Monday, March 24, 2008

Why we should have free trade with Colombia

Mary Anastasia O'Grady explains how Colombia is seeking to grow their economy on Ireland's model by cutting the top rate of taxes in order to attract investments.
No sooner had Luis Plata sat down then he started talking about the Irish economic transformation -- from impoverished ugly duckling to swanky swan of Europe in just two decades -- and why a similar growth model is just what Colombia needs.

Some of the necessary policy adjustments are already under way in Bogotá, he said, and with any success, the reforms can be deepened. But the big question mark is whether the U.S. Congress will approve the pending Free Trade Agreement. The FTA, Mr. Plata explained, is as important to Colombia's growth as European Union membership has been to Ireland's.

To think that Democrats might undermine Mr. Plata's visionary agenda is troubling. In 2006, U.S. official development assistance aimed at alleviating poverty around the globe was $23.5 billion and it was pretty much money down a rat hole. That's because development requires economic liberalization, and leaders of poor countries have little incentive to disturb the status quo of monopolies and protectionism that put them in power. Their incentives are even less when rich-country handouts are flowing.

Now along comes Colombia, with a leader -- President Álvaro Uribe -- who is willing to risk political capital to open domestic markets, cut taxes and spur competition in a bid to grow fast à la Ireland. All his government asks from Washington is two-way trade, but Democrats want to slam the door in his face.
The Democrats talk a good game about wanting to use "soft power" to build relationships with other countries, but when there is really a chance to help a poor country build its economy that doesn't involve foreign aid handouts, they are balking in deference to their labor base. It really is a dang shame that they are blocking this trade agreement supporting President Uribe, one of the bravest leaders in fighting terrorism and building his nation's economy.

In a related story, this contrast of the Colombian and Venezuelan militaries was quite interesting.
Colombia's military recently had one of its defining moments in a raid that killed a senior leader of the FARC, a resilient guerrilla group that had never before lost a member of its top leadership in combat.

At about the same time, U.S. officials and military analysts say, Venezuela fumbled an effort to rush troops and tanks to the border with Colombia in response to Colombia's deadly March 1 attack on a FARC camp in Ecuador.

The Colombian raid triggered a mostly diplomatic and short-lived crisis. But it also showed the contrasting security philosophies of Venezuela's socialist President Hugo Chávez and Colombia's conservative President Alvaro Uribe.

Colombia, with U.S. help, has assembled a nimble infantry-based and intelligence-reliant counterinsurgency force capable of striking at guerrilla units and leaders deep in the jungle, military analysts say.

The Venezuelans have done just the opposite: They have spurned all contacts with the U.S. military and instead opted mostly for big-ticket purchases of Russian fighters, attack helicopters and submarines while also forming, training and arming reserve and militia units loyal to Chávez.

The result is that Venezuela's military is impressive on paper but also in many ways a paper tiger, according to defense experts, shaped more to preserve Chávez's grip on power than to fight an effective war.