Capstone Proposal

To:  Dr. Jefferys, Dr. Foster

By: Jesse Bevan

Date: April 23, 2012

Statement of Thesis and Project Summary

            My proposed thesis is: Given successful examples of the NAFTA trade structure how can the U.S. implement a successful and mutually beneficial trade relationship with Columbia?  This will be achieved by exploring the benefits the United States would gain through a free trade with Columbia and how the United States can go through with free trade agreements looking to the trade agreement of NAFTA as an example of structure and success.

            Furthermore, I hope to convey how creating a free trade environment will help in being of benefit to both Columbia and the U.S. but especially to the U.S. Job creation plus increased revenue through the agreement are reason enough to support such a contract. Beyond a national scope in assessing benefit, I feel it would be pertinent to look at how the trade agreement would also benefit specific industries and businesses in the state of Utah.

            Another important topic beyond creating a solid trade agreement is to attack the obstacles that stand in the way of nurturing an environment for such a trade to exist by bring to greater light the barriers to trade that are present and explore specific ways in which each of these hindrances can be addressed and removed.

Review of Literature

The NAFTA trade agreement instituted in 1994 was the beginning of a path that lead to the highest prosperity that North America and the world had ever seen. By way of free trade between competent nations both nations experience higher prosperity.

 In the last decade Columbia has become the best economic success story in Latin America. And despite drug violence, the Capital Bogotá is currently safer than Miami, Washington, or Atlanta. The economy is currently growing at a rate of 5% per year and Columbians can boast both a large middle class and the fact that in the past six years, foreign investments have gone up four times and exports tripled.

This makes Columbia a prime candidate to become a trade partner who with we can enjoy greater free trade. A free trade agreement implemented with Columbia would mean an increase U.S. exports by $1.1 billion and give key U.S. good and services duty free access in sectors from manufacturing to agriculture. It will increase U.S. GDP by $2.5 billion and support thousands of additional U.S. jobs. A free trade agreement would eliminate 80% of U.S. exports of consumer and industrial products to Columbia. Another 7% of U.S. exports would receive tariff free treatment within five years of implementation while remaining tariffs would be eliminated within ten years of the implementation. Following that, the hope would be that Columbia would join the WTO’s Information Technology Agreement which would remove further trade barriers of informational technology products.

Despite the fact that it would help create jobs and increase GDP, trade negotiations with Columbia have suffered in the past months. U.S. Congress’ failure to secure approval of the Columbia Free Trade Agreement has adversely affected bilateral relations between the two nations.

Outline

Introduction

First idea/focus: Why Columbia? A history of Columbian economy and U.S. trade relations

a.       Columbian economic success of the last decade

b.      Trade Agreements between U.S. and Columbia

a.       President Clinton’s trade agreement

b.      CTPA of 2006

Second idea/focus: What will be the mutual benefit?

a.       Nationwide benefit

a.       GDP

b.      Job creation

b.      Benefit on a state level, w/ emphasis on Utah

c.       Columbian/Latin American benefit.

a.       Stock Market merger between Columbia, Peru, and Chile

b.      Columbian potential to enter WTO

Third idea/focus: Current efforts to achieve a free-trade agreement

a.       Obama’s efforts

b.      Lack of congressional effort

Fourth idea/focus: NAFTA agreement structure

a.       What is NAFTA?

a.       Origin

b.      Structure

c.       Function

d.      Benefit/success

b.      How to go about Columbian incorporation to NAFTA or reach a like agreement.

Fifth idea/focus: Identify the barriers, and methods of removal.

a.       Import Policies

                                                              i.      Tariffs

                                                            ii.      Non-tariffs

b.      Government procurement

c.       Export subsidies

d.      Intellectual property rights protection

e.       Services barriers

                                                              i.      Legal services

                                                            ii.      Financial services

                                                          iii.      Transportation

                                                          iv.      Communication

                                                            v.      Express delivery

f.       Investment

Tentative completion date goals:

                                                                                 Date:

            1. Initial Proposal                                           April 23, 2012

            2. Background Research                                  June 1, 2012                       

            3. Bibliographic Research                                July 20, 2012                     

            4. First Draft                                                  August 20, 2012                                    

            5. Revision                                                 September 20, 2012                                         

            6. Revision                                                      October 1, 2012

7. Final Draft                                                  October 20, 2012

Annotated Bibliography:

http://www.sice.oas.org/ctyindex/USA/USTR_Reports/2011/NTE/COL_e.pdf  -  Source of thorough information in regard to trade barriers that exist between Columbia and U.S.

http://dailyreckoning.com/best-economy-in-latin-america/ - Site that provides a history of economic history, current trends and future projections of the Columbian market.

http://en.wikipedia.org/wiki/United_States%E2%80%93Colombia_Free_Trade_Agreement – wiki article with detailed information relating to history and current state of trade relations with Columbia.

http://www.ustr.gov/uscolombiatpa - A primary source government website that details the current efforts to implement a trade agreement with Columbia. The site gives detailed information about key facts, a labor action plan, as well as providing a current newsfeed of the proceedings that take place with regard to negotiations between the U.S. and Columbia. It also gives a breakdown of specific states and industries and how each will be affected; in what way and to what degree respectively.

http://www.humanevents.com/article.php?id=27350 – News article from 2008 that gives details to the history of trade relations with Columbia under the presidency of George Bush. It also gives statistics as to the potential of the GDP for both countries were an agreement more heavily implemented.

 "U.S.-Colombia Trade Promotion Agreement". – CRS report by the government giving key facts about the economies and trade history between U.S. and Columbia.  

 Luxner, Larry, Colombia Reaches Crossroads With Free Trade Agreement, The Washington Diplomat, 27 July 2011 – An article from the Washington Diplomat that outlines the last decade of Columbian history, it’s economies steady improvement and how it would greatly benefit from U.S. trade.

Hidalgo, Juan C. and Griswold, D., Trade Agreement Would Promote U.S. Exports and Colombian Civil Society, Free Trade Bulletin No. 44, 15 February 2011 – An article that gives detailed suggestion as to the barriers to trade that exist and the way in which we can and must remove and resolve the problems.

Tarter, Steve, and McDonald, Karen, Schock, Cat CEO praise trade pact with Colombia, The Journal Star, 6 April 2011. – an article that outlines the benefits that both economies will incur once a free trade agreement is made.  Goes into detail about job creation and GDP impact .

 Steven Chase, Stephen Harper defends free-trade deal with Colombia The Globe and Mail August 2011

 El Congreso de Colombia, Proyecto de Ley no. 201 de 2012 – Columbia’s own congressional bill of trade protocol between the United States and Columbia.

José R. Cárdenas, How Obama is losing Colombia FP, 25 April 2011 – article detailing how the shortcomings of president Obama and congress as well as a new election in Columbia have all affected the position that many Columbians have with regard to their enthusiasm to have a free trade implementation.

http://www.state.gov/r/pa/ei/bgn/35754.htm - Government website giving a complete and detailed profile of Columbian economy, government, society, etc.

http://www.csmonitor.com/World/Americas/2011/0529/Peru-Colombia-and-Chile-merge-stock-markets - article giving details to the important merger of the three biggest economies in  South America of Chile, Columbia, and Peru to create a massive stock market.

www.naftanow.org – gives detailed explanation to everything one should know about NAFTA.