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Colombia sees gains in jobs, drug war from U.S. pact

Yahoo News, October 6, 2006

WASHINGTON (Reuters) - A U.S.-Colombia free trade pact that faces a battle in Congress next year could help both nations fight drug trafficking and boost employment in the Andean country, a Colombian trade official said on Thursday.

"A sound and formal economy will be the most powerful incentive to keep our people from being involved in undesirable activities," said Hernando Jose Gomez, Colombia's chief negotiator in the bilateral talks.

The United States has poured more than $3 billion in mainly military aid since 2000 into Colombia, which produces most of the world's cocaine.

Colombia expects the agreement to increase its legal exports to the United States by more than $1 billion over the first three years of the pact, with $826 million of that coming from the industrial and mining sector and $191 million from agriculture, Gomez said at a U.S. International Trade Commission hearing on the economic impact of the accord.

U.S. exports to Colombia should increase even more, by $1.63 billion over the first three years, with almost a third of that coming from the U.S. farm sector, he said.

Despite opening its door to more imports, Colombia expects the agreement to boost job opportunities.

The country's unemployment rate, currently at 10.4 percent, could decline 2 percentage points over the next five years as a result of the pact, Gomez said.

U.S. labor groups are expected to mount a major battle to stop the agreement because Colombia has a long history of violence against trade union members.

Gomez said anti-union violence has fallen dramatically in recent years as the result of the $25 million the Colombian government spends annually to protect union members.

Union leaders are safer in Colombia than they would be in some U.S. cities, based on a comparison of murder rates, but the government is open to suggestions about how it could improve the situation, Gomez said.

The American Farm Bureau Federation and the National Pork Producers Council strongly endorsed the agreement, but the R-CALF beef trade group told the ITC panel it was concerned Colombia could flood the U.S. market with beef if current animal disease restrictions are lifted.

Gomez told reporters Colombia hoped to formally sign the agreement with United States late next month.

Since Congress is not expected to vote on the pact until 2007, Colombia needs a temporary extension of long-time U.S. trade benefits that expire at the end of this year, he said.