON: Good morning to all of you. Appreciate the fact that you all are here today. Very briefly, I’m Tom Shannon, the Assistant Secretary for Western Hemisphere Affairs. And I have with me Dan Sullivan, the Assistant Secretary for Economic, Energy, and Business Affairs. We will be accompanying Secretary Rice on her trip to Medellin, Colombia. We want to make a very brief statement and then open it to questions.

Again, as you know, the Secretary will be leading a congressional delegation to Colombia. We’ll be visiting the city of Medellin, leaving tomorrow, Thursday, January 24th around eleven in the morning from Andrews Air Force Base, traveling directly to Medellin, spending the evening in Medellin and also spending most of Friday, January 25th in Medellin, leaving in the very late afternoon and returning again to Andrews Air Force Base.

We’ll be traveling with ten members of the House of Representatives -- all Democrats. It’s going to be a -- I think it’s a great delegation. This is going to be a good opportunity for the Secretary and the members of the Delegation to be on the ground in Colombia and to see the impact of President Uribe’s democratic security policy in a city, Medellin, which has suffered both at the hands of drug cartels, the FARC, the ELN and paramilitaries, but that the citizens of Medellin, working with President Uribe, working with the armed forces and law enforcement organizations of Colombia and the elected officials of Medellin have constructed a vibrant, dynamic metropolitan area that shows what people can do when they have courage and faith and hope in themselves and in their democratic destiny, but also highlight the importance of the economic and commercial relationship between the two countries and show how important our free trade agreement will be for the continuing development of Colombia and its ability to meet the social and economic development needs of the Colombian people.

During our time in Medellin we’ll have an opportunity to meet with trade unionists, both those in favor of the free trade agreement and those who oppose it. We’ll have an opportunity to meet with businessmen operating in Medellin. We’ll have an opportunity to meet with local elected officials, such as the mayor, meet demobilize combatants, tour some examples of industries that benefit from trading relationships with the United States, also meet with the Attorney General of Colombia, who’s playing such an important role in addressing human rights abuses and especially violence against trade unionists, and then finally meet with President Uribe and members of his cabinet.

This is a rich agenda for us. It’s a compact agenda, but it’s one that will allow the Secretary, as I mentioned, and the ten members of Congress to really get a very good, very tactile feel and understanding for the changes that have taken place in Colombia. And the continuing role that the United States can play in this very positive story through our economic and trading relationship and especially through successful consideration by our Congress of a free trade agreement.

Let me turn this over now to Assistant Secretary Dan Sullivan, who will make a brief statement and then we’ll take your questions. Thank you very much.

ASSISTANT SECRETARY SULLIVAN: Thank you, Tom. I’m going to give a little bit more of the context on the economic side. Particularly given that I don’t have the chance and the opportunity to brief this distinguished group, I’m going to bore you with some -- a little bit of economic facts, so you can have a bit more of the granularity of what his FTA actually means for both sides, which I think will be beneficial if someone in particular traveled on the trip tomorrow.

You know, we often talk about the FTAs, our FTAs, as win-win propositions. This one clearly from our perspective is. On the U.S. side, you have what is a significant difference in tariff levels. The average U.S. tariff on a Colombian import because of our preference programs, is about .1 percent. The average Colombian tariff on a U.S. export is in the range of about 13 percent. So this free trade agreement, as you can imagine, will significantly open the Colombian market to U.S. exporters and there’s been -- the ITC has done a study that’s essentially saying that the benefits -- no industry in the United States -- you often hear that sometimes on free trade you have industries that are affected -- virtually no industries are affected negatively. This would be -- the result from the U.S. side would be a pretty substantial increase in exports given this tariff differential.

But on the Colombian side, you also have obviously very significant benefits of what will accrue from the passage of the FTA. Probably one of the most important is obviously to lock in a permanent long-term economic relationship from Colombia’s perspective with the largest market in the world. But another one that doesn’t get a lot of attention that we think is also particularly important is the opportunity for the Colombian Government, President Uribe, to lock in what has been a very significant and very successful economic reform program that he has undertaken independent of this FTA.

So things that Colombia has done, the World Bank has last year noted they were the top reformer -- economic reformer in Latin America, they’ve signed a bunch of other free trade agreements, particularly EU, or they’re working on one with the EU, Canada, Central American countries, privatized state-owned companies, increases in investment protections, transparency. And what this program under President Uribe has done, it’s been pretty dramatic in terms of what it has achieved both in terms of GDP growth -- about 5 percent average a year since 2000, 8 percent last -- first quarter of ’07, which from what we can tell, highest GDP growth on a quarterly basis in Colombian history, significantly increase foreign direct investment, doubling foreign exchange reserves. But the two big ones from our perspective, unemployment from 2002, 15 percent, down to 9.4 percent last year, and poverty reduction 56 percent, down to 45 percent -- 11 percent decrease since the President took office.

So from our perspective the FTA provides the opportunity to lock in these reforms and move the relationship, which has been one on the economic side from a preferential relationship -- one way benefits under the ATPA -- to a more mature relationship based on mutual economic benefits and commitments.

Finally, just one thing that I wanted to mention. This is actually part of -- the Secretary’s trip is part of what really is an unprecedented effort in terms of outreach by the Administration to the Congress over the next several weeks with regard to the Colombia free trade agreement. So the Secretary will be taking a CODEL. There were -- there are scheduled CODELs by Ambassador Schwab, Secretary Gutierrez, who’s probably on his fourth one, Secretary Paulson. The Acting Secretary for Agriculture Chuck Connor is scheduled. So in the next six, seven weeks you are going to see a very significant focus on this FTA, and that obviously touches on the importance of this both as I mentioned from an economic perspective, but also more importantly really from a foreign policy perspective.

If you haven’t seen it, we have copies of the Secretary Rice’s OAS speech that she gave essentially focusing on the FTAs and their importance with regard to broader foreign policy interests that she gave in October. And so I thought it would be useful for you to know that this is part of an administration-wide effort given the importance of the FTA that everybody from the President on down sees in passing this FTA for Colombia. Thanks.