The Canadian Perspective: Professor Stephen Randall on Canadian-Colombian Free Trade
Canada has had a longer history in Colombia than might be suggested by the recent flurry of activity around the Canada-Colombia trade agreement. For much of the last 100 years, Canada has been a significant player in Colombian business. Before United States law allowed U.S. branch banking, the Royal Bank of Canada (RBC), along with European Banks, was one of the most important banks in the 1920s in helping to fund early oil exploration.
Beyond that, over the last two decades, a number of Canada-based energy and mining sector companies have been engaged in Colombia. The Canadian company Petrobank, for example, is a major player in Colombia through its Latin American imprint Petrominerales.
Over the past two decades the Colombian government has created one of the best investment climates in Latin America through clear regulatory policies – investment incentives to international firms. More recently, as Colombia has become a more secure and stable state, investment firms, both foreign and domestic, are less reticent to become involved in the country’s remote areas, where mining and oil and gas sectors are most active. Colombia is also secure in the sense that it has never cancelled an international contract; it has always met its debt obligations. Colombia’s state oil and gas company, Ecopetrol, has been extremely efficient and has set a good example to foreign investors with its constitutional mandate to engage in social and economic development.
President Juan Manuel Santos has encouraged this corporate ethos by putting more emphasis on socio-economic development than have his predecessors. After almost a decade in which the main focus of the Colombian government was on addressing the country’s serious security situation, President Santos has in his first year in office taken significant initiatives to ensure a balance in policy between security and the need for social and economic development. He has also moved quickly and effectively to repair the rift with Venezuela. The latter initiative was critically important, given the level of bilateral trade between the two countries.
Still, Canadian investment in Colombian industry is controversial: the mining sector especially elicits strong reaction from indigenous communities, organized labour and environmentalists. While Canada’s Conservative government tends to argue that economic development will in fact improve the human rights environment in Colombia, NGOs have tended to argue that the free trade agreement in fact exacerbates human rights issues by reducing protection for trade unions, for example, potentially lowering standards of living.
Both countries share this concern and signed an agreement, along with the free trade agreement, stating that each country will publish annual reports on the impact of trade on the human rights of Canadians and Colombians. Given this agreement – and the fact that Colombia has made significant strides in addressing a 30 year civil conflict, has reached out to the United Nations and other international bodies and states to improve its human rights record – the conclusion of the free trade agreement is a movement in the right direction.
Canada is well-placed to lead responsible investment in Colombia. Free of the imperialist baggage of the U.S., Canada has a long history of involvement with Colombian industry. If Canadian companies maintain their good records on human rights and corporate responsibility, and the Santos government continues to promote a progressive balance between the security agenda and the socio-economic agenda, both countries will surely benefit from this collaboration.