Free Trade Marches Southward to Colombia

The U.S. and Colombian governments have announced they have reached a bilateral free trade agreement. The USTR’s announcement can be found here and a pdf summary of the agreement can be found here.

As the NYT points out, a U.S-Colombia Free Trade Agreement will be the largest U.S. free trade agreement in the Western Hemisphere south of Mexico. Moreover, with recently concluded agreements with Peru and earlier agreements with Chile, the U.S. is tantalizingly close to a new regional free trade agreement (assuming Ecuador can be pulled on board in the next few months, Bolivia is a hopeless case for now). As a geographic matter, a partial Free Trade of the Americas is coming into existence. The U.S. will have free trade deals stretching south through Mexico, Central America, Colombia, Ecuador, Peru and on to Chile.

The agreement is also interesting in its development of international dispute resolution mechanisms. Although the details have not been released, the summary suggests there will be an investment protection arbitration mechanism, probably modeled on NAFTA Chapter 11, which allow individual investors to drag governments directly into international arbitration tribuanls. Additionally, the agreement appears to build on previous dispute settlement mechanisms by directly incorporating labor and environmental provisions into the dispute settlement system and authorizing tribunals to impose monetary penalties for violations of commercial, labor, or environmental obligations. All you budding trade lawyers out there might want to start boning up on your Spanish.