The Brown & White

Trade agreements can simultaneously benefit all countries involved, said an ambassador from the U.S. State Department during a video conference last Tuesday.

Charlie Shapiro, senior coordinator of the bureau of western hemisphere affairs task force, spoke with students from Lehigh and three other universities about free trade and the Americas.

"Trade is not a zero-sum game," Shapiro said.

Shapiro gave a brief overview of the U.S.'s free trade agreements with Peru, Columbia and Panama and then took questions from students at Lehigh, Oklahoma, Columbia and Southern California universities.

Since joining the state department in 1977, Shapiro has served as the ambassador to Venezuela, the director of the office of cuban affairs and the deputy chief of mission at the U.S. embassies in Santiago, Chile, Spain and Trinidad and Tobago.

Shapiro discussed the goals and tactics of enforcing the free trade agreement with these Latin American countries and how they, along with the U.S., will continue to benefit from the agreement.

"Coffee that is produced in Columbia does not get taxed when going into the U.S.," Shapiro said. "Yet soda gets a 15 percent tax going into Columbia. The agreement fixes this."

Shapiro explained how the free trade agreement is not just an agreement for agricultural trade, but also an economic, political and social issue.

"The trade agreement is a political statement," Shapiro said. "Columbia is one of our closest friends and allies in the Americas, so we want them to be successful."

Columbia has a democracy-based economy and wants to move from an informal economy to a formal economy, Shapiro said.

In an informal economy like Columbia's, people are not involved in the cash economy. These countries don't have taxes, don't pay worker's sufficient wages or get adequate benefits, and do not export goods to other countries, Shapiro said.

Recently, however, Latin American countries' economies have grown twice as quickly as the U.S. economy, according to state department records.

Currently, there are 190 million people in poverty, but the state department predicts a reduction of poverty by 1.4 percent each year if all involved countries adhere to the free trade agreement.

"Years ago," Shapiro said, "we never thought that Peru would be able to afford asparagus or Atlantic salmon. A better economy is moving them into higher value products and that's what we want to see."

Students asked Shapiro various questions regarding the economic, political and social effects the free trade agreement would have on Latin America and its connection to the rest of the world.

"How will the free trade agreement affect the lower class in South America?" Joe Guay, '09, asked.

The free trade agreement will bring down the cost of products in Columbia and create more jobs, Shapiro said.

"It is a helping hand that will make it better for the federal government of Columbia," he said.

Questions were also raised concerning specific interactions between countries besides the U.S., specifically with other Latin American countries and the European Union, and whether this will expose the U.S. to more competition.

Columbia, Peru and Panama are forming separate agreements with the European Union, Shapiro said, but they do not see these other agreements as a form of competition.

"It's not like a basketball game where we're trying to block our opponent from the shot," Shapiro said. "We think it's great."

Shapiro also said trade agreements between Latin American countries themselves will open up great opportunities.

Most students who attended the conference were economics and international relations majors or members of the Global Union.

"I've seen in person the complaints of refugees in Columbia and I think the situation in Columbia is a lot worse than he's portraying," said Meredith Aach, '08, vice president of the Global Union. "It was an interesting discussion about formal and informal economics but it would have been better if professors were able to come and participate."

"I wanted to find out more," Ilya Khazen, '10, said. "It was cool to hear other students from other universities ask different questions, but Shapiro's answers were typical answers you'd get from an ambassador."

The free trade agreement expires on Feb. 28, but it is unknown how long it will be extended till. Shapiro said he isn't pressuring countries to make this agreement, but think it's a good idea for everyone.

"These are countries that have been at war with themselves for over 40 years," Shapiro said. "But since new presidency, things have improved dramatically. Bad indicators are down, good indicators are up. Now we have to ask if it is enough."