The doctrine of neoliberalism says that Third World economies will succeed through export-led growth. Colombia is an interesting test case. Throughout the 1980s it was hard to suppress the evidence that illegal drugs were in fact Colombia's biggest export given that marijuana, heroine and especially cocaine were earning over $3 billion a year. The mechanisms for returning the US dollars and exchanging them back for pesos were imaginative and varied. Ordinarily, the influx of volumes of hard currency would be seen as a problem of success, a sign of export led growth in fact. Certainly as the hot money sloshed around, the benefits of the cocaine boom were enjoyed, not just by a few drug barons, but by the Colombian ruling class sui generis. Investment clubs were set up to fund shipping runs, and some $1 billion drug money was exchanged for pesos each year through official channels. This was when one Alvaro Uribe Vélez and his peers learnt to use the official apparatus to protect illicit enterprise, when Colombia's narco-bourgoisie was formed.
Of course the official version is that the export boom should be of licit products, not drugs. After a decade of shielding Colombian drugs traffickers because of their utility in aiding CIA covert schemes in Central America, around 1989/90 the US administration shifted to a different tack. The Andean drugs supply industry, which US policies had done so much to stimulate, had to be brought under control. And so in 1991 President George Bush I passed a law to encourage Colombia, Peru, Ecuador and Peru to export goods other than drugs. The Andean Trade Preference Act (ATPA) came into force in 1992. It reduced import duties on a range of goods coming into the USA from the four Andean nations. The idea was to provide an economic incentive as part of the wider anti-drugs strategy. ATPA was the carrot, to the stick of fumigations. It didn't work, for three reasons.
The first reason is that the deeply established relationship of trade dependency with the USA, which takes 48% of Colombia's exports, ensures US domination in any negotiation. Export-led growth requires that exports do in fact grow, and for that they need access to their major markets. But, as with many 'free trade' issues, the reality has been far different from the rhetoric. By 2001, after ten years in operation, tariff reductions under ATPA covered less than 15% of US imports from Colombia.
The second reason ATPA didn't work is that neoliberal policies were in the meantime devastating Colombia's national economy. Establishment proponents point with unlikely precision to the 122,296 Colombian jobs benefiting from ATPA. But set that figure against the million or more jobs lost due to competition from cheap imports, a few hundred thousand jobs cut from the state sector and the three million dispossessed in rural areas in a decade of 'free trade'.
The third reason is that the narcobourgoisie is fully in power, and determined at all costs to block the one internal policy that has half a chance of stopping coca cultivation, despite the lures of the foreign markets, and that is the agricultural revolution that Colombia has never had.
Colombian capital lobbied Washington to extend ATPA: it wants to see textiles, leather goods and similar exports included. The renegotiation of the treaty hit sticky ground, with months of delay. The new ATPA sees a minor expansion for Andean goods, provided US capital gets the full backing from the Andean governments for its mega investments in their countries. It is not only the US, European multinationals too are trying to prise Colombia open to complete privatisation. While its European competitors have taken up the GATS negotiations as their preferred weapon, Washington hopes to use ATPA as an added lever to gain the advantage for US multinationals. Last year Colombia legislated for Special Economic Export Zones (ZEEEs), free of taxes and labour protection – maquiladoras. Together with the new ATPA, the ZEEEs are already a big step on the way to implementing the FTAA in Colombia.
Meanwhile Uribe heads off to meet President George Bush II to ask for more loans to fight the counterinsurgency war. Both leaders need to defeat resistance to the FTAA, by whatever means. No doubt a deal can be struck.